UK Construction and Law

Green Book reforms at the Budget will let places make one joined-up case for housing, transport and skills investment

By Staff Writer  |  23 October 2026

The Prime Minister has confirmed that Treasury appraisal guidance will be changed at next week's Budget so that projects in one place can be assessed together. Mayors and councils will be able to put forward place-based business cases instead of defending each scheme on its own.

The Green Book is the government's official guidance for appraising business cases for public spending projects across the UK. Under it, a housing scheme and a transport proposal in the same area are generally considered independently of each other. The government says that approach often misses or undervalues what a group of projects could achieve together in one place.

Prime Minister Andy Burnham set out the change on 22 October 2026 at a meeting with English mayors at No10 North, and said the package of Green Book reforms will be delivered at next week's Budget. He said communities had been let down for years by outdated rules that had not looked properly at what was needed to unlock their potential, and that the system was being changed so that local priorities sit at the heart of decision making.

What the guidance will change

The updated guidance is intended to help places, including local and strategic authorities, build investment plans around a more detailed picture of their local economy. Authorities will be expected to identify the barriers to growth in their area and coordinate investment around them. The government gives an example: where low employment and skills shortages are holding a place back, the new approach will consider how different investments could tackle both together, rather than assessing each project separately.

No10 North will help areas prepare the new place-based business cases. That support extends to places that do not have a mayor, so that they can engage with the process on the same footing as mayoral authorities.

People do not see housing, transport, and other infrastructure investments in isolation: they see the benefits to their home, their place, and their economy.

Claire Ward, Mayor of the East Midlands and Chair of the UK Mayors Network

Ms Ward said that having to make the same case for each element of a clearly connected proposal wastes public money. Eamon O'Brien, Chair of the Local Government Association, said councils were well placed to bring together investment in housing, transport, skills and public services, and that local and strategic authorities would need the powers, flexibility and resources to turn the reforms into real improvements.

The discount rate and the Budget

The reforms build on changes announced last month by the Chancellor, John Healey, including a cut in the headline discount rate from 3.5% to 3%. The government says the lower rate places greater value on the long-term benefits of investment and strengthens the case for projects that drive growth, wherever they take place. Mr Healey said that at next week's Budget he will set out plans to move more power and resources out of Westminster. The government says this will include a roadmap for fiscal devolution, giving regional leaders control over how they allocate a share of some national taxes.

A combined business case changes what a scheme has to prove before it is funded.

For contractors, consultants and authority clients, the practical effect will depend on the guidance text the Treasury publishes. Until then, the direction is set: schemes that can show how they work together in one place should score better than those argued in isolation.