Treasury launches spending review and Green Book revamp

Policy

The treasury has set out the terms for the comprehensive spending review and also a review of the Green Book that sets the framework for how departments conduct appraisal. Both reviews will report in July.

Details were contained the document published alongside Chancellor Rishi Sunak’s Budget statement last week.

The comprehensive spending review will set Government  departmental resource budgets for the three years 2021/22 to 2023/24 and capital budgets for four years, 2021/22 to 2024/25. 

The Budget set the overall level of public spending within which the spending review will be delivered, although that may be affected by the cost of dealing with the COVID-19 virus. 

The comprehensive spending review will prioritise:

• ‘levelling up’ economic opportunity across all nations and regions by investing in infrastructure, innovation and people, to drive productivity and spread opportunity 
• improving outcomes in public services, including supporting the NHS, taking steps to cut crime, and ensure every young person “receives a superb education” 
• strengthening the UK’s place in the world 
• reducing carbon emissions and improving the natural environment 

The DfT’s capital budget rises from £14.6bn in 2019/20 to £17.6bn in 2020/21. Much of its  expenditure from 2021/22 onwards is set outside the comprehensive spending review process. Funding for Network Rail’s operations and maintenance is set through NR’s five-year regulatory control period. The Government also last week announced that Highways England’s budget for the five-year period 2020/21-2024/25 will be £27.4bn (see pages 12-13). This is funded from the new National Road Fund, using Vehicle Excise Duty revenues in England.   

The Treasury’s Green Book sets the framework for how all spending departments conduct project appraisal. A number of  commentators and groups have called for it to be reviewed, alleging that it favours projects in London and the South East. 

Barry White, chief executive of Transport for the North, said last week: “Recognition that the Treasury Green Book way of making investment decisions does not work is nothing new to the people of the North.”

The Treasury said the review would “make sure that government investment spreads opportunity across the UK”. 

It will assess “how the design and use of project appraisal affects the ability of all areas to achieve their economic potential”. In addition, it will “consider how to assess and present local impacts, and look to develop new analytical methods for transformative or place-based interventions”. 

The Treasury said the Government would engage users, academics and others in the process of reviewing the Green Book. 

Local transport supply chain probed

The Government’s Infrastructure and Projects Authority (IPA) is to lead an investigation into the supply chain’s capacity to deliver local transport infrastructure projects. 

The ‘local transport supply chain study’ will inform the Treasury’s comprehensive spending review, which will report in July.

Says the Treasury’s Budget report published last week: “The comprehensive spending review will set out further plans for investment in local transport spending.

“To inform these plans, the Infrastructure and Projects Authority will lead a study, working with departments, into supply chain capacity, to assess how industry can best deliver the Government’s ambition.”