The Green Book is the government’s central manual for appraising public sector projects and programmes. It sets out how to evaluate costs, benefits and risks, and its methods determine which projects receive capital funding.

The document has long been criticised for reinforcing regional disparities by favouring projects with the highest short-term returns, often in already prosperous areas. The Government committed to rehashing it at last year’s Spending Review, an announcement that was widely praised in the sector.

The revised edition, which the Treasury says is more than 40% shorter than its predecessor, places less emphasis on single headline metrics such as benefit‑cost ratios (BCRs) and urges decision‑makers to take a broader view of impacts across places and communities.

Under the new approach, the Treasury says ministers should no longer treat metrics like BCRs as a crude pass/fail test or use them to compare projects across very different areas – for example, between urban, rural and coastal communities. Instead, officials should weigh a wider range of economic, social and distributional effects when appraising proposals. The guidance is mandatory for central government bodies and is intended to apply to all capital spending decisions, from transport upgrades and housing to town centre regeneration.

The move is being framed by ministers as part of a wider effort to rebalance investment away from London and the South East and towards areas that have historically attracted less public spending. The Treasury said the revision was developed in consultation with devolved administrations, mayoral combined authorities and local councils.

The publication coincides with a separate announcement by the prime minister of an £800M package allowing 40 areas in England to allocate up to £20M each to neighbourhood projects, intended to support high streets, community spaces and local events.

Independent economists and local politicians have in the past criticised a strict reliance on BCRs, arguing that single ratios can undervalue projects with important local benefits that are hard to quantify, such as wider social or distributional effects. The changes to the Green Book intend to produce more rounded assessments that better reflect local priorities.

The Treasury says the new guidance keeps standards of rigorous analysis and still recognises the importance of metrics and evidence, while making the manual shorter and easier for officials to use. It follows the Green Book Review 2025, which found the previous document was overly long and complex.

The Treasury also reiterated plans to pilot “place‑based” business cases – an approach being trialled initially in Liverpool, Plymouth, Port Talbot and Birmingham – and to publish government business cases to boost transparency. Ministers argue these steps will help ensure investment decisions deliver “more balanced growth” across the UK.

How the new guidance will alter funding outcomes for specific projects and regions will become clearer as departments begin to apply it to upcoming spending decisions and as published business cases are released for public scrutiny.

‘Exactly’ what consultancies and engineers have asked for

Association of Consultancy and Engineering (Ace) director of public affairs Ben Brittain said: “This is exactly the direction of travel Ace has been calling for. If we’re serious about growth, we must be serious about place. A strong, place-based business case isn’t a nice-to-have – it’s mission-critical to unlocking investment, jobs and opportunity in every region.

“By giving all parts of the country a fair hearing, the new Green Book puts common sense back at the heart of decision-making and creates the conditions for locally-led growth that people can actually see and feel.”

Northern Mayors hail ‘massive step towards fairness’

Mayor of the Liverpool City Region, Steve Rotheram, said: “For years, areas like ours have lost out because the system was stacked against us. It meant projects that could genuinely change lives in the North were too often overlooked – marked down by a rulebook that didn’t understand local needs and told communities up here that they were literally worth less.

“I’ve fought hard to change that – and I want to pay tribute to Rachel Reeves for listening, and for taking action. This might sound like a technical change, but we shouldn’t underestimate just how big a difference it could make. This could unlock billions in investment for the North in the years ahead.

“The new Green Book is a massive step towards fairness. It means our ideas and ambitions will finally get a fair assessment and that places like the Liverpool City Region will start to see the investment and opportunity they’ve long been denied.”

Richard Parker, Mayor of the West Midlands, said: “This is a big step in the right direction and I welcome today’s announcement. By simplifying and cutting red tape, it becomes easier to back the projects that actually make a difference to people’s lives.

“For regions like the West Midlands, it means decisions can be based on what works locally – creating jobs, fixing transport, investing in infrastructure and supporting skills. I’m very excited to be working with Government to pilot place-based business cases to quickly progress projects like the East Birmingham Mayoral Development Corporation.

“This will bring power closer to the region and gives local leaders the freedom to invest in regeneration that people can see and feel, rather than relying on narrow calculations that have held back growth for too long.”

Tracy Brabin, Mayor of West Yorkshire, said: “Having a simpler and more accessible Green Book will help to drive investment and open opportunity across the country.

“The changes provide great clarity and certainty, making it easier for places like West Yorkshire to grow and succeed.”

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