Amidst the current COVID-19 pandemic and economic crises a review that will be critical to the recovery within and across the country appears to have started within Whitehall. The Budget statement on 11 March announced a review by HM Treasury of its Green Book; the ‘rule book’ used by central government departments to determine whether public funds should be invested or not in projects to drive economic development.
Yorkshire Universities (YU) welcomes the intention to proceed with the review, even at this challenging time, when many of the ‘standard’ fiscal and economic mechanisms are being redrawn. The review responds positively to calls from those who have long argued that the current application of the Green Book discriminates against those parts of the country that need the most targeted support and investment. Efforts to ‘level up’ the UK will flounder unless the Green Book is amended. Therefore, the new framework should be in place as soon as possible, so as to be ready to support the recovery right from the outset.
YU also supports the call for some form of standardised guidance to help central government and its agencies support, in a more place sensitive manner, the development of new projects that fit within the context of an agreed local strategy, and which are underpinned by robust local evidence and intelligence. The current 5 Stage Business Case model is generally sound, provided it is accepted by appraisers that local decision making is rightly most often iterative and only very rarely is it linear.
We plan to provide more detailed inputs at a later stage, but at present there are a number of important general changes that the government should consider. These include:
- The Green Book should return to its original purpose of appraising new policies and wider programmes of activity, not individual projects. The current narrow econometric focus on factors of production should be widened to incorporate more societal challenges and wider sustainable development goals. But it is problematic to suggest, as one set of guidance does now, that no value is added if new jobs are created or jobs move from one place to another.
- Developing proposals is an art not a science. Basing decisions solely on ordinal mathematical data, especially where weak proxies are inevitably used at lower levels of geography, to compare relative value should helpfully inform decision making. But data should not act as an arbitrary hurdle which must be overcome, especially where the proposal has the clear backing of the democratic electoral process.
- The Green Book should promote heterogeneity, ambition, risk and flair. It should support projects that meet the specific needs and opportunities of particular places. It should not deliver vanilla solutions. Because one type of activity works in once place does not mean it is appropriate for other places. After all, place matters…
- Levelling up inevitably requires some ‘trade offs’ to be considered. The process of appraisal needs to balance competing and differing needs.
- A better balance needs to be struck between providing depth and authority, as opposed to speed and a sharper focus on delivery. No institution with sufficient capacity should be required to commission external consultants simply to satisfy a perceived need for nominal independence or to address issues of capacity within the funding department or agency.
- There should be only one standardised Green Book for use across all departments of government and agencies. Allowing some departments to operate their own version, however well supposedly aligned, can create confusion and unnecessary delay.
There is a wealth of practical experience available within our local universities and other anchor institutions, which can be harnessed to help make a success of the review of the Green Book. We hope the Treasury will consult more widely before any final changes are made to the framework. YU stands ready to facilitate that much-needed dialogue within Yorkshire and the Humber and beyond.