As Local Water Done Well takes shape, the term CCO comes up again and again. Councils talk about forming one, joining one, or deciding against one. This guide explains what a CCO actually is, how it fits within Local Water Done Well, and why it is only one of several models a council can choose.
What a CCO is
CCO stands for council-controlled organisation. It is an organisation owned by a council, or by several councils together, that operates at arm’s length from them. It has its own board of directors and its own management, and it runs its own day-to-day operations while remaining accountable to the councils that own it.
CCOs are not new and they are not unique to water. Councils have long used them to run things such as transport, ports and economic development. What is new is the scale on which they are now being used for water services under Local Water Done Well.
Why CCOs feature so heavily in Local Water Done Well
Local Water Done Well requires councils to show that their water services are financially sustainable and meet quality standards. For many councils, a dedicated organisation is the most practical way to achieve that, and the CCO structure offers some specific advantages.
Greater borrowing capacity. A water CCO can borrow against its revenue at higher levels than a council can, through the Local Government Funding Agency. This unlocks the investment that water infrastructure needs without loading all the debt onto the council’s own balance sheet.
A single focus. A CCO set up for water concentrates entirely on drinking water and wastewater, rather than competing for funding against every other council service.
Professional governance. The board is made up of independent, professional directors chosen for skills in areas such as infrastructure, finance and governance, which is intended to bring a sharper commercial discipline to long-term asset management.
A CCO is not the only option
This is the part that often gets missed. Local Water Done Well does not force every council into a CCO. It sets the rules and the standards, then leaves councils with a genuine choice of delivery model.
In-house delivery. A council can keep water services within the council itself, using new rules to ring-fence water revenue so it is protected and spent only on water. Christchurch and Dunedin are examples of councils choosing this route.
A single-council CCO. A council can set up its own standalone water CCO. Selwyn was the first council in the country to do this.
A joint CCO. Several councils can combine their water services into one shared CCO to gain scale, as the Waikato and Northland councils have done.
A consumer trust model. A water organisation can also involve a consumer trust, where water consumers elect trustees who play a role in appointing and monitoring the board. In this case the organisation may not be a CCO at all.
What stays with the council
Even where a council forms a water CCO, it does not hand over everything. A water CCO typically takes on drinking water and wastewater, while stormwater usually stays with the council because it is so closely tied to roads, parks and land use. The council also remains the owner of the CCO, setting expectations through a statement of expectations and monitoring performance.
The honest summary
A CCO is a tool, not a verdict. For councils facing large infrastructure bills and tight financial standards, it offers a way to borrow, focus and govern water services that a traditional council structure struggles to match. For others, in-house delivery with ring-fenced revenue may serve their community better. Local Water Done Well makes the standards mandatory, but the model remains a local decision.
