The latest issue of the UK magazine Public Finance has an article about how the financial crisis has hit local authorities in many parts of the world. The article has the headline ’Painting the town red’ and is written David Walker, a commentator of public affairs. Lars M. Andersson gives his views on why local authority investments are important for financial recovery and how local authority cooperation could be a way to secure financing for capital spending.
Find the article here.
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The board of Kommuninvest has decided to appoint Lars M. Andersson to chair a Drafting Group set up to suggest appropriate researchers and institutions whose work on municipal financing should be encouraged. Every year an award will be allocated by the board of Kommuninvest on the recommendation of the Drafting Group. This will be a potentially important support to the most innovative and interesting research on the topics related to finance and local authorities carried out in the world of Swedish higher education. The Drafting Group will also include participants from academia as well as representatives from Kommuninvest.
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The think tank New Local Government Network in the United Kingdom has posted an article that I have written on their blog. The title of the article is: ’A UK Local Government Fuding Agency – would it be possible?’
Here is a link to the article:
http://www.nlgn.org.uk/public/2011/a-uk-local-government-funding-agency-–-would-it-be-possible/
Lars M Andersson
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Lars M Andersson gave a presentation at a municipal economy conference in Malmö on the 29th of August. The title of the speech was ”How can municipalities meet future challenges”. He started with a survey of the situation for local authorities in Europe with a focus on the UK and France, to continue with the Swedish situation. In the short term it is a question how much the debt crises in some of the Euro countries will affect Sweden and it’s local authorities. In the longer term the demographic changers that leads to an older population, will cause higher cost for the care of the elderly at the same time that we have less taxpayer. Mr Andersson stated that his view is that the local authorities need to continue to make the operations more efficient, as one of the main elements for handling future challenges. This can be done with more inter-municipal cooperation. A new project for cooperation in administrative matters, for example accounting and salary management, was presented. This project has started after the initiative of Lars M Andersson and the Swedish association for municipal economists.
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In the past weeks I have visited both London and Paris. In London I spoke at a New Local Government Networks (NLGN) seminar on municipal finance and in Paris I attended the last meeting of the first phase of the project aiming to create a local government funding agency in France.
London, July 14
The NLGN seminar took place in the Guildhall in the City. The participants represented local authorities and others interested in the question of future funding of local public projects. After an introduction by Tom Symons, Senior researcher, NLGN, short presentations were given by myself and
My presentation focused on local government funding agencies in general and the creation of Kommuninvest as well as the ongoing French project. There was much interest and pertinent questioned posed.
It seems to me, after reading some of NLGN’s reports and after hearing the discussion during the seminar, that UK local authorities are presently at a crossroads. Many different options have suddenly become possible, but each presents challenges. Westminster has decided on substantial cuts in the grants to local authorities. It seems that the Lib/Con government is saying – manage as best as you can, we will give you greater freedom to “navigate the stormy sea”. UK local authorities are now eager to make the best of this sometimes confusing situation.
In the afternoon after the seminar I had a short meeting with Mark Johnson and Helen Wyles at Euromoney. We spoke about the upcoming local government conference arranged by Euromoney in Istanbul during September. At this occasion the French Project will be presented by Yves Millardet, the coordinator of the advising group. We had also a thought-provoking discussion about financial risks and local governments funding agencies. I will formulate my thoughts on the subject sometime in the near future.
Paris, July 18
The advisors and the COPIL (the working group) of the proposed LGFA in France had the last meeting of phase one in the project. We went trough the draft of the final report on legal status, guarantees, capitalisation, governance, rating issues, financial calculations etc. It was a productive meeting with good suggestions for additions to the report. The meeting also noted that the Cour de Comptes had, just a few days ago, issued a report where they, among other subjects, express the opinion that an agence de financement des collectivités locales should be created.
After the meeting a press release, with the headline L’AEAFCL : un complément pertinent au financement bancaire, was issued. See also an article in Les Echos (only available by subscription) on the subject.
Lars M Andersson
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Lars M. Andersson 
Lars M Andersson is a member of the Supervisory Board of Agence France Locale and Chair of the Strategy Committee within the agency’s board. He is also a member of the board of Fonds mondial pour le développement des villes (FMDV, Global Fund for Cities Development) as well as advisor to the English Local Government Association (LGA) in a project with the aim of creating a Municipal Bond Agency.
Local authorities around the world face considerable problems financing services and infrastructure projects. States are cutting grants and it is hard to access cost-efficient funding through the commercial banks. One decentralised alternative is a model in which the local authorities join their forces to raise capital in the international markets. These Local Government Funding Agencies (LGFA), also known as ‘Local Government Collective Agency’ or ’Municipal Bond Bank’, have proved effective in a number of countries, and the idea is spreading. Lars M. Andersson is a pioneer in the area of LGFA, with over 30 years of experience in the field. He initiated and became the first President of Kommuninvest – the Swedish Local Government Funding Agency in 1986. He is a frequently sought after advisor in a number of countries in questions of local finance and the LGFA model.
Bienvenue
Les collectivités locales du monde entier sont confrontées à d’énormes problèmes de financement des services et des projets d'infrastructure. Les États réduisent leurs subventions et il est difficile d'accéder à des financements rentables par le biais des banques commerciales. Une alternative décentralisée existe néanmoins ; il s’agit d’un modèle dans lequel les collectivités locales unissent leurs forces pour lever des capitaux sur les marchés internationaux. Ces agences de financement des collectivités locales (AFCL), aussi connues comme « organismes de financement municipaux » ou « banques d’obligations municipales », se sont révélées efficaces dans un certain nombre de pays, et l'idée se propage. Lars M. Andersson est un pionnier en matière d’AFCL, avec plus de 30 années d'expérience dans ce domaine. En 1986, il a créé le Kommuninvest — l'Agence suédoise de financement des collectivités locales —, dont il est devenu le premier président. Il est fréquemment sollicité dans un grand nombre de pays pour ses talents de conseiller en matière de finances locales, et au sujet du modèle AFCL.
Bienvenido
Las autoridades legales de todo del mundo afrontan serios problemas para financiar servicios y proyectos de infraestructura. Los estados estan reduciendo subvenciones y es difícil acceder a financiamiento costo-eficiente a través de los bancos mercantiles. Una alternativa descentralizada es un modelo en el cual las autoridades locales unen sus fuerzas para recaudar capital en los mercados internacionales. Estas Agencias de Financiamiento del Gobierno Local (AFGL), también conocidas como 'Agencias Colectivas del Gobierno Local' o 'Bancos de Bonos Municipales', han comprobado ser efectivas en varios países y la idea se propaga. Lars M. Andersson es un pionero en el área de las AFGL, con más de 30 años de experiencia en el tema. Él fundó y fue el primer Presidente de Kommuninvest—la Agencia Sueca de Financiamiento del Gobierno Local, en 1986. Es un consultor internacionalmente solicitado en los temas de financiamiento local y el modelo AFGL.
