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

When deciding whether an infrastructure project is worth doing, is the government asking the right questions?

Is it about how fast it can be built, or for how much? Or should it be about which project will deliver the greatest benefits?

In the UK, the Green Book helps the government make these decisions.

Refreshed in February 2026, the guidance is slimmer, clearer, and more explicit that value for money is about more than cost.

Following the findings of a Treasury-led review, the updated Green Book aims to better support public investment decisions across the country, rather than focusing on already economically successful areas.

The government published the findings in June 2025 alongside the Spending Review.

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 2025 review, which the ICE contributed to, confirmed that there is no conclusive evidence that the methodology is biased towards certain regions.

However, it also said that poor transparency around government business cases makes it difficult to demonstrate this.

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 updated Green Book’s new vision is one that puts place-based growth, transparency, long-term transformation, and fairness at the heart of public investment.

Key takeaways from the updated Green Book

1. Broader consideration of what is value for money

Benefit-cost ratios (BCRs) have become a dominant metric in decision-making. But they often fail to capture difficult-to-measure benefits (such as social impacts, resilience, and biodiversity) and can disadvantage projects in lower-income areas.

The updated Green Book explicitly rejects arbitrary BCR thresholds and clarifies 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. It now gives equal weight to “unmonetisable” benefits for local areas and communities.

While this is positive and ensures decisions will account for wider value, it does risk introducing greater subjectivity and politics in decision-making.

2. More focus on 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?”

Place-based analysis can identify the varying characteristics of different places and understand how they affect the achievement of objectives.

This approach is still in the early stages. In October 2025, the Treasury announced that Liverpool, Plymouth, Port Talbot, and Birmingham would be the first four locations to trial this new approach.

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.

3. Clearer guidance for ‘transformational change’

The Green Book has historically struggled to capture the full value of “transformational change” – the benefits of major investment, such as significant transport schemes or large-scale regeneration projects, that might take decades to fully realise.

The guidance on transformational change now makes a clearer link between national outcomes and local, place-based objectives. It also encourages Green Book users to clearly explain their assumptions with evidence and analysis.

Business cases that knit together aspects such as transport, housing, skills, and net zero will be stronger.

This means earlier collaboration across local government, utilities, and delivery bodies, as well as better alignment with local plans and frameworks.

Evaluating long-term investments

The Treasury has also commissioned an independent review of the discount rate – the interest rate used to convert future costs and benefits into their present-day value.

This rate reflects society's preference to receive benefits sooner and incur costs later, giving less weight to costs and benefits that occur further in the future. It helps decision-makers fairly evaluate long-term investments and consider the future impact of projects.

A final report on the discount rate review is expected in June.

4. Streamlined and simplified overall

The new Green Book is about 40% shorter than before, slimmed down to 88 pages.

The 2025 review found that the document had become too complex, especially for local authorities with limited time and resources.

While there are still thousands of pages in supplementary documents, the Green Book itself should now be easier to navigate and understand.

The Treasury has also published a set of business cases for major projects and programmes to provide transparency and examples of good practice for Green Book users.

5. Local capability needs to be developed

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

The updated Green Book requires that everyone in government engaged in developing, reviewing, or approving spending proposals receives training and accreditation through the Better Business Cases programme. In addition:

• the National Wealth Fund will expand its support for early-stage project development.
• the Treasury will encourage more secondments to share expertise between central and local government.

This 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.

How can the UK turn its infrastructure ambitions into reality? Read the ICE’s five recommendations on addressing barriers to infrastructure delivery.