Objectively Assessing Public Value in Business Cases

27 Jan 21

Due to the geographic biases inherent in monetised cost benefit analysis, decision makers should pay more attention to non-monetised benefits and hence need to be able to assess these on an objective and consistent basis.


Last year government repeatedly committed to its ‘levelling up’ agenda to address some of the highest levels of geographical inequality in the developed world, including by introducing a £4 billion Levelling Up Fund.

In December 2020, the Green Book was updated in response to this increased focus on distributing growth and prosperity more evenly across the UK. The Green Book is government guidance which should be followed when developing and assessing the ‘business case’ for an investment, ensuring it returns the most bang (or ‘public value’) for taxpayers’ buck.

The updated Green Book aims to address concerns that the previous guidance was biased towards investment in richer areas, undermining the ‘levelling up’ agenda. A prominent example of this was the bias towards projects with a high development value (which is inherently greater in richer areas). Therefore, the updated Green Book places an increased emphasis on un-monetisable benefits in Value for Money assessment. Value for Money assessment combines monetised cost-benefit analysis with non-monetised impact analysis to provide a holistic view on the public value of a proposal.

To support this increased emphasis on un-monetisable benefits, the updated Green Book provides a standardised method for assessing Value for Money which takes into account monetised and non-monetised impacts. It is suggested that two preferred options be costed for – one including the cost of delivering non-monetised benefits and one without. This leaves the decision maker to assess whether the non-monetised benefits are worth the extra cost. Whilst this is a helpful way of framing non-monetised impacts, it does leave substantial room for interpretation and lacks transparency.

One solution would be to provide a framework of social, economic and environmental impact metrics with standardised calculation approaches, using which impacts relevant to the type of investment can be measured. The metrics should be linked to policy objectives – allowing business cases to be judged quantitatively on the extent to which they contribute. To aid ease of standardisation metrics could be based on existing government guidance or widely available online resources.

The Green Book update is an important practical step to addressing geographical inequality. However, more must be done to ensure decision makers have the information needed to allocate funding on an objective and transparent basis – to truly ‘level up’ we must measure up and open up.

Iceni Projects has recently been appointed to the Homes England Strategic Research and Economic Analysis Framework 2020-24. We are delighted to draw on our expertise in business case development, housing and employment market research and economic impact alongside our partners CAG Consultants, Three Dragons and Nicol Economics.