The case for place-based business cases: Findings of the 2025 Green Book Review

Earlier in the year, I wrote about Sweco’s work in Bradford to develop a value-for-money case that wasn’t just reliant on the scheme’s benefit cost ratio (BCR). At the end of the blog, I wrote that a Green Book review was upcoming and how this may differ from the previous 2020 review that was heavily informed by the ‘levelling-up’ agenda.

My initial reaction was that there doesn’t appear to be much that was new over and above the findings of the 2020 review. However, after a more thorough read you begin to appreciate that this feels more like a progress report with reflection and expansion on some of those themes. In a positive move, it also includes actions for each finding. ‘Levelling up’ or ‘level up’ is mentioned just once in the 2025 review, but the underlying sentiment remains as reflected in the opening of the Executive Summary:

“The government was elected on a promise of change, to deliver economic security for working people and renewal for all parts of the country. There are large and persistent economic disparities between the different regions of the United Kingdom, and many places have simply not received the investment they need to grow and flourish. A Britain that is better off cannot mean relying on a handful of places forging ahead of the rest.”

Perhaps not as a snappy a slogan as ‘levelling up’, but the objective remains consistent with the previous refresh and there are further references to pursuing ‘regional equality objectives’ within the report.

I won’t go into detail on all six of the findings but there are a couple of areas I thought worth highlighting that are particularly relevant for schemes being developed by Local Authorities.

Continued over-emphasis on BCRs in decision making

I couldn’t let this one slip through without commenting as it’s been a topic I’ve discussed in previous blogs. Several concerns were identified by stakeholders including:

1. The government still places too much emphasis on what can be included in a BCR.
2. Arbitrary ‘BCR thresholds’, which stipulate that a project can only receive funding if it has a BCR above a certain value, such as 1.0 or 2.0.
3. This creates incentives to focus disproportionate time and resource on capturing monetisable benefits to secure funding for a proposal, at the expense of a more rounded assessment of value for money. The use of BCR thresholds can also disadvantage projects that have substantial benefits that are difficult to quantify.

In response, the review states,

1. “HM Treasury does not endorse the use of arbitrary BCR thresholds as a sole means of determining whether a proposal can receive funding.
2. A proposal may be approved even if it has a BCR of less than one. Decision makers should form a judgement on whether the proposal still constitutes value for money, based on a broader appreciation of the scheme’s unmonetisable costs and benefits, risk and uncertainty, and other significant unquantifiable factors.
3. HM Treasury encourages government departments and public bodies to review their appraisal processes to make sure that they are appropriately adopting these principles
4. The review has not found conclusive evidence that the Green Book appraisal methodology is biased towards certain regions, nor that BCRs are systematically greater for proposals in London and the south-east compared to elsewhere.”

I feel quite fortunate that I’ve worked with funders who have been progressive in the use of BCRs and value for money assessments and have already adopted these principles to varying degrees. This has also given an opportunity to get comfortable with the idea of a value money assessment based on factors beyond the BCR; the importance of appraising non-monetisable benefits, as well as developing a strong economic narrative with clear links to the Strategic Dimension of the business case. It also encourages our team to push the boundaries of appraising non-monetisable benefits using both quantifiable and qualitative methods. For further information on how we did this in Bradford city centre see my previous blog.

Insufficient emphasis on place-based objectives

The previous update to Green Book included an annex on ‘place-based analysis’. This review highlights that there is still insufficient emphasis on place in lots of business cases with two key themes emerging from stakeholders:

1. Regional equality objectives are not always properly reflected in the strategic case for a proposal.
2. It is often hard to express the strategic contribution of an individual project in a single project business case. This is because the Green Book is generally written to support the appraisal of individual projects and programmes. However, the benefits of different projects in a place, such as transport and housing, are often mutually reinforcing and greater than the sum of their parts.

One proposed solution to these issues is the introduction of ‘place-based business cases’. These “will set out the strategy and analysis for a set of proposals in a particular place. They will function like a portfolio business case, sitting above the individual project and programme business cases for specific interventions…These will bring together the different projects that are needed to achieve the objectives of a particular place.”

This is a really interesting development. At Sweco, we are currently developing a couple of area-based transport business cases with strategic objectives to open up housing and employment sites. These look at packages of transport schemes which may be delivered using phasing, but they still promote a single project. Whilst efforts are made to explain the complementary nature of different projects and appraise the benefits such as with dependent development and alternative scenarios with combinations of interventions, it is not always easy to demonstrate that benefits from a combination of projects can be greater than the sum of their parts.

As the review states “multiple complementary interventions are (often) needed at once to truly transform a place and unlock growth”. Having a ‘place-based business case’ that does exactly this and could sit above individual project business cases providing a framework for an area is a positive development. The Geographical coverage of place-based business cases are still to be defined, although I would hope this approach is not too prescriptive, retaining flexibility for regional and locally proportionate implementation.

The review goes on to say:

“Place-based business cases will broadly follow the Five Case Model and the principles set out in the Green Book…Place-based business cases will be based on robust analysis and research. This may include social cost-benefit analysis but may also involve analytical techniques that are not currently set out in the Green Book.”

I think there could be real value in place-based business cases, particularly in regeneration areas or where significant investment is proposed across a number of projects. However, there are also significant challenges, not least the partnership working across government departments and with different tiers of administration (national, regional and local).

I’m cautiously optimistic that this review builds on a number of themes identified in the 2020 review and reaffirms the need to move ‘beyond the BCR’ when assessing scheme value for money. Further actions to reinforce this message in the updated Green Book (to be published ‘at the start of 2026’) are to be encouraged. The trickle down of these changes into departmental guidance e.g. DfT TAG and MHCLG’s Appraisal Guide, as well as regional Assurance Frameworks will likely follow over the next few years.

This creates a a less prescriptive environment for appraisal and the industry and scheme promotors must take advantage of this to deliver a more bespoke approach. The danger with this ‘freedom’ is that we try to do more at greater cost, so it is imperative that new guidance, tools and techniques are deployed proportionally (and the guidance allows this). It is not easy to get this balance right but we must use professional judgment and experience to agree appraisal methodologies that provide robust evidence bases for decision makers, whilst at the same time being proportionate.

Appraisal must be appropriate to the scale, complexity and risks of the scheme proposal. To me, this means developing an skeletal economic narrative that really hones in on the strategic objectives and outcomes of schemes and from this a appraisal methodology made up of monetised and non-monestised benefits. The alternative is falling back on the safest option of a ‘compliant’ assessment which can result in over-specified appraisal. This in turn can create cost and programme issues, an ‘illusion of accuracy or robustness’  and impacts being assessed that are not particularly relevant to the scheme appraisal in hand (using a tool because it exists).

If you’d like to discuss adding more ‘place to the case’, contact me below.