The Green Book 2026 update released at the end of last week presents some significant changes in how the UK government appraises and greenlights capital spending. Green Book is the guidance published by HM Treasury that informs all public sector funding decisions.   For the developer community who are involved in infrastructure, residential development and mixed-use regeneration, there is increased focus on ‘place led’ strategy. The central theme of the 2026 edition is guidance around funding decisions that enable regional equity.

What is the Green Book?

The Green Book is HM Treasury’s guidance on how to appraise and evaluate public spending. It is the framework for how public bodies evaluate the socio-economic impact of public spending in the UK and make the case for funding. As a result, the Green Book directly influences how public resources are allocated, what projects and policies are undertaken, and where infrastructure is located.

The Good:

  • Benefit to cost ratio is no longer the Pass/ Fail test. This allows projects in more deprived regions to stand a chance even if their immediate economic return looks lower than major cities’ equivalent.
  • Simplification: The document is 40% shorter and in easily accessible language.
  • Strategic Over Individual: It moves away from appraising ‘isolated projects’ and toward ‘strategic programmes’.
  • Long-term thinking is emphasised – encourages considering systemic impact, risks, and lasting benefits.
  • Evaluation is integrated from the start – capturing lessons as projects progress creates a cycle of continuous improvement, helping investments achieve more.

The Risk:

Subjectivity: While significance and focus on the Strategic Case is a welcome and much needed change to fully capture the wider contextual benefits of projects and programmes, the factors that impact success of the bids may become more tenuous to understand.

Change Feature Impact on Developers

  • Place-Based Appraisal: Ability to bundle projects (e.g., housing, transport and energy) into a single Place-Based Business Case, making integrated masterplans easier to fund.
  • Transformational Impacts: Recognition of long-term change” means projects that create new markets (rather than just serving existing ones) will receive higher scores.
  • Simplified process for smaller projects: Emphasis on proportionality which would mean more simplified process for smaller projects.
  • Due Diligence: Tighter rules on cost-overruns and risk assessment mean developers must provide more robust data on delivery timelines and cost certainty.
  • Discount Rate Review: A new independent review of the social discount rate is underway, which could make long-term sustainable/green projects more financially attractive.

Why does this matter?

For those who are currently bidding for or planning a project involving public land or funding – there is a need to rethink the pitch. It is not all about the monetisable benefits associated with the project, the strategic link to Local Plans and Social Value interventions becomes increasingly important.

If you’d like to discuss any programmes or projects you’re considering for public sector funding, or want to explore what these Green Book changes could mean for your strategy, feel free to get in touch with our Economics Director; Bindu Pokkyarath.