HM Treasury has published a new edition of the Green Book, the guidance that sits behind appraisal and business cases across government. It isn’t a complete re-write – something that I’m sure will be a relief for SROs and Portfolio Office Directors. In fact, the new version is shorter – trimmed from a portly 118 pages in 2023, to a svelte 88 pages today.
The ROAMEF Cycle remains. Discounting remains. Guidance on avoiding Optimism bias (first introduced in 2023) remains.
But what’s been removed, is clear from the title. The previous version of The Green Book was subtitled “Appraisal and Evaluation in Central Government“, whereas the 2026 version is simply “UK Government Guidance on Appraisal“. Evaluation has effectively been removed entirely, leaving Evaluation guidance to The Magenta Book. This separation makes things clearer for practitioners. Green for Appraisal, Magenta for Evaluation, and The Teal Book for Project Delivery.
The Treasury ‘colour books’ ecosystem
Over time, HM Treasury has developed a set of guidance documents commonly referred to as the ‘colour books’. Each focuses on a different discipline that underpins successful public investment – from appraisal the project delivery to investment evaluation. Taken together, they form a (mostly) coherent framework for the projects investment lifecycle. The table below summarises the core question that each of the colour guides is intended to answer.
|
Guidance
|
Core Question
|
|---|---|
|
Green Book |
Should we do this? Which option is best? |
|
Teal Book |
How do we deliver it? |
|
Orange Book |
What risks could affect success and how should they be managed? |
|
Magenta Book |
Did it achieve the intended outcomes? |
|
Aqua Book |
Are the analytical models and evidence robust? |
What is the Green Book and what changed in 2026?
The Green Book is HM Treasury’s guidance on appraisal for any proposals that use public money. These include projects, programmes and portfolios. The guidance is mandatory for UK government departments and arm’s length bodies. It is also adopted by the devolved governments, and often used by local authorities. The guidance is also useful for private sector organisations as a basis for their own approaches to project and programme appraisal.
The government undertook a review of the Green Book in 2025, and published a new edition on the 5th February 2026 which is 40% shorter than the previous version.
The biggest change is that the Green Book now presents itself much more clearly as guidance on appraisal only. While the 2023 edition took the view that appraisal and evaluation were essentially the same processes at different points in the lifecycle, the new version sees them as distinct, and refers to the Magenta Book for Evaluation.
- 2023: “Evaluation is similar in technique to appraisal, although it uses historic rather than forecast data” (2.12)
- 2026: “Appraisal is distinct from Evaluation” (1.10)
A lot of work has gone into aligning this version with other government guidance. For example, we now see the Five Cases model explicitly mandated.
What’s actually new in practice?
One of the most useful changes for PMOs is the stronger emphasis on front-end clarity. The Green Book now makes the strategic case feel more explicit and practical: case for change, theory of change, SMART objectives, BAU and strategic fit are all right up front. In other words, before teams jump into the numbers, they are expected to be clear about the outcome they are trying to create, and how intervention is supposed to get there.
It matters because while many problems are surfaced in projects delivery, the root causes can often be tracked back to fuzzy intent, over-optimistic assumptions, unclear success measures, or poorly defined options. The Green Book now leans harder into that discipline.
It also challenges the assumption that a single project can deliver transformational change. Anyone who has witnessed a single CRM or ERP implementation project that promised “Business Transformation” will appreciate the stance taken here. Paragraph 4.29 notes that Transformational change requires multiple projects or programmes, with multiple ‘tipping points’.
Value for money is no longer just about BCR
The Green Book still uses social cost-benefit analysis, discounting and summary metrics such as NPSV, Benefit Cost Ratios (BCR) and RPSC. But there is now more emphasis on the need for balanced judgement. The guidance says that value for money depends not only on monetised costs and benefits, but also on unmonetisable impacts, financial affordability, distributional effects, as well as risk and uncertainty.
People responsible for assessing the funnel of ideas coming in for appraisal are told not to use BCR thresholds as a crude pass/fail test, and not to reject proposals simply because they fall below an arbitrary value. This is a useful corrective as it reinforces the idea that the whole case should be considered, not just the financials.
The introduction of place based analysis is topical – assessing how benefits, costs and risks are distributed between places in the UK. This is likely to have a significant impact for proposals outside of London and the South East, with the Mayor of the Liverpool City Region, Steve Rotheram describing the changes as a massive step towards fairness.
For years, areas like ours have lost out because the system was stacked against us. It meant projects that could genuinely change lives in the North were too often overlooked – marked down by a rulebook that didn’t understand local needs and told communities up here that they were literally worth less. The new Green Book is a massive step towards fairness. It means our ideas and ambitions will finally get a fair assessment and that places like the Liverpool City Region will start to see the investment and opportunity they’ve long been denied.
A similar approach should be considered in the private sector too. Large, global organisations with centralised Product Management functions, often find the numbers favour projects and features for the largest markets. But focusing purely on the short-term numbers, can result in stagnation in growth markets when local opportunities rarely make it to the top of the enterprise backlog.
How the Green Book and Teal Book fit together
The 2026 Green Book explicitly links to the Teal Book for the first time. In the Five Case table for example, the management case now points readers to the Teal Book for project delivery, the Orange Book for risk management, and the Magenta Book for monitoring and evaluation. It also says that the preferred option from the Appraisal is then to be taken forward to delivery in line with the principles of the Teal Book.
This is a useful clarification and emphasises the importance of good project governance as much as appraisal assurance. For PMO teams, the logic chain is clearer and more explicit: The Green Book sharpens the case for change and the preferred option; the Teal Book carries that forward through governance, planning, controls, benefits realisation and reporting; the Orange Book strengthens the risk discipline around it, while the Magenta book ensures evaluation is not an afterthought.
How can the Green Book help PMO Professionals?
For PMO professionals in government, the most practical lesson is that appraisal is no longer something to leave to economists and business case writers until the OBC lands for review. The Green Book says it is for everybody involved in spending proposals, including project delivery professionals, and it calls for early collaboration across policy, analytical, commercial, financial and project delivery disciplines.
In practice, this gives PMOs a stronger case to get involved earlier and more meaningfully. Good PMOs can help teams clarify objectives, test whether the theory of change is credible, challenge whether option sets are real rather than performative, and ensure benefits, risks, and governance are designed in from the outset. This is especially relevant when optimism bias is still a hot topic, and when HM Treasury’s own mega-projects work has highlighted unreliable early estimates, blurred accountability, and projects moving forward before scope and benefits are properly defined.
A wider lesson for PMOs beyond Whitehall
Although the Green Book is designed for public investment decisions, many of its principles translate well to organisations outside government. One of its strongest themes is the importance of clarity at the front end of change initiatives. The evidence for why that matters is blunt: every UK mega-project since 1980 has run over budget, and the decisions that shape delivery tend to be made early, as our UK project and PMO statistics show. Before delivery begins, organisations should be clear about the problem they are trying to solve, the outcomes they want to achieve, and the different options available to reach those outcomes. For private-sector PMOs, this reinforces the value of strong portfolio governance and ensuring that initiatives entering the change portfolio are grounded in clearly defined objectives and credible options rather than pre-selected solutions.
The guidance also encourages decision-makers to consider value more broadly and to challenge unrealistic assumptions. The Green Book emphasises comparing multiple options, including the “do nothing” scenario, and being explicit about risks such as optimism bias. These ideas are just as relevant in corporate environments, where projects can sometimes proceed on the basis of overly optimistic forecasts or narrow financial metrics. By encouraging more disciplined option appraisal and a more realistic view of risk, the Green Book provides a useful perspective for PMOs seeking to strengthen the link between strategic intent, investment decisions and successful delivery.
Turning Better Appraisal into Better Delivery
The 2026 Green Book update is not a revolutionary change, but it does sharpen the discipline around public investment decisions. By emphasising clearer strategic intent, stronger option appraisal and tighter alignment with delivery guidance such as the Teal Book, it reinforces an important message for PMO teams: successful delivery starts long before a project begins.
At HotPMO we regularly work with organisations to strengthen the link between strategy, appraisal and delivery – helping PMOs design governance, portfolio processes and assurance approaches that support better investment decisions. If your organisation is looking to strengthen its approach to project appraisal, portfolio governance or benefits realisation, we’d be happy to talk.
