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The new Treasury Green Book which is used for investment appraisal of all capital projects is to be rolled out this week. How will this affect the case for projects in our area?

Rishi Sunak to reform anti-Northern spending bias (from the BBC) (https://www.bbc.co.uk/news/business-55022162)

Extracts below

Your quotes include


The article also includes a further admission of bias across other regions - not just the north


The statements are also reported to suggest that it's all regions and not just "The North" that will be levelled.


BUT ... having written that (above), I note that all the people making the noise in the article and being reported on are from The North ... it may be that the South West benefits too, but no strong shout of welcome reported from (for example) our MPs in Somerset, Devon, Wiltshire or Dorset.

Worth noting that the Minister of State for Regional Growth and Local Government is Luke Hall - the MP for Thornbury and Yate. So we might be forgiven for hoping that the South-West will not be forgotten. Also I have recently picked up some interesting vibrations about local government. Many people will be aware of recent ructions between Bristol, WECA and North Somerset, but there is also something called FOLGIS (Future of Local Government In Somerset), and co-operation between Gloucestershire and WECA over MetroWest...

Watch this space?

Can anyone explain - in nice simple terms we can all understand - how a higher capital cost makes the return higher, and makes it even more higher than the cost it's going to be divided by to give a BCR?

Presumably if an investment is predicted to stimulate a local economy by 15% (say) then the assessed benefit is significantly greater for a region with a higher income (and therefore asset base).
 
London has a GDP/head of c?54.7k whereas the North West figure is c?28.5. The UK mean is c?32.0k. Also growth rates are relevant with London's etc being usually higher than the sticks.

If I were in the Treasury I would insist on the National figure always being used; this would probably make most schemes unviable, saving a mint and guaranteeing my knighthood!

OTC

PS pound sign?

Not to be confused with the NHS Green Book https://www.gov.uk/government/collections/immunisation-against-infectious-disease-the-green-book (https://www.gov.uk/government/collections/immunisation-against-infectious-disease-the-green-book)

Which might be of interest for completely different reasons at this time. As it was last updated 2 September 2014 there is likely to be nothing immediately exciting about our current concerns.

Most of the individual sections of the "book", including those on each disease, have been revised more recently. But the new section on "SARS-Cov-2" doesn't seem to be ready yet.

The Green Book has been revised every few years, and for much the same reasons as this time. Each time the main response has been that the changes are in the right direction but don't go far enough. I suspect the same will be said this time.

The review (done by the Treasury, of course) found out that the problem was not the Green Book itself, or the process it describes, but the users not understanding how to follow them. And their perception that HM Treasury only look at BCRs - though apparently the Treasury are going to change their ways anyway.

Their main point is that the process is meant to assess plans against policy objectives, and the economic justification is secondary. The trouble is that it's the easier bit to do, at least of you've got a good supply of numbers, whereas the broader assessment is hard - it's not easy even to understand the concepts.

I think that the geographical biases that have been seen result mostly from how the process reacts so much to the existing imbalances of wealth and income that it gives a much higher value to "benefits" in those favoured regions. And that may be inherent in the way they use market values to price costs and benefits. The revision (which is hard to judge from the document) doesn't alter that, but tries to offset its effects by giving the policy layer of assessment priority over the economic.

Here's just one short section from the review repor (https://www.gov.uk/government/publications/final-report-of-the-2020-green-book-review)t:

I thought the reason for using the economic method and CBA was that it's objective, in the sense that the opinions of the civil servants don't come into it. In theory you just get the data and turn the handle, and any criticism from colleagues will be about how well you did that. Assessing means to reach policy objectives can't really be done that way. Past governments have valued this kind of neutral civil service, but the style of the current administration is more in line with a politicised senior civil service, and preferring  "just do it" to objective justifications. That extra push at the top may make any change to the process more effective - but they may also just take less notice of the assessments in their decisions.

Update to JCVI guidance on COVID vaccination
https://www.gov.uk/government/publications/priority-groups-for-coronavirus-covid-19-vaccination-advice-from-the-jcvi-2-december-2020?utm_source=3e779161-e173-4dda-ad9b-07a6d7d95e5e&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate (https://www.gov.uk/government/publications/priority-groups-for-coronavirus-covid-19-vaccination-advice-from-the-jcvi-2-december-2020?utm_source=3e779161-e173-4dda-ad9b-07a6d7d95e5e&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate)