Using the HM Treasury Green Book in local economic development

The HM Treasury Green Book made one of its rare appearances in the mainstream press at the end of last week. Although more familiar in local economic development circles, it’s not always understood, and is probably rarely read. It will be updated next week alongside the Government’s Spending Review and UK Industrial Strategy.

Being a regular user and having attended a good webinar last week from hosted by the Centre for Cities, I have set out some of mine and others’ thoughts on using the Green Book in the world of local economic development.

The Green Book is

• Commonly cited in local economic development decisions, but rarely read and understood
• Lenghkty guidance on appraising public project funding
• One of several documents needed to make the case for a project
• Being updated next week

It is not

• Simple for occasional users– that’s why clients rely on us to help.
• Tailored for local/regional projects – it should be used proportionally and alongside another guidance.
• A yes/no checklist – it supports, not replaces, decision-making.
• Likely to trump politics in planning and economics development decisions.

What is it used for?

The green Book informs our work on business cases for public investment in local and regional projects (e.g.  UKSPF, LUF, Towns Fund). We also use it to assess socio-economic impact for planning applications.

It outlines methods for value-for-money analysis like Benefit to Cost Ratio (BCR) and Net Present Value (NPV) to compare options for intervention, as part of a broader five-dimension business case model.

It includes guidance on place-based analysis and wellbeing, and we use it alongside other tools and supplementary guidance notes (e.g. MHCLG Appraisal Guide, HMT guides, employment density and additionally guidance).

If used well, it helps improve project alignment with strategic goals and value-for-money.

The Green Book is being updated next week. This is expected to provide greater clarity, and ensure projects throughout the country are compared fairly.

In the past, concerns have been expressed about it favouring greater investment in the South East of England at the expense of other parts of the UK.

If you would like to talk about how we can help develop a business case and demonstrate the value-for-money of your project, please contact us.