Green Book Review

Andrew Cooper Excerpts

Wednesday 2nd April 2025 Westminster Hall

[Andrew Cooper (Mid Cheshire) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Pritchard, and I thank my hon. Friend the Member for Congleton (Mrs Russell) for securing this timely debate. It is a pleasure to follow my hon. Friends the Members for Loughborough (Dr Sandher), for Warrington South (Sarah Hall) and for Cramlington and Killingworth (Emma Foody). I do not believe that there is any rule about repetition in this Chamber, but I will none the less do my best to express my points in a new and interesting way.

The Green Book is part of a colourful spectrum of current Government guidance and standards documents, which alongside the Aqua Book, the Magenta Book, the Orange Book and 19 other publications and pieces of supplementary guidance forms the basis of how the Treasury appraises policies, programmes and projects. On top of that, several Departments have issued their own interpretation of the guidance as it applies to them, thankfully avoiding extending the colourful metaphors any further.

That complexity—well over 1,000 pages of guidance—is at the root of the criticism of the small industry and almost mysticism around navigating the assessment process and of the poor outcomes to which it leads. Local authorities and other public bodies, which have been grappling with cuts to their non-statutory functions for more than a decade, are the ones putting forward investment cases, yet they often lack the capability and capacity to deal with that complexity, which has several unintended consequences.

My hon. Friend the Member for Congleton referred to the expensive consultant bonanza that that complexity has created. It also creates a world in which those organisations that do have the capacity, or indeed the consultancy budget, are more likely to succeed, not necessarily those areas that are most in need of investment.

Most importantly, that complexity has led to an over-reliance on benefit-to-cost ratio to drive decision making. Because salaries are higher in London and the south-east, and because high-value sectors tend to be located here, it will always be easier to demonstrate a higher return on investment than elsewhere in the country.

We have a few decades of evidence that says that that is exactly what happens. Over the period from 2008 to 2024, had Governments instead chosen to fund the greater south-east at the same level as the England-wide average for growth spending, they would have freed up over £100 billion. That money could have been used to invest in infrastructure and people, narrow inequalities and address specific regional needs.

The Johnson Government’s review into the Green Book in 2020 was supposed to fix that. It said:

“Current appraisal practice risks undermining the Government’s ambition to ‘level up’ poorer regions and to achieve other strategic objectives unless there is a step change improvement.”

It went on to make a series of recommendations to improve practice. However, it is widely recognised that little has actually changed. The Department for Transport guidance, for example, still includes value-for-money categories derived entirely from the BCR. Local authorities tell me it is still common practice for response letters to open with sentences such as, “We note that the BCR for the proposed scheme is 1.8.” That belies the intent of the 2020 review.

To my knowledge, the terms of reference for the 2025 review have not been published, but when they are they must seek to address those points on culture. The review must end the arbitrary BCR thresholds across Government. It must simplify, increase public transparency on calculations and require publication of judgments on why conclusions have been drawn and decisions made.

Most importantly, we must not lose sight of what we are trying to achieve. It is imperative that we address regional inequality. Doing so is a moral, political and economic necessity. We have allowed some parts of the country to be left out, to the detriment of economic regeneration and social cohesion. We have overheated other parts of the country, leading to a housing crisis and even more pressure on the cost of living.

We should seize the opportunity to rebalance public spending, drive economic growth in areas that have suffered from under-investment, and use the strategic focus that comes with devolution to make investment go further. This is the moment—the opportunity—not just to talk about handing power and money to our regions, but to set the rules to ensure that that happens.

[Mark Pritchard (in the Chair)]

That was an excellent example of a four-minute speech, with no repetition either—well done.

--- Later in debate ---

[The Parliamentary Secretary to the Treasury (Torsten Bell)]

It is a pleasure to have you overseeing us today, Mr Pritchard. Like everybody else, I congratulate my hon. Friend the Member for Congleton (Mrs Russell) on securing the debate. I also thank all Members for setting out their views, which are in themselves important contributions to the Green Book review that His Majesty’s Treasury is undertaking, and which is our focus this afternoon. Before I respond to the specific points raised, I will spell out what the Green Book is and what it is for.

The Green Book is a technical guidance on how to assess the costs and benefits, and the opportunities and risks, of different options to achieve Government objectives. It is not a decision-making algorithm or a test that must be passed. It is a framework for identifying and assessing different options. It is an important framework but, as lots of Members have rightly pointed out, it should be just one input into decision making. It is ultimately for Government, both national and regional—who are held to account by this place, in our case—to decide on policy objectives and spending choices. We must not evade our responsibilities behind technical frameworks.

This Government have listened to the concerns raised about that framework, such as concerns from our mayors, including my friend Steve Rotheram, and Members present today. That is exactly why the Chancellor announced a review in January: to ensure that all regions get a fair hearing when it comes to the allocation of public funds. The review is looking at potential problems with the guidance itself, as well as how that guidance is being applied by the Treasury, and how it is being applied by other Departments or public bodies. Since January, the Treasury has been in conversations with a whole range of organisations and individuals, regional and national, and this debate offers us the opportunity to hear the well-considered views and perspectives of Members. I assure all Members that what they have said today will have been heard in the Treasury, and will influence that review as it is finalised ahead of the spending review in June.

The frustration that many people feel on this subject is entirely understandable. It is rooted ultimately not in technical questions about cost-benefit analyses, but in unacceptable outcomes, not least flatlining wages for the UK as a whole over the past decade and a half—and, for some areas, abandoned during the 1980s and sidelined during 2010s, for far, far longer.

The frustration is understandable, when low investment manages to combine being both the cause of this economic decline and a visible sign that it is taking place, not least when our roads are riddled with potholes, our trains—whether they are Pacers or not—are unreliable and our housing stock is deeply inadequate. Public, not to mention private, investment has simply been far too low for far too long. It has too often not reached every part of the country, as my hon. Friend the Member for Warrington South (Sarah Hall) set out and as any rail user in Wales—particularly in Swansea, since the electrification does not reach our great city—will say.

For this Government, growth in every part of the country is the goal, because Britain is scarred by deep regional inequalities, as my hon. Friend the Member for Crewe and Nantwich (Connor Naismith) set out eloquently. Our shared growth is the goal, and higher investment is a necessary, if not sufficient, condition for it. That is why we have ended the public investment boom-and-bust cycle, with £113 billion higher investment this Parliament, sustaining public investment at levels not seen since the 1970s. We will work side by side with our mayors, local leaders and devolved Governments to support all regions to achieve their potential, investing for the long term in the infrastructure, transport and housing needed to ensure that all parts of the UK benefit from growth.

We are supporting empowered local leadership with the publication of the English devolution Bill, which my hon. Friend the Member for Congleton mentioned, and we are moving away from the short-termist, competitive approach to local funding so that we can instead support local leaders to drive growth in their areas. That includes implementing this month the first integrated settlements for Greater Manchester and the West Midlands combined authorities, ahead of the roll-out to other mayoral areas.

We are investing in economic infrastructure across the country: we are committed to the trans-Pennine upgrade—the largest investment in northern rail for decades, with a further £415 million announced last week; we are backing West Yorkshire mass transit; and £4.8 billion for the strategic road network will deliver critical road schemes across the country. We are working with Doncaster council and the Mayor of South Yorkshire on their plans to reopen the south Yorkshire airport. There are places outside the north-west that will also classify themselves as being in the north and feel left out by this discussion, so I am getting some of them in too; we will set out further details of our plans for infrastructure across the whole UK in the 10-year infrastructure strategy, which is to be published in June.

My hon. Friend the Member for Leigh and Atherton (Jo Platt) and the hon. Member for Hazel Grove (Lisa Smart) both rightly noted that we must care about a wider range of social factors, including deprivation, when making investment decisions. They are both right.

My hon. Friend the Member for Congleton raised the issue of consultants—an issue that is emerging again in the review that is under way. Of course, while there are times when the use of consultants is value for money, more needs to be done to improve the capacity of local government in this area, and by national Government to ensure that their asks in that regard are proportionate and sensible.

Other Members, including my hon. Friend the Member for Cramlington and Killingworth (Emma Foody), have made a powerful case for specific projects, particularly transport projects. I am sure that they will continue to bend the ears of each and every Department for Transport Minister, or, in some cases, the Mayor of Greater Manchester, where they are the appropriate decision maker, and I was glad to hear that everybody recognised that that should happen within important public spending constraints.

[Andrew Cooper]

Does the Minister agree that in recent years we have seen such a reduction in local government funding that local governments have lost the capacity to develop long-term transport projects and a pipeline of projects, so when the Department for Transport comes along and says, “We’ve got 20 million quid burning a hole in our pocket—what can you spend it on?” many authorities are not in a position to be able to do that? Is that something he thinks needs to be rectified as part of the comprehensive spending review in the 10-year transport plan?

[Torsten Bell]

My hon. Friend is completely right about both points. We need to address that, partly by providing decent funding for local government. Members will have seen that being laid out over the last few months since the autumn Budget, but it needs to continue. We need to make sure that, instead of setting out short notice, competitive pots between areas, we empower local leaders to decide the right answers for their areas—and that is exactly the approach we are taking.

My hon. Friends the Members for Loughborough (Dr Sandher) and for Bolton North East (Kirith Entwistle) rightly noted that we need to consider the dynamic effects of investments—a point also powerfully made by Diane Coyle in recent years. I agree. There are questions about whether the implementation of the 2020 review has been followed through in that regard. I can reassure my hon. Friend the Member for Loughborough that the Department for Transport does use the same value for commuter time for all parts of the country. He may think it is not enough or that it is too much, but it is the same pounds and pence in every part of the country for commuter times specifically.

I can reassure the hon. Member for Hazel Grove that the Green Book is not preventing this Government from delivering a step change in green investment. If the hon. Member for North Bedfordshire (Richard Fuller) had had time, I am sure he would have said that we are investing too much in green projects—or at least his party’s leader would.

My hon. Friend the Member for Mid Cheshire (Andrew Cooper) noted that there are real dangers of overreliance on BCRs. He is right: decision-making should always be rooted in strategic objectives, or what he called, “What are we trying to achieve?” Closing regional gaps is exactly what our objective should be, and it is for this Government.

The shadow Minister, the hon. Member for North Bedfordshire, took his life in his hands by listing the investments happening in his part of the south—broadly defined—although he may have saved himself by pointing out that maybe it was excessive. I look forward to his letter.

As we have heard, investment matters, and it matters that all parts of this country get a fair hearing when it comes to infrastructure investment. This Government understand that, which is exactly why we are acting to support growth across all regions. Once again, I congratulate my hon. Friend the Member for Congleton on securing this debate.