The Government is under fire for spending more than $16 million on the services of contractors and consults for its Three Waters reform programme last financial year. 

It's a price tag that's being questioned by the Opposition.

But the DIA's Local Government Deputy Chief Executive Michael Lovett said such a spend was warranted, given the scale and scope of the Three Water's project.

"Much of this work is of a one-off nature and demands specialist skills. It is reasonable and necessary in that context to use contractors and consultants in addition to employed staff."

The Water Services Entities (Three Waters) Bill was introduced in early June, and passed its first reading a week later – it's currently in front of MPs at the Governance and Administration Select Committee.

If passed, the legislation would amalgamate the management of drinking, waste and stormwater services from the 67 councils in New Zealand to four new regional water entities – co-governed by councils and Māori.

The National Party is against the policy – and has promised to scrap the reforms, if it wins the election.

And the party's Local Government spokesman Simon Watts is not happy with the $16.3 million bill for consultants – a bill that was racked up in the 2021/22 Financial Year.

Specifically, he questioned the $14,500 bill for the "CE Position Description Development".  

"This Labour Government seems to think that money grows on trees from the amount they are spending writing on job descriptions."

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According to the DIA, Chief Executives are required to be appointed for each of the four local establishment entities.

"There was a requirement to define the chief executive role and produce position descriptions that reflected the requirements of the role in each geographic area, including accountabilities and required skills, experience, and personal attributes."

That's not the only expense that's being questioned.

For example, $115,000 was spent on a "Virtual Australian Roadshow".

DIA said that was for a series of webinars for the local government sector that provided an opportunity to learn about the reform experiences in Tasmania and Victoria, and how those systems are working.

Another $42,000 was spent on a "communications reset" – after councils and public feedback revealed the reforms had not "communicated the detail of the water reforms in a way that explains what the reforms are".

There are numerous other examples of spending National has questioned.

In its March annual review by the Governance and Administration Select Committee, the amount of money DIA was paying consultants to work on the reforms was sharply in focus.  

"The department acknowledged that it is unusual for it to be spending that sum for consultants on a programme of work," the report said.

It also pointed out that DIA had taken "great pains" to ensure that its normal procurement and probity processes are in place, including using external advice for the procurement.

"The department pointed out that the work is unusual, involving a large, complex asset base ($40 billion to $60 billion). The work also raises questions that it does not have the internal expertise to answer."

The reforms are meant to be in place by 1 July, 2024 – Lovett said this is a large-scale task involving the detailed design and establishment of four new Water Service Entities.

Meanwhile, he is anticipating that more money will be spent on hiring more consultants during this financial year.

"At this point in the financial year, it appears likely the balance of full-time and fixed term staff compared with contractors results in some increase in expenditure on contractors by the year's end, particularly as the National Transition Unit scales up for delivery."