§ The Chief Secretary to the Treasury (Mr. Paul Boateng)I am today publishing a new edition of the Green Book, "Appraisal and Evaluation in Central Government", guidance which the Treasury has for many years provided to other public sector bodies. Copies are being placed in the Vote Office and the Libraries of both Houses.
The new edition incorporates revised guidance to encourage a more thorough, long-term and analytically robust approach to appraisal and evaluation. It has been prepared following extensive consultation, including a public consultation exercise that ended last October.
Among the main changes are the following. First, there is a stronger emphasis on the identification, management and realisation of the benefits of proposals. Secondly, the new edition 'unbundles' the discount rate, introducing a rate of 3.5 per cent. in real terms, based on social time preference, while taking account of the other factors which were in practice often implicitly bundled up in the old 6 per cent. real figure. In particular, the new Green Book includes, for the first time, an explicit adjustment procedure to redress the systematic optimism ("optimism bias") that historically has afflicted the appraisal process. Finally, there is greater emphasis on assessing the differential impacts of proposals on the various groups in our society, where these are likely to be significant.