Exeter economist to co-lead Treasury review of Green Book discount rate

An economist from the University of Exeter has been appointed by the Treasury to co-lead a major independent review into how government assesses the long-term value of public investment.

Professor Ben Groom, Dragon Capital Chair in Biodiversity Economics at the University of Exeter Business School, will spearhead the review of the Green Book discount rate alongside Professor Mark Freeman from the University of York.

The Green Book is the UK government’s central guidance for appraising public policies, projects and programmes, and provides a framework for comparing costs, benefits and risks that arise at different points in time.

At the heart of this framework is the social discount rate, which determines how future impacts are valued relative to those occurring today.

The review will examine whether current guidance takes a fair and robust view of long-term costs and benefits, particularly in the context of transformational investments.

Professor Groom said: “The choice of social discount rate reflects how the government balances the present versus the future in the appraisal of public investment and policy. It is routinely referred to as one of the most critical problems in economics. The review will draw upon the latest research and practice, as well as different perspectives to determine the appropriate balance in the UK context. It is going to be a difficult but exciting exercise and Mark and I are extremely happy to have been appointed.”

The Treasury last undertook a major review of discounting in the 2010s, with conclusions published in 2018, and was followed by a further review focused on environmental impacts in 2021.

In January 2025, the Chancellor Rachel Reeves announced a broader review of the Green Book, citing concerns that it had been ineffective at assessing transformational change and supporting place-based investment across the UK.

As part of the conclusions published alongside the June 2025 Spending Review, the Chancellor committed the Treasury to commissioning an independent review of the discount rate to ensure that long-term benefits from transformational investments are properly reflected.

This commitment attracted significant attention from economists and policymakers, with commentators highlighting the technical complexity and importance of discounting for public investment decisions.

The newly launched review will address eight detailed questions set out in the Terms of Reference, drawing on academic research, practical experience and engagement with an observer group representing public sector organisations across the UK.

Work will begin immediately, with final findings due before the end of June 2026.