Updated: 25.10.2026, 14:09. The government is due to give details in the Budget on 28 October.
By Agnes B.
THE BUSINESS TIME
The government is changing the rules by which it assesses public investment – roads, transport, housing or training. On 22 October Prime Minister Andy Burnham and Chancellor John Healey announced reform of the so-called Green Book, the Treasury’s official manual for appraising public spending. The package of changes is to be presented in the Budget on 28 October.
The facts – what the government announced
- Investments assessed together, not separately. Today projects such as housing and transport are appraised separately, so the combined benefits for a given place can be overlooked or understated.
- Plans based on the local economy. New guidance is to help councils and regional authorities prepare investment plans based on a detailed picture of the local economy and barriers to growth.
- Overlapping problems – e.g. low employment and a shortage of skilled workers – are to be tackled through joint investment.
- No10 North (the Prime Minister’s office in the north of England) is to help all regions, including those without mayors, prepare bids on an equal footing.
- A lower discount rate: from 3.5% to 3%. The Chancellor announced the change in September. It means long-term benefits from investment will count for more.
- In the Budget the Chancellor is also to present a plan for fiscal devolution – regions are to decide on part of the revenue from some national taxes.
The changes were announced at a meeting with England’s mayors at No10 North. They were backed by, among others, Claire Ward, Mayor of the East Midlands and chair of the UK mayors’ network, and Eamon O’Brien, chair of the Local Government Association.
What came before
February 2026 – the Treasury publishes supplementary Green Book guidance on discounting.
September 2026 – Chancellor Healey announces a cut in the discount rate from 3.5% to 3% – the first such change in more than 20 years.
22 October – the Prime Minister and Chancellor announce “place-based” investment appraisal.
25 October – TBT reports on the £285m programme for the regions (Good Growth).
28 October – the Budget: the full package of Green Book changes and the fiscal devolution plan.
What has changed
Until now a project had to “stand on its own”. Now what counts is what different investments in one place deliver together. A lower discount rate means that benefits far in the future – e.g. from railways or energy – lose less value in the government’s calculations. In TBT’s assessment this usually helps large, long-term projects and regions outside London.
TBT analysis – conclusions
The Green Book sounds technical, but it decides which roads, railway lines and housing estates get built. Changing the criteria may increase regional projects’ chances of securing funding. If that happens, there will be more work for local construction, transport, installation and service firms.
The effect will not be immediate. First come new plans and bids, then tenders. Real contracts are more of a 2027–2028 prospect than one for the coming months.
Risks
TBT editorial assessment – not the government’s position.
| Risk | Affects | Level |
|---|---|---|
| Delays – the new rules will initially lengthen the preparation of plans and bids | firms waiting for council tenders | MEDIUM |
| Changed criteria without extra money in the Budget | regions, the construction sector | MEDIUM |
| Uneven readiness of councils – smaller ones may struggle more with the new bids | smaller towns and areas without a mayor | LOW |
Who it affects
- Construction, renovation, installation and transport firms working on public projects or as subcontractors.
- Training firms and employment agencies – the government explicitly links investment to skills shortages and low employment.
- Residents of regions outside London – that is where more investment is meant to go.
What it means for you
A Polish business in the UK: if you work for councils or large contractors, more work may appear in your region in the coming years – especially where investment in transport, housing and skills is planned together.
Workers: more investment in the regions potentially means more work in construction, transport and services, but not straight away.
How to prepare
- Register your business on the free public procurement service Find a Tender and set up alerts for your sector and region.
- Check the investment plans of your council or regional authority (combined authority).
- Prepare the basic documents required in tenders: insurance, health and safety policies, references.
What to watch next
- The Budget on 28 October – the full package of Green Book changes and the fiscal devolution plan.
- New Treasury guidance for councils.
- The Prime Minister’s meeting with the heads of the Scottish, Welsh and Northern Ireland governments at the next National Economic Council.
Read also: The Budget on 28 October: what we know and how to prepare · £285m for England’s regions · Burnham spoke to Tusk · All Prime Minister’s Office statements
Sources
- Prime Minister’s Office, 10 Downing Street and HM Treasury, GOV.UK – PM puts communities first in government investment rules shake up (22.10.2026) – primary source
- HM Treasury – Green Book, supplementary guidance: discounting (02.2026) – primary source
- Local Transport Today – discount rate cut from 3.5% to 3% (17.09.2026) – secondary source
GOV.UK statement under the Open Government Licence v3.0. Translation and editing: THE BUSINESS TIME Editorial Team.
We assess factual corrections and substantive responses. Verified changes are reflected in our reporting.
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