A New Local Government Agency in the United Kingdom

The English Local Government Association (LGA) is now in the process of studying the possibilities of forming a Municipal Bond Agency. Lars M Andersson is advising the LGA in this project.

LGA logoThe English Local Government Association (LGA), together with the Welch Local Government Association (WLGA), started to explore the possibilities of creating a Municipal Bond Agency in 2011. This project was carried out in cooperation with Local Partnerships, an entity jointly owned by the LGA and the Treasury (50/50). In January 2012 an outline business case was presented. This action probably triggered the PWLB to lower their rate the same year, which in its turn was one of the reasons why the Municipal Bond Agency project did not gain momentum at that time.

The question of creating a Municipal Bond Agency was raised again by the LGA in 2013, which commissioned three advisors to review the Outline Business Case of 2012 and to suggest a way forward. Aidan Brady (ex. Deutsche bank) was the lead advisor with Francis Breedon (Professor of Economics and Finance at Queen Mary University, London) and Lars M Andersson. Their report was delivered in March 2014, presenting evidence why a Municipal Bond Agency should be created. The report was approved by the LGA and this is now followed by talks with local governments, but already in November 2013 around twenty local authorities agreed to work with the LGA on creating the agency. Among those local authorities one can find Birmingham City Council, Cambridgeshire County Council, City of London Corporation and Newcastle City Council.