Published 26/07/2024
Release of review into Wellington Water’s budgeting advice error
The independent review into an error in Wellington Water’s budgeting advice for councils’ 2024-34 Long-Term Plans has today been released and Wellington Water Board Chair, Nick Leggett says it doesn’t pull any punches.
“Getting on top of the Wellington regions’ critical water infrastructure backlog is way too important to let a report like this collect dust. We have to take its contents, learn from it and carry out the recommendations it gives us. The failures identified were unacceptable and Wellington Water unreservedly apologises to council shareholders and residents of the Wellington region,” says Nick Leggett.
The Review has found that “...the error had multiple and inter-related causes. The error arose because of deficiencies in structure, systems, and processes, including a lack of strategic leadership at the highest levels of the organisation, and wider problems of organisational culture. Importantly, the consequences of the error, including for the trust and confidence of the shareholder councils, were magnified by how Wellington Water responded to it. When they became aware of the error, the organisation did not react quickly enough or take it seriously enough, and they downplayed the problem in their communications with councils.”
Nick Leggett said that there is much work to be done now at Wellington Water.
“The report clearly outlines issues in senior leadership, structure, systems, and processes. These issues manifest themselves in behaviours and culture where issues are not raised early or sufficiently to shareholders. The Board is committed to working through these issues systematically. We will move with urgency to implement the recommendations and build an organisation that is match fit for the very important job it must do for our region.”
Nick Leggett said being upfront with our shareholding councils and communities should be a core principle in the way the organisation operates.
“It’s clear the organisation needs to front up and immediately improve the gaps in its structures and processes that have been identified.”
Nick Leggett said that at least once on every page of the report, there were insights from employees about how the organisation could do better and that these issues now must be addressed as a matter of course.
“It became more and more obvious as I read on that most of the answer lies in a dysfunctional culture with insufficient checks and balances in processes that made errors of the kind that prompted the report inevitable. I agree with the reviewers that unless we turn that culture and ways of working around, similar errors are bound to occur in future, as they have in the past with the failure over fluoride."
Nick Leggett said the anticipation of imminent water reforms may have made Wellington Water too timid in addressing much needed change in its organisation.
“It’s important to acknowledge the complex environment that Wellington Water operates in. We’ve had a couple of false dawns with water reform and that has led to successive shareholding councils concluding that any significant organisational change should wait for water reform. It is now clear that we can’t wait any longer to implement improvements if we are to do all we can to avoid similar future errors and ensure the good health of the organisation.
Nick Leggett said the Board will be discussing the recommendations with shareholding councils and the Board will announce detailed next steps over the coming few weeks.
“As a Board, we are determined to take the steps to ensure mistakes like these don't happen again.”
The final report can be viewed on the Wellington Water website - https://www.wellingtonwater.co.nz/about-us/news-and-media/cost-underestimation-review/
Editor notes
Wellington Water is owned and fully funded by Wellington City Council, Hutt City Council, Porirua City Council, and Upper Hutt City Council, Greater Wellington Regional Council and South Wairarapa District Council. All six councils are equal shareholders.
Our councils own the water infrastructure in the region, and they task us to manage the infrastructure and deliver water services to our communities.
Wellington Water is governed by a Board of Directors. The Board and our organisation receive overall leadership and direction from the Wellington Water Committee, which are also responsible for appointing members to the Board.
The Wellington Water Committee is made up of representatives from our council owners and mana whenua.