UK to assess local project bundles in public investment rules overhaul
Britain is changing how it evaluates public spending proposals as it seeks to improve investment decisions in areas that have long been overlooked. The planned overhaul lets local authorities combine housing and transport schemes into a single regional case, with the revised rules due in finance minister John Healey's Oct. 28 budget.
Highlights
- UK government will update the Green Book to allow local authorities to bundle public projects, streamlining regional investment approval processes.
- The Green Book's discount rate will be cut from 3.5% to 3%, improving the likelihood of long-term infrastructure projects outside London passing Treasury tests.
- The upcoming budget will introduce a roadmap for fiscal devolution, granting regional leaders partial control over national tax revenues to support local development.
Planned Green Book changes for regional investment
As reported by Reuters, the government says updates to the Green Book, the framework used to judge public spending projects, will allow public investment schemes in the same area to be assessed together rather than one by one.The change means local and regional authorities can bundle projects such as housing and transport into a single place-based submission. Prime Minister Andy Burnham says the existing rules have failed communities for years by not properly assessing what is needed to unlock their potential.
The reforms also build on Healey's earlier decision to cut the Green Book's headline discount rate to 3% from 3.5%. That adjustment makes long-term infrastructure projects outside London and other more productive regions more likely to meet Treasury appraisal tests.
Devolution plans and wider regional impact
Healey's budget is also set to include a roadmap for fiscal devolution, laying out plans to give regional leaders control over a share of some national taxes.Taken together, the changes are aimed at shifting how Britain evaluates regional development, with a greater focus on combined local benefits rather than isolated project returns. That could improve the prospects for infrastructure and housing investment in parts of the country that have struggled to secure backing under previous appraisal rules.
In our earlier report on Chancellor John Healey’s deficit-reduction stance ahead of the October 28 Budget, we outlined his commitment to sticking with an IMF-backed plan to keep tightening the public finances while still trying to support growth. We also noted the latest GDP reading showing modest resilience and the rising political pressure around how the Budget should balance fiscal discipline with measures to strengthen the economy.
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