Everyone wants [the Green Book] to save the world
Bradshaw Advisory’s Senior Consultant Economists, Jay Atwal and Matt Latham on why better guidance won’t fix public investment.
The UK government recently published the 2025 Review of the Green Book - its official guidance on appraising public investment decisions. Dry as it sounds, it’s essential for anyone interested in regional growth, infrastructure, or devolution.
The Review identifies six familiar problems:
Insufficient emphasis on place-based objectives
Weak assessment of transformational impacts
Continued over-reliance on benefit-cost ratios (BCRs)
Overly complex guidance
Limited public-sector capability
Poor transparency of government business cases
While, as we will discuss, many of the proposed changes to the Green Book are welcome, we think that the likelihood of them having any marked change on the quality of decisions made by government, at either local or national level are relatively slim. Or put differently, the odds that they will silence the critics of the Green Book are near-zero.
Critics often treat the Green Book as a rigid formula deciding investment outcomes. It isn’t. The Green Book is simply an analytical framework - ministers and officials ultimately set priorities. Meaningful improvement requires deeper structural change around governance, resourcing, and capability.
“It is ministers and other decision makers who decide what projects and programmes should be approved, not the Green Book.”
A closer look at the government's first concern - the insufficient emphasis given to place-based objectives - clearly illustrates these structural barriers. Here, we’ll set out what government’s concerns are in the area and the steps they’re taking to address them, but crucially highlighting how the success of these interventions is completely dependent on more fundamental changes to the policy landscape.
“Insufficient emphasis given to place-based objectives”
The Review’s most significant critique concerns place-based investment. It identifies two core issues:
Too many local and regional business cases start from a predetermined project, often a “pet” scheme, rather than stepping back and asking: what’s the best investment we could make for this area? This backwards logic stems from how projects are often funded: with tight windows and rigid requirements that reward speed over strategy.
The system is poor at capturing the interactions between projects. Say you’re building housing and improving transport links in the same area – their benefits multiply when taken together. But the current process tends to assess each in isolation, which misses the value of coordinated investment in particular localities.
To address this, the government proposes a new approach: the Place-based Business Case. Rather than another isolated appraisal, this creates a layer sitting above individual project business cases.
In response to the first issue, the business case should begin by defining a clear local vision, linking with local strategies like Local Growth Plans, into which individual proposals like transport hubs or housing developments must fit. In response to the second issue, it captures how multiple projects interact, explicitly demonstrating combined impacts within the economic case that standalone appraisals typically overlook.
These new business cases still follow the standard Five Case Model, but at the level of the overall strategy rather than individual schemes. Government departments alongside devolved areas will need to work together more closely to identify the right combination of long-term interventions needed to unlock growth.
While these proposals certainly move methodologies in the right direction, they don’t address many of the fundamental reasons as to why many business case processes tend to fall short. These problems are far bigger than the guidance included in the Green Book.
Why this might not work
There’s a good reason local areas haven’t always started with a clean-sheet strategic view: they often don’t have the time, people, or tools to do so. Local authorities, combined authorities and other sub-national bodies have been chronically under-resourced for years. When the central government has historically rolled out funding competitions on short notice, it’s no surprise that areas choose projects half developed, rather than developing business cases from scratch where project concept, feasibility and design has not been worked through.
The Review does acknowledge this resourcing issue. But if we now ask overstretched teams to develop more complex, integrated business cases, without fixing the underlying capacity problem, we risk making things worse.
There was acknowledgement in the Review that more needs to be done to make business cases less complex and proportionate to the level of cost. This ‘one fits all approach’ is outdated and needs to be incorporated within future decision making.
What needs to happen?
1. Shifting from centralised funding to devolved, flexible pots (this one’s already in the bag!)
Whitehall is moving away from short-term competitive bidding toward multi-year integrated settlements. Greater Manchester and West Midlands pilot these from 2025–26, with North East, South Yorkshire, West Yorkshire and Liverpool City Region following in 2026–27. This shift is promising, but genuine local capacity-building must accompany greater funding flexibility.
2. Building local capacity and expertise
The Review rightly highlights gaps in local public-sector capability. Promising initiatives include scaling up the offer of early-stage project support, provided by the National Wealth Fund, reforming the Better Business Cases training programme, and increasing secondments between central and local governments.
But we also need to go further. Many combined authorities and local economic teams are still under-resourced. Small teams are being asked to deliver economic strategies, secure investment, and manage complex delivery partnerships, often all at once. That’s not sustainable.
To really embed the kind of strategic planning the Green Book Review envisions, we need to see:
More permanent funding for policy and analysis teams within local institutions, not just consultants hired in to respond to short deadlines (we say this as consultants).
An uplift in the technical and analytical capacity to deal with complexity – from economic modelling to stakeholder engagement to appraisal of interlinked projects.
Put simply, we can’t expect better business cases from places unless we resource those places to build and run better systems.
Without these measures, expecting better local strategies is unrealistic.
3. Delivering good strategy in Local Growth Plans
Good Local Growth Plans should define clear, realistic priorities based on local strengths and evidence, providing a framework for future-ready projects.
Too many local strategies exhibit "everythingism" - a sprawling collection of objectives from net-zero leadership and AI clusters, to cultural regeneration and inclusive growth. Such diffuse ambitions dilute focus and complicate prioritisation.
Many strategies chase national buzzwords or fashionable themes poorly suited to local contexts, such as rural areas without research universities aspiring to become biotech superclusters, or former industrial towns aiming unrealistically to become fintech hubs.
This is driven by structural factors:
Governance complexity: Too many stakeholders and overlapping responsibilities make prioritisation difficult.
Capacity shortages: Producing robust strategies takes analytical skill, local knowledge, and evidence, which many areas lack.
Improving local investment decisions requires more than better guidance; it demands creating the space, incentives, and capability necessary for genuinely strategic thinking.
Real investment reform starts outside the Green Book
The idea of creating more joined-up, place-sensitive business cases is clearly a step forward. But as the above makes clear, the new guidance alone won’t fundamentally shift the quality of local investment decisions.
The core reason is simple: that’s not what the Green Book is for. It’s a tool, not a solution.
Many of the issues identified in the Review, from weak local capacity to poor strategic alignment, are rooted in deeper structural questions about how government works, how it’s resourced, and how it allocates power between the centre and the regions.
Blaming the Green Book for decades of underinvestment or unrealistic local strategies is not addressing the fundamental issue and expecting a revised version to solve those problems is setting it up to fail.
What the Review does do is open up a space for more honest conversations about what good public investment actually requires, not just in analytical frameworks, but in institutional design, political will, and long-term funding commitment.
If those conversations continue, and if they translate into real action on capacity, funding, and governance, then we might just see the changes that the Green Book has long been wrongly expected to deliver on its own.