Rail (UK)

‘Green Book’ al­ter­ations to end north-south di­vide

- Business · United Kingdom · HM Treasury · U.K. Treasury · Powerhouse

The Govern­ment has an­nounced that it will make changes to the Trea­sury’s ‘Green Book’ and the way in which Trea­sury of­fi­cials ap­praise public spend­ing pro­pos­als.

It fol­lows the con­clu­sion of a re­view set up in re­sponse to crit­i­cism that cur­rent guid­ance

“may mit­i­gate against in­vest­ment in poorer parts of the UK”.

The re­view ex­am­ined cur­rent guid­ance on ap­prais­ing en­vi­ron­men­tal im­pacts in view of the Govern­ment’s legally-bind­ing com­mit­ment to end the UK’s con­tri­bu­tion to to­tal global green­house emis­sions by 2050.

It con­cluded that ap­praisal ad­vice and de­ci­sions “can rely heav­ily on a Ben­e­fit: Cost Ra­tio [BCR] that is un­re­lated to a com­pelling strate­gic case, in or­der to jus­tify the project”.

While the BCR is a use­ful met­ric for cap­tur­ing quan­tifi­able costs and ben­e­fits, the re­port said that “there is a ten­dency to place an in­ap­pro­pri­ate em­pha­sis on it”.

The ‘Green Book’ has there­fore been up­dated to make it clear that as­sess­ment of value for money is broader than BCR alone, and that it should “as­sess all the rel­e­vant costs and ben­e­fits to so­ci­ety, not just nar­rowly eco­nomic ones”.

HM Trea­sury says that it has there­fore taken a “broader ap­proach” to pro­pos­als in the cur­rent spend­ing re­view - fo­cus­ing more on strate­gic align­ment with Govern­ment ob­jec­tives, place­based im­pacts and wider rel­e­vant con­sid­er­a­tions, in­stead of rank­ing pro­pos­als on BCR.

Up­dated train­ing will now be fo­cused on Trea­sury spend­ing teams and de­part­men­tal in­vest­ment com­mit­tees, ahead of the next spend­ing re­view in 2021.

Lord Jim O’Neill, vice-chair­man of the North­ern Pow­er­house Part­ner­ship, said: “It’s hard to over­state just how im­por­tant

‘Green Book’ re­form could be for the North. We’ve been call­ing for this for a num­ber of years. It should prove to be a key turn­ing point in un­lock­ing fur­ther in­fra­struc­ture in­vest­ment in the North for decades to come.”

Trans­port for the North Head of Pol­icy, Strat­egy, Eco­nomics and Re­search Tim Foster added: “It’s no se­cret that the North has his­tor­i­cally re­ceived less fund­ing that the

South. Anal­y­sis of projects over the decades has re­vealed a sys­temic im­bal­ance in the way de­ci­sions are made that has ex­ac­er­bated the much-re­ported di­vide.”

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