Green Book Review

Sarah Russell Excerpts

Wednesday 2nd April 2025 Westminster Hall

[Mrs Sarah Russell (Congleton) (Lab)]

I beg to move,

That this House has considered the Green Book review.

It is an honour to serve under your chairship, Mr Pritchard. I thank all hon. Members who have come today to talk about the Green Book. Our constituents all know that something is very clearly not right and has not been right for a very, very long time. They pay their taxes but they cannot see things getting any better. In Congleton, I cannot see any evidence of any significant infrastructure spending for many years, except for where it has been facilitated through house growth. Government money does not appear to have been involved in significant ways for a long time.

The previous Government talked a good game about levelling up the north, but actual investment never followed, which is why my constituents voted for change. In my area, I want to see the Middlewich bypass, the A50/A500 north midlands manufacturing corridor, massive investment in improving our electricity grid, and all kinds of other changes and improvements, but I can see very clearly that something is not right.

Total capital public spending per person in the north-west in 2022-23 was £13,297 per year; in London, it was £14,842. Something is being done to allocate money in that way. The Green Book is the guidance issued by His Majesty’s Treasury on how to appraise policies, programmes and projects. The five-case model is the required framework for considering the use of public resources. They must be used proportionately to the costs and risks involved, taking account of the context in which a decision is taken.

The five-case model involves a strategic dimension—what the case for change is, including the rationale for the intervention, the current situation, what is to be done and so forth. There is an economic dimension and a commercial dimension: can a realistic and credible commercial deal be struck, and who will manage which risks? There is a financial dimension and a management dimension—are there realistic and robust delivery demands, and can the proposal be delivered?

[Jim Shannon (Strangford) (DUP)]

The hon. Lady led the charge in the 9.30 am debate, and she is doing the same at 4.30 pm—well done for both. I just want to back her up. Does she agree that the Green Book review has to have a view to each area of the United Kingdom, and must not simply point all roads to London and the south-east? We are all aware that, in other areas, UK policies and procedures that work well in London do not translate to rural local authorities, so we need a review of that. Is the hon. Lady saying exactly that?

[Mrs Russell]

I certainly agree.

We are pleased that the Treasury has initiated a review into the Green Book and we believe it is an opportunity to once and for all address a range of key issues that have undermined successive Governments’ attempts to rebalance our regional economies. We must grasp this opportunity. We believe that the review must be done with ambition and a willingness to challenge underlying customs and practices. In particular, it needs to learn from the successes and failures—largely failures, I would say—of previous Green Book reviews, in particular the 2020 review.

The review recommended that the locational effects be understood via place-based analysis, with the benefits of any intervention valued specifically for the area, hence enabling any transformational impacts to be properly recognised. But once again, those recommendations do not appear to be generally reflected in practice, particularly in the application of Department-level appraisal guidance. It is vital that the current review addresses that. I believe that considering options in the context of place and properly valuing the transformational impacts of interventions is crucial if we are to realise the potential of the north-west and all our regions.

We need to simplify and speed up our Green Book processes. The guidance is enormously long and incredibly complex. It has multiple supplementary documents adding up to thousands and thousands of pages. Its changes, subtleties and intent get lost within the complexity, and practice remains unchanged. That very complexity leads to a desire for a metric that cuts through, and that probably explains why the business case thresholds remain so dominant. That is probably how the weighting towards expenditure in London and the south-east continues to predominate.

There is a consultancy industry around the Green Book, and that raises the cost of developing a successful business case. It also makes it very difficult for smaller local authorities to successfully put together a business case because the complexity of doing so is absolutely mind boggling. Frankly, the whole thing is just a bunch of piffle—we need to make this very simple and outcomes driven. We need to really slim it down and for it to be in a format that our local and devolved mayoral authorities, as we acquire one in Cheshire and Warrington, will be able to actually use in a practical way.

We need a stronger focus on place. We need to really look properly at where money has been spent historically and where we therefore need investment. We need to weight that specifically towards areas that have not received investment so that we can redress the imbalance in which transport spending in London vastly outweighs that in the rest of the country.

When I moved to the north of England, I was so shocked when I first used the railway network; I was in my 20s and the Pacer trains were still being used. Those trains were fashioned out of bus chassis and carried on being used for 37 years. They were given a maximum lifespan of 20 years; they were supposed to be a very basic short-term thing to start with, and the level of shoddiness was just astonishing. That is what we are always given in the north-west. We are given the cast-offs, and then we are expected to make do, and then what we are expected to make do with is expected to continue way beyond its intended lifespan. That has been going on now for as long as anyone can remember, and our economy then reflects that very sad point.

I know the Labour Government are focused on improving the situation. I would really like us to work extensively together on that. I know that the Green Book review will be carried out at pace, and that the Government have announced these plans. That cost-benefit analysis needs to be fundamentally changed so that we can shift capital expenditure out to our regions at pace. By that, I do not mean demanding, as the last Government did, that local areas produce a shovel-ready project at the drop of a hat, so that they could rush spending through and make it look as if they were doing something for the north of England. I mean a fully considered set of proposals that enable regions to be fully developed through our devolved mayoral authorities, which I think are going to be a spectacular improvement for many areas of the north, and that will enable us to have proper economic development in the north of England.

Alistair Darling said:

“it isn’t just about pots of money or building the odd rail or extending a road. It’s about quality of life. It’s about making places that people want to go and live in, where they feel confident, they can live there, their children can grow up there, there’s opportunities there, and they don’t have to go somewhere else to get on, as it were. None of this is beyond us. Most other countries do it, and I don’t see why we shouldn’t either.”

That was quite some time ago, but it applies more than ever now.

--- Later in debate ---

[Richard Fuller (North Bedfordshire) (Con)]

It is a great pleasure to serve under your chairmanship, Mr Pritchard. I congratulate the hon. Member for Congleton (Mrs Russell) on calling this debate, and the nine other speakers on speaking with great passion about the potential of their constituents and their constituencies, as well as about the role that the Green Book review—a rather obscure topic—can play in seeking to unlock that potential. I note that they spared the blushes of the Chancellor. When she announced the review, to unlock the potential of which those hon. Members are so hopeful, she announced further growth measures in the south and south-east of the country. That shows the difficulties there are in achieving some of the objectives. The hon. Member for Mid Cheshire (Andrew Cooper) was kind enough to say that those objectives were the intention of the 2020 review: levelling up this country.

I am, perhaps, an ironic choice to respond in this debate. If I may stretch your tolerance, Mr Pritchard, I will mention some things about the area of the country that I represent, North Bedfordshire. To give hon. Members some sense of the disparities, let me enumerate some of the growth potential projects going on in my county: our housing growth rate is already two and a half times the national average; we have a proposal for a solar farm in my constituency, which will be seven times the size of the largest one in the country; we have the country’s largest road project at Black Cat roundabout on the A1; we have a proposal for a railway line, which will be the third largest railway construction project in the country; and we have the doubling of the capacity of Luton airport to bring people into the country. We are also awaiting, when the Treasury finally pulls its finger out, a potential £10 billion investment for Europe’s theme park from Universal Studios, which will then start a whole new range of investment potential in the south. The hon. Member for Congleton has the right person responding from the Opposition to answer some of her points—because frankly, that is too much for one area to take at one time.

The 2020 review mentions some points that have been repeated today, and the allegations were: systematic bias towards London and the south-east; the tyranny of benefit-cost ratios; overlooked unmonetised benefits; no allowance for transformation or other complex effects; and that guidance was responsible for strategic policy faults with no focus on where, or by whom, effects are felt. Those allegations have been echoed today, but I have to say to Members that the findings were that there were no systematic methodological biases in the process. However, there were significant problems in understanding of the Treasury’s five case model, leading to significant poor practice in the application of the Green Book, and some changes have been made as a result.

As I thought Members would raise the issue of disparities in expenditure, and whether those changes had any effect, I went to table 9.4b of the “Public Expenditure Statistical Analyses 2024”, which enumerates the public expenditure on services per head in real pounds between regions. It splits that between current expenditure and capital expenditure, which is the focus of today’s debate. I have to tell Members that, if we look at those statistics between the years 2018-19 to 2022-23, real capital per head went down by 3% in the east and by 5% in the south-east. Real capital per head did go up by 20% in London, but it also went up by 25% in both the north-west and the north-east, by 24% in the west midlands and by 22% in east midlands. That is not to say that everything is done, but it is important to build on the progress that is being made. There is a lot more commonality here than we perhaps think.

[Mrs Russell]

Will the hon. Member give way?

[Richard Fuller]

I am afraid that I am very short on time. I would love to give way, but I know Mr Pritchard, and he will not give me any more time.

The view that focusing on the BCR as the answer is incorrect. East West Rail, which goes through my constituency, has a BCR of 0.3. It loses money, but the Treasury still wants to push ahead with it—that is another question for the Treasury. There is not sufficient quantification, so we do not understand what those benefits may be for people.

I have one final question for the Minister, as I have only a little time—I do have some other questions, which I will send to him. Can he look at the implementation of the Public Services (Social Value) Act 2012? Getting that done is really hard for small businesses and social enterprises in particular.

--- Later in debate ---

[Mrs Russell]

I thank everyone who has contributed to the debate. I absolutely accept that, underlyingly, we need a framework for evaluating projects. I am immensely looking forward to the 10-year infrastructure strategy, which is a real opportunity for the Government to grasp and fundamentally change how we are investing in the north of England; that is encapsulated by the point made by my hon. Friend the Member for Warrington South (Sarah Hall). We need to stop our communities being seen as low-return risks rather than high-potential communities. I want growth to stop going to where growth already is, as my hon. Friend the Member for Leigh and Atherton (Jo Platt) said; I want growth going where people are, in the north-west of England.

Question put and agreed to. 

Resolved, 

That this House has considered the Green Book review.