Unveiling Potential Changes to Regional Investment Regulations with the Green Book?
The ongoing review of the UK government's Green Book, a guide for economic development professionals on how to get their projects approved, is focusing on ensuring fair, objective, and transparent investment assessments across all regions of the country. The Green Book, an internationally recognised good practice, sets the framework for evaluating costs, benefits, and risks of government projects to achieve policy objectives.
Concerns had been raised about a potential systematic bias favouring London and the Southeast in investment decisions. However, the 2025 review, announced by the Chancellor, found no conclusive evidence that the Green Book’s methodology itself is biased towards certain regions. Instead, the review identified six key issues needing attention to improve public sector appraisal.
In response to concerns about regional imbalances, the Government has committed to updating the Green Book to support place-based business cases. This means the revised Green Book will better reflect the value and specific needs of investments in regions outside London and the Southeast, encouraging balanced economic growth nationwide.
The Spending Review 2025 supports this approach by providing the largest real-terms settlements to the devolved governments of Scotland, Wales, and Northern Ireland, as part of a broader strategy to back investment, jobs, and growth across all parts of the UK, not just the capital region.
The review’s focus is on clarifying and improving the appraisal processes to avoid any inadvertent regional bias. This will enable fairer investment decisions that promote growth in all UK regions, including traditionally underinvested towns and cities outside London and the Southeast. The revised Green Book is expected to better capture all benefits and costs of an intervention, including externalities like placemaking, health, education, transport, environment, culture, and amenity impacts.
The practice of Land Value Uplift (LVU), the principal economic benefit used to justify a property-based renewal project, is expected to remain a part of the Green Book, despite criticisms. However, the use of Distributional Appraisal, which addresses the distribution of costs and benefits, may receive further attention in the Green Book review.
The Homes England economics team is leading a debate on Measuring Social Value, with AMION Consulting contributing to the first paper in this series. Simon Dancer, a Board Member of the Institute of Economic Development and a Director at AMION Consulting, is among those pushing for a rethink in Whitehall regarding the Green Book.
The review aims to support decisions on public investment across the country, including outside London and the Southeast. The Green Book emphasises the importance of considering social value beyond economic market efficiency, recognising that regeneration can lead to a broad range of external impacts that are not fully captured through a simple land value uplift assessment.
[1] HM Treasury (2021). Green Book Review: Call for Evidence. [online] Available at: https://www.gov.uk/government/consultations/green-book-review-call-for-evidence [2] HM Treasury (2021). Spending Review 2021: Levelling Up the UK. [online] Available at: https://www.gov.uk/government/publications/spending-review-2021--2/spending-review-2021-levelling-up-the-uk [3] HM Treasury (2021). Spending Review 2021: Devolution Settlements. [online] Available at: https://www.gov.uk/government/publications/spending-review-2021--2/spending-review-2021-devolution-settlements
- To address regional imbalances, the Government is updating the Green Book to support place-based business cases, ensuring better reflection of investments outside London and the Southeast, fostering nationwide balanced economic growth.
- The revised Green Book will capture all benefits and costs of an intervention, including externalities like placemaking, health, education, transport, environment, culture, and amenity impacts, beyond just the economic market efficiency.
- The Homes England economics team, in collaboration with AMION Consulting, is leading a debate on Measuring Social Value, with a focus on rethinking the Green Book's approach to regeneration, considering the broad range of external impacts.
- The 2025 Spending Review supports this approach by providing the largest real-terms settlements to the devolved governments of Scotland, Wales, and Northern Ireland, a strategic move to back investment, jobs, and growth across all regions, not just the capital.
