Green Book: Rachel Reeves announces changes to Treasury rules to boost infrastructure projects in the North
Rachel Reeves has announced major changes to Treasury rules around infrastructure project spending, which the Government says will address “historic underinvestment” in the North and other parts of the UK.
The Chancellor confirmed reforms to the Green Book today, which is used by Whitehall to calculate the benefit-cost ratios of big infrastructure schemes.
Northern leaders have long argued these calculations have to be reformed, saying they currently favour investment in wealthier areas, such as London, as they focus on short-term gains.
There have been complaints about the Green Book when mass transit schemes in Leeds have been scrapped, as well as other transport projects across the North.
The Treasury said the new guidance will support “fairer and more balanced decisions on investment in every part of the country”, across urban, rural and coastal communities.
The new Green Book, it said, will make sure that these decisions are no longer based solely on single metrics such as benefit-cost ratios, and that these do not compare investment choices across different regions.
Instead, decisions must take into account the full range of impacts, which the Treasury says will give “a fair hearing to every part of the UK”.
Ms Reeves said: “For too long, people outside of London and the South East will have felt the system is working against them and their community, not for them.
“I know full well that everyone has the potential to contribute to our country’s growth and success regardless of where you live.
“These groundbreaking reforms are part of a new approach from the Treasury that truly makes a long-lasting difference for all areas across the country – ensuring they get the fair hearing they deserve and can have confidence in how government invests into where they live.”
Tracy Brabin, Mayor of West Yorkshire, commented: “Having a simpler and more accessible Green Book will help to drive investment and open opportunity across the country.
“The changes provide great clarity and certainty, making it easier for places like West Yorkshire to grow and succeed.”
The Government is also set to decide on the new through station at Bradford, which was included as part of Northern Powerhouse Rail pending its business case.
Henri Murison, chief executive of the Northern Powerhouse Partnership, commented: “The business community has for many years been concerned that the way government has appraised projects has not properly accounted for the benefits of creating economic opportunity where it is currently limited or prevented by poor transport for example.
“Instead, prioritising activity that is already happening and is constrained somehow - such as by speeding up journeys many people already make.
“These changes, championed by those like Steve Rotherham in the Liverpool City Region, will benefit all the North including here in Yorkshire.
“However, many projects with strong value for money have been turned down in the past, proving the Green Book is only part of the ingredients we need.
“In the end, if the Northern Growth Corridor is to achieve its potential we will need political will and more fiscal devolution as too many of the ambitions of local leaders depend on Westminster remaining focused and stable which has proved to be hard over the last decade in particular.”
Zoë Billingham, director of IPPR North agreed that greater fiscal devolution was required.
“It's positive to see the government acknowledge that the Green Book, and subsequent public investment decisions, has long worked against the North and many parts of the country,” she said.
“We welcome the Chancellor's efforts in shifting Treasury orthodoxy so that projects beyond the South East can get a fair shot.
“This is the third change to the Green Book in as many years, the fact it is taking so long shows the depth of this culture shift in Westminster, vitally needed to correct course on how investment decisions are made.
“Devolving fiscal powers to local leaders is the best way to ensure communities get the resources and investment they need, so that decisions can be made at the source, not in Whitehall.”