Changes to Treasury ‘green book’ rules will help boost housing delivery in the regions, say sector figures

The Treasury’s new approach to appraising projects will make it easier to deliver housing and transport in the regions and enable better place-making, according to sector experts.

The government yesterday, alongside the spending review, published the findings of its review into the ‘green book’ methodology it uses to assess the cost and benefits of projects.

It outlined a number of significant changes, including the introduction of ‘place-based business cases’ bringing together different projects, such as housing and transport, needed to achieve the objectives of a particular area.

It said: “The strategic importance of a particular project should be justified by its contribution to the objectives set out in the place-based business case, rather than by comparing it to projects elsewhere in the country.”

The review said the Treasury will tackle the current ‘over-emphasis’ on benefit-cost ratios (BCRs) to assess projects by making it clear it does not endorse arbitrary benefit-cost thresholds.

It said: “Treasury does not simply rank different projects, with different objectives, by their BCRs as a means of allocating funding.” The government will also publish business cases for schemes and information about the geographical distribution of projects.

Tracy Harrison, chief executive of the Northern Housing Consortium, said the changes, alongside devolution, “should make a real difference.”

Harrison said: “We’re pleased the government recognises that ‘one size fits all’ solutions don’t work for the north.

“Our research has consistently found that centralised funding models and narrow value-for-money criteria have been a barrier to delivering the solutions Northern communities need.”

Gavin Smart, chief executive of the Chartered Institute of Housing, said: “We welcome the announcement of a review of the green book, which could help unlock investment and support more equitable housing delivery across the country.”

Nick Walkley, principal and UK president at Avison Young and former chief executive of Homes England, said we are now in a devolved era where “investment and growth shifts to regional and not just national accountability”. 

He said: “The most significant indicator of that being what would previously have been national transport infrastructure projects are now in the hands of mayors. Likewise “green book” decisions emphasising “place” seems to be a genuine attempt to embed this shift into Treasury decision making.”

Mark Ewen, managing director of Mott MacDonald’s buildings business, said: “The announcement to refocus the green book appraisal process through a place-based lens will help re-emphasise the importance of locally-driven initiatives and integrated and sustainable solutions, in time delivering transformative placemaking in local communities.”

The Treasury said it will explore how the place-based business cases could be used across different types of local authority.