The Chancellor's Spending Review finally concluded on Wednesday, and we are now beginning to see early signs of how the Government’s flagship ‘levelling up’ policy will be delivered in practice.

Alongside a new £4bn fund (with local areas able to bid for allocations of up to £20m per project) and the establishment of a new UK Infrastructure Bank based in the North of England, one of the more significant developments for those involved in regeneration is the long-awaited publication of revisions to the HM Treasury Green Book.

The Green Book, which sets out official guidance on how projects, programmes and policies should be appraised, has long been a source of controversy, with its historic focus on narrow economic metrics resulting in funding allocations being concentrated in wealthier parts of the country which are able to demonstrate value for money more robustly.  Though some question whether the previous approach was actually as biased as many openly believe, the focus of recent interventions have clearly favoured projects in areas where 'returns' will be highest in the short to medium term.

The revisions make for interesting reading, and there are clear moves on several fronts towards ensuring that funds can be spread across a much wider range of areas than has been the case in recent years.  Some of the key messages are summarised below:

• Strategic alignment is paramount – there is now a much greater emphasis on demonstrating fit with the Government's wider strategic policy objectives, such as levelling up and achieving net zero.  Proposals which fail to demonstrate strong strategic alignment can expect to be rejected, whilst conversely projects with a poor Benefit Cost Ratio (BCR) will not be discounted if they can demonstrate that they are the most cost-effective (and crucially viable) means of achieving a particular policy goal
• A greater role for social and environmental factors – whereas previously most wider impacts were assessed as secondary considerations, the revised Green Book makes clear that all robustly defined social and environmental benefits (and costs) should be included in the main appraisal, and provides new guidance on how some of these wider benefits should be valued
• Appraisals must include Place-Based analysis - this includes demonstrating alignment with local plans and strategies, taking account of the views of local stakeholders, and considering how proposals affect different groups within the local area served by the proposal.  Whilst regeneration projects are inherently place-based, the requirement to include place-based analysis extends to projects with no specific spatial focus, ensuring that the wide range of local implications stemming from national-level interventions are fully understood and evaluated

In addition to the above, new guidance has been provided on the appraisal of projects which are considered to have "transformational" potential – such as major infrastructure schemes in areas which have been historically been deprived of investment.

From a regeneration perspective, the revisions to the Green Book should be broadly welcomed, signalling a move away from narrow economic metrics as the key determinant of where investment is focused, and towards a more comprehensive approach which, it is hoped, will deliver change across a wider range of geographies.

The revisions do not, however, fix the fundamental issue that Green Book-compliant appraisals and accompanying business cases are complex and costly to produce.  This is particularly problematic for the types of smaller-scale interventions that the new £4bn fund will seek to support, where the cost of preparing the business case is high relative to the overall funding ask.

At a time when our town centres in particular need more support than ever, a more streamlined approach to business cases would help local authorities and other bidding organisations to respond more effectively to rapid change, ensuring that key projects are not delayed due to over-complicated governance processes.