The language of social value is now firmly embedded across government, procurement and impact reporting. Increasingly, organisations claim that their approaches are “Green Book compliant” as a signal of credibility and robustness.
Having written the Valuation Chapters of the Green Book and Supplementary Guidelines for the Department for Work and Pensions, having focused on Wellbeing Analysis, and having spent much of my career working on the methods that underpin it, I find that this claim is too often made loosely. The HM Treasury Green Book is grounded in welfare economics and requires rigorous assessment of additionality, social value, risk, uncertainty, and distributional effects.
As social value becomes more influential in public spending and investment decisions, understanding what genuine Green Book compliance means is becoming increasingly important for policymakers, commissioners and practitioners alike. For officials designing tender evaluations, scrutinising supplier claims, or appraising programmes in their own departments, the difference between compliance in name and compliance in substance is now a material question. My aim in this piece is to set out, plainly, what that substance actually is.
The Green Book
The HM Treasury Green Book is the UK Government’s core guidance for assessing policies, programmes and projects involving public spending. Its purpose is to improve decision-making by ensuring that interventions are assessed not only in terms of financial cost, but in terms of their overall value to society.
The Green Book is structured around the Business Case Model, which is comprised of the strategic, economic, commercial, financial and management cases. At the centre of this framework sits the economic case, which is the core analytical component of the Green Book and the part most relevant to social value measurement.
The economic case assesses whether an intervention delivers genuine value for society once the full range of impacts on people’s wellbeing, including economic, social and environmental effects, have been considered. The Green Book’s preferred methodology for social value assessment is Social Cost-Benefit Analysis (SCBA), which compares the social costs and benefits of alternative options using a consistent monetary framework to identify the option that delivers the greatest overall social value.
Green Book compliance sets a high bar
When we speak about Green Book compliance with respect to social value measurement, it, therefore, comes down to alignment with the principles of SCBA, and the core methodological requirements are as follows.
- Full impact scope. Green Book analysis requires consideration of full social value, not just organisational or fiscal impacts. This means taking a UK-wide perspective that includes impacts on taxpayers, households, individuals and businesses. Social value requires comprehensive analysis, so impacts on health, education, jobs, housing, culture, security, the environment and wider wellbeing should all be considered.
- Credible counterfactuals. The Green Book requires a robust assessment of additionality: what would have happened anyway without the intervention. This counterfactual is essential to avoid overstating impact. For example, not everyone finding employment after a training programme would necessarily have remained unemployed without it. Simple before-and-after comparisons or self-reported attribution are not sufficient and create significant statistical bias. Robust statistical methods and evaluation approaches are set out in the Magenta Book (the Green Book companion for statistical analysis) and are essential to social value measurement.
- Robust valuation. A core principle of SCBA is that it assesses all impacts affecting social wellbeing, whether financial or non-financial. Financial impacts such as tax receipts, healthcare expenditure or productivity gains are already expressed in monetary terms. Caution must be applied, however, because some of these impacts, such as taxes, benefit payments and multiplier effects, often represent transfers within the economy rather than net additions to social value and should therefore be excluded from the analysis.
Non-financial impacts, including effects on health, crime, education, biodiversity, culture and pollution, require specialised valuation methods, known as non-market valuation. The Green Book recommends welfare-based approaches such as Revealed Preference, Stated Preference and Wellbeing Valuation and over the past decade I have worked extensively with the UK government on developing these methods and guidance. Simply applying arbitrary financial proxies, or accounting-based methods such as replacement costs, does not measure the changes in wellbeing required for social value and therefore falls short of Green Book standards.
- Accounting for risk and uncertainty. The Green Book explicitly recognises that appraisals may overestimate benefits or underestimate costs due to optimism bias, weak evidence or uncertainty in the data and assumptions. Sensitivity analysis, optimism bias adjustments and transparency around assumptions are therefore critical parts of robust social value analysis.
- Discounting future costs and benefits. Future costs and benefits should be discounted to reflect society’s preference for benefits received today rather than in the future. This ensures that interventions with costs and benefits occurring at different points in time can be consistently compared.
- Distributional impacts. The Green Book is also concerned with who is impacted. Distributional effects increasingly sit at the centre of public policy, particularly in areas linked to inequality and place. Social value assessments must therefore consider how costs and benefits are distributed across different groups and places, and where impacts are large, distributional weights should be applied to reflect the fact that greater social value is generated in more deprived areas.
Conclusion
As social value becomes more deeply embedded in public policy and investment decisions, the quality of the underlying analysis matters more than ever. Robust Green Book-compliant approaches improve decision-making by helping policymakers identify which interventions genuinely deliver the greatest benefit for society, while strengthening transparency and public trust.
My own view is that the challenge for the sector is therefore not simply to measure more social value, but to measure it more rigorously and consistently. Improving the quality of social value analysis and ensuring genuine Green Book compliance will require stronger methodological understanding, rigorous analytical training, clearer standards and greater quality assurance across the sector. The work my team and I are doing on Thrive’s Impact Evaluation Standard is one contribution to that effort, but the bigger task belongs to the sector as a whole.
If you would like to find out more about the Impact Evaluation Standard and the Thrive platform, and how they can benefit your organisation, please get in touch.
Useful references
HM Treasury (2026), The Green Book: Central Government Guidance on Appraisal and Evaluation.
HM Treasury (2020), The Magenta Book: Central Government Guidance on Evaluation.
Fujiwara, D. and Campbell, R. (2011), Valuation Techniques for Social Cost-Benefit Analysis, HM Treasury / Department for Work and Pensions.
HM Government (2020), The Social Value Model (PPN 06/20, now PPN 002).