The Green Book Review 2025: A Big Opportunity?
by Dr. Allan Little, Chief Economist at State of Life
Sir Keir Starmer’s promise, made when he was leader of the opposition, was that “with every pound spent on your behalf, we would expect the Treasury to weigh not just its effect on national income but also its effect on wellbeing.” The Green Book Review brings some welcome changes but misses the chance to put wellbeing on an equal footing with economic measures.
What is the Green Book Review?
The Green Book is the government's guidance on assessing the costs, benefits and risks of different options to achieve government objectives. The Chancellor announced a review of the Green Book in January, with the aim to ensure the government's decision-making processes give "a fair hearing to all parts of the country."
The review published its findings and recommendations last month. These include plans to simplify guidance, improve training, publish business cases for major projects, and caution against over-reliance on benefit-cost ratios. These are all sensible, though very similar recommendations made in the last Green Book Review in 2020 - making good on these promises is the acid test.
Wellbeing - It’s Still There but Overlooked as Perhaps the More Suitable Answer
Both the 2020 and 2025 reviews were motivated by criticisms that the Green Book unfairly favours London and the south-east of England. The review recognises flaws in market-based measures such as land value uplifts and wages, which skew cost-benefit analysis in favour of wealthier areas.
Yet some proposed solutions appear stuck in a GDP paradigm. It comes as no surprise that the word "growth" appears 21 times in the Review. By contrast, "welfare," "wellbeing," and even "health" do not appear once.
This lacks the courage of the Green Book's own conviction that: "Social or public value…includes all significant costs and benefits that affect the welfare and wellbeing of the population, not just market effects."
The review does at least suggest that business cases "should also consider wider benefits and costs." But this vague notion of wider benefits hardly gives the parity of esteem between growth and wellbeing, which the Prime Minister had promised.
Measure What Matters
Rather than patching up the technical methods for income- or property-based values, the review could have focused attention on direct measures of social welfare. These are well established in the Green Book and don't suffer from the same geographic or wealth biases that prompted the review. Two leading measures include:
Quality-Adjusted Life Years (QALYs), capturing health-related quality of life across all age groups.
Wellbeing-Adjusted Life Years (WELLBYs), which assess overall life satisfaction, balancing income with health, relationships, and other factors that determine a good life.
We suspect the government sidestepped its own Wellbeing Guidance for Appraisal, which forms part of the Green Book, because the word 'wellbeing' has become too politically fraught. There are perhaps fears of this being connected to wellness or wokeism. Of course, nothing could be further from the truth - Lord Layard described the guide as “an amazing intellectual achievement”, one that built on the foundations that he and other leading economists laid.
The Missing Generation
A further omission in the review is any mention of children and young people. Most children don't have budgets, earn wages or buy property - they're largely invisible when we measure growth or market effects. In this way, the investment bias against 20% of the population under the age of 16 is more profound than any geographical skew.
Direct welfare measures again offer the best solution. QALYs can be applied across all age groups. Recent work by State of Life and the LSE has established the C-WELLBY – a method to map measures of children's wellbeing onto the WELLBY.
It’s Not Too Late
The solutions to many of the problems flagged by the review are hiding in plain sight, within the Green Book itself. Using measures like the WELLBY naturally corrects for regional biases that prompted the review, as these mainly relate to business cases that focus on market values, rather than how investments improve our lives. The real test will be the overhaul of the Green Book guidance planned for 2026, so it’s not too late. Everyone with a stake in the Green Book can reassert that the welfare and wellbeing of the entire population is the ultimate goal, and push for measures like the QALY and WELLBY to become mainstream across sectors.