
Economic Opportunities
Jan 16 2025
On 3 September 2024, the first in-person Midland’s business case conference was held to discuss the Green Book – a guidance issued by HM Treasury on how to appraise policies, programmes and projects. The event was held at held at The Exchange, in Birmingham, and was a joint venture between the University of Birmingham, Nottingham Trent University and the Midlands Engine Observatory.
A line-up of distinguished speakers brought diverse perspectives to the conference including Joseph Lowe, who served as the long-serving editor of the Green Book from 2006 to August 2024 and Dr. Steve Wallace who provided a real example of utilising Green Book guidance to bring the Sherwood Observatory to life. The conference also featured two insightful panel discussions: one reflecting on the use of the Green Book to secure regional investment, and another focused on how the guidance can be used to create successful bids.
In this latest blog post, we distil the key takeaways from the event and explore how the Green Book also provides direction on the design and use of monitoring and evaluation before, during and after implementation.
The Green Book should be used as a toolkit to strengthen business cases – not as a checklist exercise, or ‘a whole lot of fences to hop over to secure funding’ – Rebecca Riley.
All dimensions of the five-case model should be deployed effectively – this means not focusing all resources on the strategic and economic case.
There is a need to have a unified approach so each of the ‘cases’ are developed within a skilled team offering a wide range of skills with one overall author, working collaboratively.
This is especially important for when the private and public sector need to work together. Knowledge needs to be shared to ensure Local Authorities are able to develop the skills required in future.
The panels also emphasised that spending sufficient time to get the strategic case right is critical, but not at the expense of the commercial case which ensures these plans are realistically deliverable.
‘The better you can plan, the better you can deliver’ – Matthew Lambert, Principal Consultant, Mott MacDonald
‘You must bring in stakeholders to avoid disaster’ – Joseph Lowe, former Editor of the Green Book (2006 to August 2024)
Rebecca Riley, Co-Director of City-REDI with Joseph Lowe, former Editor of the Green Book (2006 to August 2024)
When producing a business case its always best to have a few good projects, rather than many which are delivered for the sake of delivery.
This means investing more up-front in a project’s early development cycle to get it on the right footing. This is where a key lesson was emphasised – it is more beneficial to design a project considering all available options and costs, as opposed to a bad project which doesn’t benefit anyone.
‘Take the business case design as seriously as the evaluation’ – Luke Delahunty, Director, SQW
One of the biggest myths about Green Book compliant cases was the Benefit-Cost Ratio (BCR), a metric used to determine the viability of a project based on cost and its likely returns. The problem which surrounds the BCR is not that it is irrelevant, but the opposite – the BCR is used too frequently or treated as the only or pre-eminent metric.
So, how the Green Book is applied is key.
The use of competitive funding has too often turned into competitions based on relative BCRs – incentivising optimism bias in the preparation of funding bids.
Sometimes it is not possible to monetise all outcomes, but this also means not shying away from attempting to quantify other evidence.
Whilst not all benefits can be quantified, this does not mean that they shouldn’t be considered.
For example, when looking at skills, innovation, Co2 emissions or even reducing crime, it may be necessary to provide other types of analysis such as break-even analysis. In other cases, a negative BCR might also be an equally important indicator to invest in a project.
‘Perceived problems with the Green Book approach are often less a function of the guidance itself than of the context in which it is used. E.g. competitions for ‘challenge funds’ which can incentivise optimism bias and encourage an over-emphasis on the BCR.’ – Professor William Rossiter
As part of the wider discussion, Dr. Steve Wallace was invited to discuss his experience producing a Green Book compliant business case which was successful in bringing the Sherwood Observatory Science Discovery Centre and Planetarium, to life. The Observatory, situated in Sutton-in-Ashfield in Nottinghamshire, is scheduled to open in late 2024.
Credit: Sherwood Observatory
Building on the success of the conference, stakeholders were keen to develop a ‘Community of Practice’. This community will help navigate the complexities of Green Book compliant business cases by offering training, sharing expertise and best practice, informing users of future events, and linking to the national Green Book user group.
Economic Opportunities
Jan 16 2025
Green Growth
Feb 3 2025
Energy security has never been more urgent. In recent years, the UK has seen escalating challenges, from global geopolitical crises to rising energy prices. It is the Midlands, home to innovative industries and a strong manufacturing base, that is playing a major role in tackling these issues with the recent launch of the Midlands Engine Energy Security White Paper.
Read moreEconomic Opportunities
Feb 4 2025
Since December last year and throughout January, the Midlands Engine Partnership has led a series of Cluster deep dives - exploring the investment potential of some of the biggest clusters in our region - from aerospace to health technology.
Read more