Reeves to rip up Green Book rules on regional investment

The government is prioritising massive investment in a corridor between Oxford and Cambridge to make the south of England a Silicon Valley-style growth cluster that will add up to £78 billion to the UK economy.

In a speech in Oxfordshire today Chancellor Rachel Reeves is also expected to back the redevelopment of Old Trafford and will review the Green Book – the government’s guidance on appraisal – in order to support decisions on public investment across the country, including outside London and the South East.

The Treasury Green Book methodology on value for money has often been slated by regional leaders because it favours projects with a guaranteed economic return, such as London’s Crossrail.

But today’s speech comes after the Chancellor last week announced a new approach for the National Wealth Fund (NWF) and the Office for Investment (OfI) to work with local leaders to build pipelines of incoming investment and projects linked to regional growth priorities.

This includes the NWF trialling Strategic Partnerships in Greater Manchester, West Yorkshire, West Midlands, and Glasgow City Region and the OfI piloting an approach in the Liverpool City Region and the North East Combined Authority to connect their regions to central government and industry expertise in order to unlock private investment.

Deputy prime minister Angela Rayner met with the regional Mayors in Rotherham last Friday and confirmed that regional growth will also include a review of the Green Book.

Mayor of Greater Manchester, Andy Burnham said after the meeting: “We particularly welcome the opportunity to work with Government to review the Green Book and how it is used to steer public investment, as the current approach is not working for the North of England.”

The review will report back at the conclusion of the Spending Review this summer.

There will also be a new senior taskforce, chaired jointly by Treasury and Department for Local Government senior civil servants, who will work initially with the Greater Manchester Combined Authority to explore further devolution opportunities in skills, transport, and business support.

But all the airport expansion outlined in her speech today is in the south east of England, with Gatwick, Heathrow and Luton all earmarked for major investment.

It appears to be a further attempt to turn the negative tide that has crashed over the government since her budget in October increased National Insurance on all employers.

In the speech today Reeves will say “low growth is not our destiny, but that economic growth will not come without a fight. Without a government that is on the side of working people. Willing to take the right decisions now to change our country’s course for the better.”

Government support for a regeneration project around Old Trafford comes as the debt-soaked fallen giant of English football has seen its stadium in urgent need of repair, but the cost of the project has ticked up towards £3billion, as reported on TheBusinessDesk.com last week.

The chair of the UK Mayors group, Tracy Brabin, who represents West Yorkshire, said: “We know that you can’t get economic growth nationally without doing it in the regions. Mayors stand ready to deliver on the growth mission but we need the right powers and financial freedoms to do that.”

Richard Parker, Mayor of the West Midlands said he was working with government on plans for a gigafactory, and three Investment Zones: “We’re already making progress on creating thousands of new jobs. At the same time I am equipping our people with the skills to succeed in the industries of the future such as advance manufacturing, life sciences and green technology.

Commenting, BVCA Chief Executive Michael Moore said: “The Chancellor has set out welcome steps which indicate the Government’s commitment to growth is underpinned by action.

“The BVCA and Public First’s recent Investment Commission highlighted poor public infrastructure and planning delays as two of the biggest issues impacting investors willingness to choose the UK over competitor nations. We warmly welcome the decisive moves to overcome barriers to investment in the Oxford-Cambridge Growth Corridor. New lab space, a new innovation hub and much needed investment in transport infrastructure will make the region an even more attractive destination for investment.”

Justin Sullivan, President of the Royal Institution of Chartered Surveyors (RICS), said Reeves has a chance to reset the mood but pointed to the damage done to business confidence by the Budget.

“Since the Budget confidence amongst companies in the built environment has tailed off spelling bad news for housing and infrastructure delivery – particularly among SMEs, the backbone of construction supply chains, whose ability to borrow, grow and deliver disproportionately relies on sentiment across the economy,” he said.

These have combined to undermine the positive impact of changes to the National Planning Policy Framework, announced in December. But Rachel Reeves’ speech today will help reset the mood.

“By streamlining decisions on critical infrastructure projects and slashing red tape, policymakers should achieve their ultimate aim of economic growth by capturing the potential of high-growth, knowledge-intensive ecosystems like the Oxford-Cambridge Arc.

“While Reeves is focusing on the biggest, most newsworthy projects – like the East-West Rail link – her department must work with MHCLG and local councils to realise the strategic benefit of improving more local, smaller scale infrastructure projects – like local road networks, water utilities, and public transport links. Part of this focus must be on addressing the skills crisis that affects every corner of the built environment.”