The Green Book has been revised every few years, and for much the same reasons as this time. Each time the main response has been that the changes are in the right direction but don't go far enough. I suspect the same will be said this time.
The review (done by the Treasury, of course) found out that the problem was not the Green Book itself, or the process it describes, but the users not understanding how to follow them. And their perception that HM Treasury only look at
BCRs▸ - though apparently the Treasury are going to change their ways anyway.
Their main point is that the process is meant to assess plans against policy objectives, and the economic justification is secondary. The trouble is that it's the easier bit to do, at least of you've got a good supply of numbers, whereas the broader assessment is hard - it's not easy even to understand the concepts.
I think that the geographical biases that have been seen result mostly from how the process reacts so much to the existing imbalances of wealth and income that it gives a much higher value to "benefits" in those favoured regions. And that may be inherent in the way they use market values to price costs and benefits. The revision (which is hard to judge from the document) doesn't alter that, but tries to offset its effects by giving the policy layer of assessment priority over the economic.
Here's just one short section from
the review report:
2.4 This is a crucial issue. The BCR is a valuable tool for informing the choice of options at short-listing stage and provides a check to see whether the achievement of the objectives of the intervention are worth the total whole life costs to society. But a single and often spuriously accurate BCR, developed without reference to a strategic case, does not give a comprehensive view of the social value offered by an intervention and should never be the sole defining factor in appraising options. In particular, it risks:
? monetisation of spurious benefits that are unlikely to be realised
? ignoring costs or benefits for which there may be good evidence, but which are difficult or impossible to monetise
? giving a misleading impression of the degree of certainty and accuracy in cost and benefit estimates
? not taking proper account of risks; and
? ignoring the question of who the benefits go to and who bears the costs- fundamentally, it removes the decision to invest from its strategic context. In doing so, it reduces decision makers? ability to make informed decisions about which option will best achieve their objectives, ultimately risking undermining their ability to achieve them.
I thought the reason for using the economic method and CBA was that it's objective, in the sense that the opinions of the civil servants don't come into it. In theory you just get the data and turn the handle, and any criticism from colleagues will be about how well you did that. Assessing means to reach policy objectives can't really be done that way. Past governments have valued this kind of neutral civil service, but the style of the current administration is more in line with a politicised senior civil service, and preferring "just do it" to objective justifications. That extra push at the top may make any change to the process more effective - but they may also just take less notice of the assessments in their decisions.
Click on the map to explore geographics
