Public Finance has published an interview with Lars M. Andersson about the project to create a local government bond agency in Britain.
Read the article here.
Update: Council bonds ”will offer cheaper borrowing”
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Update: A British municipal bond agency – article in Municipal Journal
In a front page article in Municipal Journal (MJ), written by Jonathan Werran and Heather Jameson, the project to create a British municipal bond agency is discussed. MJ has interviewed Sir Merrick Cockell, chairman of the Local Government Association, and Lars M. Andersson.
Read the article here.
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Update: Interview with Yves Millardet and Pierre Moscovici
In the latest issue of the French magazine Europe parlementaire (N° 15 April-May-June 2013) Yves Millardet is interviewed about the progress of the project of creating a new Local Government Funding Agency in France. Yves is one of the main advisors in this process.
In the same magazine there is also an interview with the French Finance Minister Pierre Moscovici about financing of local authorities.
Read both interviews in French here.
Read the interview with Yves Millardet translated into English here.
You can find the website of Europe Parlementaire at www.documentationparlementaire.fr
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Update: The French Minister for Local Government visited Sweden
Raphael Schmidt, Tomas Werngren, Anders Knape, Minister Marylise Lebranchu, Lars M Andersson
The French Minister Mme Lebranchu, together with Rafael Schmidt, visited Sweden last Monday. A meeting was held at the Swedish Local Government Association to which Lars M Andersson and Tomas Werngren, the present CEO of Kommuninvest, was invited. One of the topics for this meeting was the creation of a new local government funding agency in France, to which Kommuninvest is a major inspiration.
The Chairman of the Swedish Local Government Association, Anders Knape, also gave a general presentation of local public sector in Sweden, followed by a discussion about the equalization system between local authorities.
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Update: Interview with Lars M Andersson in La Gazette des Communes
The French weekly magazine La Gazette des Communes has recently published a series of articles around the project of creating a local government funding agency in France. This is done in an appendix to the magazine, which contains for example articles about Kommuninvest and the other Nordic agencies. Furthermore there is an interview with Lars M Andersson. A longer version of that interview was published on the website of La Gazette des Communes. All these articles are written by Jacques Paquier.
Here you find:
The appendix to La Gazette des Communes – original version
The interview with Lars M Andersson – original version
The interview with Lars M Andersson – English version
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Update: Critical Studies on the Public Public Partnership (PPP) model
Two reports about the Public Public Partnership (PPP) model, written 2010 and 2011 by Lars M Andersson, have now been published in a pdf on this site. The studies are in Swedish, but here is a short summery of the content:
The first report, written in 2010, contains a study of the advantages and disadvantages of using PPP as a way of producing local infrastructure investments.
Part I:
This part commences with a definition of what PPP is and how it is, in most cases, organised. The development from Margret Thatcher’s introduction of PPP to the present situation in Europe is described. The debate in the UK has now turned to more and more of criticism of this model.
The text puts specific focus on the use of PPP in the Nordic countries. In Sweden the first real PPP was the building of a new hospital in Stockholm, Nya Karolinska Solna. This project is described in the report. In Denmark, the local government funding agency, Kommunekredit, has introduced their own model for the financing through PPP.
Part I also contains an analysis of the driving forces behind PPP and how PPP is marketed to local authorities.
Part II:
Here you find an analysis of PPP, divided into the following areas:
▪ Cost-efficiency
▪ Financing
▪ Risk spreading
▪ Procurement
▪ Competition
▪ Future flexibility
▪ Secondary market performance
The reports conclude by arguing for that PPPs in most cases are not suited for public infrastructure investments. The capital cost of a PPP is practically always higher then if the public entity would have borrowed the capital on their own. Furthermore there is no proof that this is outweighed by higher cost-efficiency. That the risks are being spread to the private party to a certain degree is true, but the public side will always retain the most significant risks. Furthermore, the procurements of PPP-projects increasingly face a lack of competition on account of the high costs for private enterprises to participate in such a process. PPP can, with the very long-term contracts, work against future flexibility and the secondary market is a proof that the public sector is paying far too much for many PPP-projects.
The second report was written in 2011 and surveys the discussion about PPP in the UK. The following publications are analysed:
▪ September 2011: House of Commons, Public Accounts Committee, Lessons from PFI and Other Projects, Forty-Fourth Report
▪ September 2011: European PPP Expertise Centre (EPEC), Market Update – Review of the European PPP Market, first semester of 2011
▪ August 2011: House of Commons, Treasury Committee, Private Finance Initiative, Seventeenth Report of Session 2010-12,
▪ June 2011: European PPP Expertise Centre (EPEC), The Non-Financial Benefits of PPPs – A Review of Concepts and Methodology
▪ Maj 2011: New Local Government Network, Localist Capital Finance – the Challenges Ahead
▪ April 2011: National Audit Office, Lessons from PFI and Other Projects
▪ April 2011: Unison, The Role of Private Finance in Public Investment
▪ Januari 2011: European Services Strategy Unit, Research Report No. 4: The £10bn Sale of Shares in PPP Companies – New Source of Profits for Builders and Banks, Dexter Whitfield
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Comprendre le concept d’AFCL (Agences de Financement des Collectivités Locales)
Maintenant vous pouvez lire la présentation « Financement des Investissements des collectivités locales – comprendre le concept d’AFCL » en français.
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Update: UK House of Commons Communities and Local Government Select Committee visits Stockholm
The Committee has during two days (14 – 15 Jan) studied the Swedish health and social care system and the role of regional and local authorities. The visit is part of an inquiry into integration and funding of health and social care services. The background is the NHS (National Health Services) reform, which gives the local authorities a more important role than previously.
On the evening of January 14 a roundtable discussion during dinner was hosted by the UK Embassy at the residence of the Ambassador. This discussion was lead by Alison Thorpe, Chargé d’Affairs at the Embassy, and the Chairman of the Select Committee, Rt. Hon. Clive Betts MP.
Swedish experts on local government in general and health care in particular were invited to this occasion. Among these were Councillor Stig Nyman, Stockholm County Council, Councillor Marlene Burwick, City of Uppsala and Lars M Andersson. Mr Andersson took also the opportunity to discuss, with the Chairman of the Committee, the ongoing project to form a Local Government Funding Agency in England and Wales.
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Update: A new Local Government Funding Agency (LGFA) in Australia?
Ernst & Young is currently undertaking a piece of work for the Australian Government, which includes assessing the feasibility of establishing a national financing authority for local government in Australia. This builds on the finding in the report ”Strong Foundations for Sustainable Local Infrastructure” that there is a suboptimal use of debt finance in the local government sector which is contributing to the under provision of infrastructure.
In this work Ernst & Young have studied Kommuninvest and the LGFA in New Zealand.
The objectives of establishing an agency that ”Strong Foundations for Sustainable Local Infrastructure” puts forward are in short:
- To provide all councils in Australia with access to lower-cost debt finance,
- To establish a conduit between councils and capital lenders
- To provide financial and legal assistance and expertise to those councils with limited in-house capacity
- To provide finance to qualifying regional bodies which have responsibility for community infrastructure
- To apply rigour and discipline in financial planning
- To act as a “bank” with the ability to develop financial products for the private investor market
- To provide and facilitate due diligence and prudential oversight for the sector
In a mail I have received from Ben Carlton Jones, Ernst & Young Australia, he emphasises that that the proposal for a collective financing vehicle is still at a very early stage, and there is no policy commitment from the Government or any of the states or territories in Australia.
I and, surely, the existing local government funding agencies would warmly welcome an Australian agency.
Lars M. Andersson
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