CPP response to changes to the Green Book

25 November 2020


2 minute read

We welcome the changes announced today to the Green Book, alongside the wider package of measures to support levelling up and social infrastructure, and believe they are steps in the right direction toward delivering green inclusive growth

CPP contributed our position to the HMT review, noting that the Green Book and its application hindered levelling up “that it supports the prioritisation of the wrong thing – place-blind economic efficiency” and that it failed to sufficiently encourage the analysis of projects’ local impacts. We are pleased the review shared these conclusions, recognising the appraisal process has become “heavily reliant on a Benefit Cost Ratio that is not aligned to the decision makers’ objectives”.

The new Green Book contains changes of emphasis that aim to address this problem. It relates how projects should be measured against strategic objectives such as net zero or levelling up; it strengthens guidance to assess local impacts. If these changes are accompanied by the intended change in appraisal behaviour, they will be successful.

It will require continued effort to ensure appraisal behaviour is changed. The changes to the Green Book text are primarily of emphasis, rather than substantive changes to the intended methodology. For example, the new Green Book does not present a single-figure alternative to the existing measures of the value of a project (the BCR and NPSV) and so it will remain tempting for analysts and decision makers to over-rely on these simple measures.

Assuming they are effective, the changes will go some way to helping inform ministers of the impact of their decisions. However, the Green Book does not make decisions and these rule changes will not, on their own, change anything. Ultimately, it is down to ministers to make the decisions that prioritise levelling up.