Last week, the government announced changes to the Green Book along with the spending review announcements and publication of the National Infrastructure Strategy. The review was announced at the Budget 2020 with the aim to “make sure that government investment spreads opportunity across the UK.”

The Green Book is the government’s guidance on options appraisal and applies to all proposals that concern public spending, taxation, changes to regulations, and changes to the use of existing public assets and resources. It is vital for designing interventions that both achieve government policy objectives and deliver social value for money. It is supported by detailed HM Treasury guidance on developing business cases which reflects its principles, and by departmental guidance that addresses issues specific to their policy concerns.

The review was set up in response to concerns that the government’s appraisal guidance may mitigate against investment in poorer parts of the UK and undermine the Government’s aim to “level up” these areas. Given the UK’s recent legal requirement to achieve net zero carbon emissions by 2050 and the 25 Year Environment Plan (2018), the review has also revisited the guidance included in the 2018 Green Book on appraising environmental impacts.

Here are some of HM Treasury’s responses to the Green Book review:

• A stronger requirement to establish clear objectives from the outset that must be the drivers of the policy development and appraisal process - looking across departmental and other silos where necessary.
• Stronger and clearer advice on what constitutes value for money, how to appraise it, and what information to provide to decision-makers.
• Appropriate emphasis on the analysis of place-based impacts, including for projects and programmes where these are not the objective of the intervention. There will be a new expectation that appraisal must assess the likelihood and extent of differential place-based impacts where it appears likely to be significant, or else explain why it is unnecessary.
• Measures to improve analysis on differential impacts, including in assessments stemming from the Equality Act public sector equality duty, and under the Government’s ‘family test’.
• An expert review into the application of the discount rate for environmental impacts. This will scrutinise the current guidance on environmental valuation and discounting and investigate the case for using the same discount rate as currently applied to the valuation of life and health effects.

For more details on the changes announced please see here.

CIHT will continue to work alongside other professional bodies with HM Treasury and the Department for Transport to understand the changes and develop new approaches to appraisal. 

CIHT is interested in our members views on the changes and on transport appraisal. Click here to take part in the conversation on CIHT Connect.