Rewriting the rules: what does the Green Book review mean for infrastructure?

In June 2025, alongside the Spending Review, HM Treasury (HMT) published the findings of its Green Book review.

This exercise could reshape how public investment decisions are made and assessed across the UK.

The review was based on the need to offer better support to those making these decisions across the country, rather than focus only on already economically successful areas.

It sets out six actions HMT will take to update the Green Book, with the new version due to be published in early 2026.

Why the Green Book matters

The Green Book is the UK government’s core guidance for appraising policies, programmes, and projects. It helps civil servants and decision-makers evaluate the costs, benefits, and risks of different options.

But critics have argued that the Green Book’s methodology unintentionally favours already-prosperous regions, making it harder for other areas to secure funding for transformative infrastructure.

The review confirms that there is no conclusive evidence that the book’s methodology is biased towards certain regions.

However, it also says that poor transparency around government business cases makes it difficult to demonstrate that benefit-cost ratios (BCRs) are not biased towards London and the south-east of England.

The ICE’s previous work on the Green Book found that it works best when the targets that sit behind national objectives are clear. This enables business cases to be geared towards achieving those outcomes.

The 2025 review sets out a new vision for the Green Book: one that puts place-based growth, transparency, long-term transformation, and fairness at the heart of public investment.

The ICE contributed to the review earlier this year and supports the findings.

Key findings from the Green Book review

1. There is a need for place-based business cases

The review found that traditional business cases often fail to reflect local growth priorities. Instead of asking “what’s the best way to do this project?”, the new approach asks “what’s the right project to unlock growth in this place?”

HMT will introduce place-based business cases that bundle together complementary projects – like housing, transport, and skills – into a single strategic vision for a region. A new taskforce will coordinate this effort across departments and local authorities.

The introduction of place-based business cases is ambitious. Coordinating across multiple departments and local authorities is no easy task and will require strong leadership to be fully realised.

2. Transformational change needs better guidance

The Green Book has historically struggled to capture the full value of what is designated as ‘transformational change’.

The concept refers to major investment that has benefits which might take decades to fully realise, such as significant transport schemes or large-scale regeneration projects.

HMT will improve guidance on how to appraise transformational change.

It will also commission an independent review of the discount rate – the interest rate used to convert future costs and benefits into their present-day value.

This rate, currently set at 3.5% per annum, reflects society's preference for current consumption over future consumption.

The discount rate helps to ensure that long-term investments and their benefits are fairly evaluated and that decisions are made with consideration of the future impact of projects.

The independent review aims to ensure that the rate is fulfilling its role.

3. HM Treasury over-relies on benefit-cost ratios

BCRs have become a dominant metric in decision-making, but they often fail to capture unquantifiable benefits (such as social impacts, resilience, biodiversity etc.) and can disadvantage projects in lower-income areas.

The updated Green Book will explicitly reject arbitrary BCR thresholds and clarify that a BCR below 1.0 (i.e. that £1 of investment delivers less than £1 in economic return) does not automatically mean poor value for money.

While moving away from rigid BCR thresholds is positive and ensures decisions will account for wider value, it does risk introducing greater subjectivity and politicisation in decision-making.

4. The Green Book’s guidance must be simplified

At 148 pages, plus thousands more in supplementary documents, the Green Book has become too complex, especially for local authorities with limited time and resources to go over all of the documentation.

HMT will radically simplify the Green Book and its business case guides by 2026.

It will have clearer rules on the level of detail required depending on project scale, and more practical examples to help those who use it.

5. Local capability needs to be developed

Local and regional governments often lack the in-house expertise to develop robust business cases, relying heavily on consultants.

The government-run Better Business Cases training programme will be reformed, and the National Wealth Fund will expand its support for early-stage project development. More secondments between central and local government will also be encouraged.

This finding aligns with the ICE’s work on the Green Book, which highlighted that it provides the correct tools, but requires better application and capability to be used to its full effect.

6. Greater transparency to share best practice

Few business cases are published in the public domain, making it hard to scrutinise decisions or learn from past projects.

In response, the government has said it will publish business cases for major projects, improving transparency and helping project promoters understand what ‘good’ looks like.

The promise to publish business cases for major projects is a step forward, but it’s unclear how comprehensive or timely their publication will be. There may also be resistance from departments concerned about scrutiny or commercial sensitivity.

Read the ICE’s six takeaways from the UK government’s 2025 Spending Review.