The UK government has initiated a fresh review of the Green Book, its official guidance for evaluating public spending decisions. Building on reforms first introduced in 2020 to address geographic disparities in investment, this latest review aims to better align spending with the country’s evolving policy priorities—particularly around regional growth and strategic regeneration.
In response, global consultancy Arup has published a detailed analysis of the Green Book’s current limitations and set out a roadmap for reform. While acknowledging some progress since 2020, the firm highlights persistent challenges that continue to undermine efforts at fair and effective investment.
Key Issues Persist
According to Arup, four critical issues still hinder the Green Book’s effectiveness:
Overreliance on Benefit-Cost Ratios (BCRs): This approach tends to favour already-productive regions, reinforcing regional imbalances.
Difficulty appraising transformational or place-based schemes: Innovative, long-term projects—often key to local regeneration—struggle to meet traditional appraisal metrics.
Lack of transparency in decision-making: There remains limited visibility into how investment decisions are evaluated and prioritised.
Bias toward high-productivity areas: The existing framework continues to disadvantage less economically advanced regions.
Why Reform Is Urgent
Arup argues that a renewed review is both timely and necessary to meet today’s economic and social challenges. While improvements have been made, the firm warns that guidance updates alone will not drive meaningful change. Structural reforms, behavioural shifts, and stronger regional capabilities must accompany technical revisions to the Green Book.
Targeted Recommendations
The publication outlines a series of practical changes to strengthen the appraisal framework. Recommendations are organised across three time horizons:
Short-term
Expand appraisal methods to value social, environmental, and long-term benefits.
Increase transparency by publishing more detailed rationale behind spending decisions.
Provide interim guidance for place-based project assessments.
Medium-term
Build local and regional capabilities in economic appraisal and evaluation.
Introduce alternative decision metrics that reflect policy diversity and local priorities.
Reform investment allocation mechanisms to reduce bias.
Long-term
Embed inclusive growth and spatial equity into the foundations of public investment.
Institutionalise behavioural change across departments to ensure consistent application of new guidance.
Create feedback loops between policy, funding, and impact evaluation to continuously improve practice.
A Call for Systemic Change
Arup’s central message is clear: technical guidance can only go so far. Lasting reform will require a holistic approach that combines improved appraisal frameworks with deeper changes in funding structures and institutional behaviour. As the UK looks to unlock economic potential across all regions, the new Green Book review represents a critical opportunity to embed fairness, transparency, and long-term thinking into public investment decisions.
The full publication, available on Arup’s website, offers further detail on how the Green Book can evolve into a more inclusive and effective tool for future government policy and spending.
