HM Treasury has published its long-awaited refresh of the Green Book guidance for appraising projects, policies and programmes – and says the bible for evaluating departmental spending proposals is now 40% shorter.
The updated guidance includes changes designed to make investment decisions more regionally balanced, after concerns that previous guidance benefitted London and the South East above other areas.
Those measures were pledged in June last year, after a review of whether the Green Book was being used in a way that ensured fair, objective and transparent appraisals of projects in other parts of the nation.
HM Treasury said the new Green Book makes sure that investment decisions are no longer based solely on single metrics such as benefit-cost ratios, and that these metrics are not wrongly used to compare choices across different regions or between urban, rural and coastal communities.
It said spending decisions must take into account the full range of impacts of different investment options, giving a fair hearing to every part of the UK.
The Treasury said the revisions will affect the way government assesses all capital spending, from the regeneration of town centres to new and upgraded transport links.
While the guidance still recognises the importance of robust evidence and analysis, it is clear that cost-benefit ratios must not be used as “a crude pass/fail test”, HM Treasury said.
It added that ministers will now see a more rounded assessment of a proposal’s impacts, rather than being “guided by one headline number".
Chancellor Rachel Reeves said the latest incarnation of the Green Book would rebalance the way that investment decisions are made.
“For too long, people outside of London and the South East will have felt the system is working against them and their community, not for them,” she said. “I know full well that everyone has the potential to contribute to our country’s growth and success regardless of where you live.
“These groundbreaking reforms are part of a new approach from the Treasury that truly makes a long-lasting difference for all areas across the country – ensuring they get the fair hearing they deserve and can have confidence in how government invests into where they live.”
The new Green Book guidance has been developed with devolved administrations, mayoral combined authorities and local councils.
Mayor of the Liverpool City Region Steve Rotheram said areas like Merseyside had previously lost out because the system had been “stacked against” them.
“Projects that could genuinely change lives in the North were too often overlooked – marked down by a rulebook that didn’t understand local needs and told communities up here that they were literally worth less,” he said.
“This might sound like a technical change, but we shouldn’t underestimate just how big a difference it could make. This could unlock billions in investment for the North in the years ahead.”
The new Green Book can be read here.