In his first speech as Prime Minister, Boris Johnson promised to ‘level up across Britain’ and ‘answer the plea of the forgotten people and the left-behind towns’. In doing so, he pledged to ‘unleash the productive power’ of every corner of the country and made clear that boosting economic performance would be a priority of his new government.
In order to put this ambition into practice, it will clearly be necessary to reverse the impacts of many decades of underinvestment in ‘left behind’ places. A long standing criticism of the Government’s appraisal system (embodied in the Treasury’s ‘Green Book’ and sector-specific departmental guidance) is that it has tended to favour already successful areas, while places that require government investment to turn around their fortunes have historically found it very difficult to compete for funding.
In acknowledgement of these issues, the Treasury launched a ‘levelling up review’ of the Green Book in early 2020. This coincided with an initial phase of work that Homes for the North commissioned Cebr to undertake to investigate the appraisal challenges facing promoters of housing schemes in ‘left behind’ areas. We produced a set of recommendations for reform that were fed into the Green Book review, a number of which were reflected in a new version of the Green Book that was published in November 2020. A key feature of the revised approach is a strengthened role for the strategic case and less emphasis on the benefit to cost ratio (BCR), which has traditionally played a dominant role. For more information see here.
Homes for the North, together with the Northern Housing Consortium, commissioned a second stage of work from Cebr in late 2020 to provide some more detailed, practical advice about how the levelling up agenda can be ‘operationalised’ in housing scheme appraisal. The work was undertaken in a collaborative way, with support from Homes England and a number of northern local authorities.
Our approach was based on developing a series of logic maps that serve to illuminate the processes by which scheme impacts are brought about and can form a useful framework for assessing the extent of gaps in the evidence base. We used this to assess the quality of the evidence base relating to ‘market failures’, recognising that these often form a disproportionately important part of the case for schemes in regions outside London and the south east. Gaps in the evidence base result in a range of impacts, for example those relate to wider productivity, environmental effects, health and wellbeing and place quality not being fully captured in business cases. This implicitly biases the appraisal system against supporting schemes in less thriving regions, compared to those elsewhere that are able to demonstrate strong ‘land value uplift’. For more information see here.