‘Green Book’ alterations to end north-south divide

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.”