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Response to the UK Government review of discounting in the Green Book

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  • Cerruti, Stefania

Abstract

In 2025, the UK Government published a review of HM Treasury’s ‘Green Book’, the policy appraisal handbook used by UK public organisations in appraising, evaluating and making decisions about spending proposals to ensure value-for-money (HM Treasury, 2025a). That review highlighted several issues that required further investigation and to be addressed in the new version of the Green Book. One of these was the use of the discount rate, which needed to be reconsidered "...to make sure that the government is taking a fair view of the long-term benefits that arise from transformational investments" (ibid.). The Treasury appointed Professors Mark Freeman and Ben Groom to carry out a further review and present recommendations to the Government on the use of discount rates (HM Treasury, 2025b). Part of this review involved surveying the academic community on their views on different aspects of discount rates. CETEx submitted a response on 26 February 2026, which is presented below.

Suggested Citation

  • Cerruti, Stefania, 2026. "Response to the UK Government review of discounting in the Green Book," LSE Research Online Documents on Economics 137852, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:137852
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    File URL: https://researchonline.lse.ac.uk/id/eprint/137852/
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    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • J1 - Labor and Demographic Economics - - Demographic Economics

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