As Andy Burnham prepared to take over as prime minister and direct more spending to the north of England, the present government has remembered that it too has a plan to bolster investment in the regions.
Chancellor Rachel Reeves wrote to mayors like Kim McGuinness in the North East and Lord Ben Houchen in Tees Valley on 30 June to update them on “new action” being taken to ensure projects in all parts of the country get the backing they deserve and strengthen confidence in how government invests in their areas.
“Communities that have been under-invested in and overlooked for decades”, said the Treasury, “are now getting a fair hearing as the chancellor pushes forward with her overhaul of how investment decisions are made by government.”
The Green Book
The Green Book – the government’s guidance on value for money of investments – was reviewed a year ago and updated in February to ensure decisions were no longer based solely on single metrics such as benefit-cost ratios but took into account the full range of economic and social impacts that mattered for growth, said the Treasury. That could include how favourable the business environment was or where there were higher levels of innovation.
Findings of an independent review into the discount rate had also been published, ensuring the government was taking a fair view of long-term investment decisions. Business case guidance had been streamlined and cut by more than half, cutting through government ‘sludge’ and reducing unnecessary red tape.
The government was working in lockstep with regional leaders in various regions – though not yet the North East – to progress place-based business cases, putting local priorities and local expertise at the centre of appraisal.
For the first time, added the Treasury, business cases for major projects and programmes were being published consistently, strengthening transparency so the public could see how decisions were made and ensure they had confidence that every pound was delivering maximum value.
These reforms would shape decisions on the likes of Northern Powerhouse Rail, ensuring wider considerations like the impact on local growth, jobs and prosperity were taken into account. They would support mayors with investing £900mn of local growth funding more effectively over the next four years.
In her letter, Rachel Reeves, told mayors: “This work sits at the heart of the government’s commitment to drive growth and increase living standards in every region. I am grateful for the continued partnership between central government and mayors in shaping and delivering this crucial agenda.
“While there is more to do to fully embed these changes, we are on the path to building a system that supports better decisions, strengthens confidence in how investment is allocated, and helps deliver the long-term growth that communities across the UK both need and deserve.”
Comment – what about dualling the A1?
It can hardly be a coincidence that the chancellor’s announcement on the Green Book has come just as Andy Burnham is raising hopes of increased investment in the north and other regions. Reeves seems to be looking to her legacy, just as Keir Starmer appears to be doing for his own reputation by announcing extra defence spending on the same day. Both prime minister and chancellor have been prompted by the Burnham factor – not to change direction but to shake off their inertia and do what they should have done months ago.
Meanwhile, in the North East the genuineness of Reeves’ promises in relation to the Green Book will be judged on one decision above all others – whether the long-awaited dualling of the A1 in Northumberland actually gets the funding to go ahead after years of frustrating delays as NEB readers were reminded by Nick Kemp yesterday (30 June).
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