Despite recent revisions, significant gaps remain in the UK Government’s guidance for ex-post approaches to evaluate investment value-for-money. Stefania Cerruti and Neïla Khelifi highlight that the shortcomings of the current guidance can hinder effective measurement and evaluation of social and environmental impacts and suggest how the UK could make improvements while also showing international leadership on this issue.
Earlier this year the UK Government undertook revisions of its two handbooks for policy appraisal and evaluation, the Green Book and the Magenta Book. The Green Book focuses on how to conceptualise and appraise the costs and benefits of an investment before it is put in place, i.e. ex-ante, and the Magenta Book focuses on the monitoring and evaluation of an investment’s effectiveness after being enacted, i.e. ex-post. The Green Book’s guidance is more practical in nature whereas the Magenta Book focuses predominantly on the theory of how to perform ex-post assessments.
The recent Magenta Book update includes additional content focusing on value-for-money analysis. While this is a helpful expansion, we still see an important gap in the guidance, as policymakers and practitioners are provided with little practical instruction or mandate to estimate different types of costs and benefits. Without comprehensive practical guidance there is a risk that evaluations may not be comparable with each other, may adopt suboptimal approaches that do not fully capture social value in its entirety or may not sufficiently capture lessons to inform future policy design. In particular, it is likely that social impacts derived from transformational projects, such as environmental policy, where costs and benefits can be difficult to estimate, will be especially affected.
A lack of ex-post evaluation guidance is not an issue confined to the UK: it affects many countries around the world, and in fact the UK has historically been a front-runner in project appraisal. The UK Government now has a unique opportunity to remedy this, building on existing progress and leading the way internationally to fill this significant gap in how the policy decision-making process is guided.
Value-for-money analysis – and the Magenta Book’s ex-post gap
Analysing an investment’s value for money, defined broadly as the extent to which a proposal optimises social value within a constrained budget, is a key practice for governments both before an investment is undertaken and after it has concluded. Prior to intervening, practitioners and policymakers would carry out an ex-ante estimation of a policy’s costs, benefits and risks, making use of figures from related investments and forecasts, to understand whether an investment is worth pursuing. Post intervention, they would verify the extent to which those benefits occurred, and if costs matched what had been forecast, employing monitoring and evaluation data. This is crucial to understand if the investment was valuable and if it is worth investing in a similar policy in the future. Although related, the way costs and benefits are estimated ex-ante is different from how this is done ex-post and therefore specific guidance is required to cover the two parts of the cycle.
In the UK, while the Green Book is more prescriptive in providing practical guidance on ex-ante appraisal, the Magenta Book takes a more theoretical approach. This allows users to employ their discretion when choosing ex-post approaches, depending on the policy area, the specific characteristics of the investment, or data availability, but it also means more limited practical guidance for practitioners. The Magenta Book refers the reader back to the Green Book for further guidance on the evaluation of specific costs and benefits. However, the Green Book’s focus is on ex-ante appraisal only, even more so now than before. This is highlighted by the recent removal of ‘Evaluation’ from the Green Book’s secondary title to read ‘UK Government Guidance on Appraisal’ in the 2026 update.
Measuring social and environmental impacts
Value-for-money analysis should attempt to capture the social value of an intervention in its totality. This comprises all kinds of benefits, costs and risks that will affect the wellbeing of a population. Certain types of social impacts are particularly difficult to assess, such as those arising from transformational projects, often due to difficulties in attribution and the long time horizons over which impacts manifest. For instance, ex-post evaluations may be carried out shortly after an investment has concluded, which would be too early for transformational projects to have returned social or environmental impacts; the latter are particularly difficult to attribute to individual investments and tend to realise in the very long term.
A lack of clear and comprehensive guidance and explicit commitment to evaluate social and environmental impacts ex-post might lead to these sorts of impacts being omitted or misrepresented. Ultimately, this may affect a government’s ability to carry out informed policymaking: if a government compares ex-post evaluations of two projects, one with more easily monetisable impacts and one with more complex social or environmental impacts, the latter might show lower returns to society which could lead to lower funding for that area of policy in the future.
How do other countries approach this issue?
Despite the gaps in its guidance, the UK remains consistently ahead of most other countries and the EU in the OECD’s Indicators of Regulatory Policy and Governance. In particular, evaluation systems in other countries often lack an equivalent unified framework, and guidance for ex-post evaluation is fragmented across multiple documents, though there are some positive elements the UK can draw on.
For example, the EU Better Regulation Guidelines are more concerned with ex-ante evaluation than ex-post – although the Better Regulation Toolbox offers the flexibility to select the more relevant ‘tools’ for evaluation, with some individual tools applying to both ex-ante and ex-post evaluation, notably tool no. 36 which revolves around environmental impacts.
France’s Guide for Socioeconomic Evaluation of Public Investments lacks specific guidance on social impact evaluation, and topic-specific standalone guides focus on ex-ante rather than ex-post assessment. Similarly, New Zealand’s CBAx tool, which provides agencies with a database of values to monetise impacts, including social and environmental impacts, while innovative, is primarily geared towards ex-ante analysis and lacks ex-post guidance. Finally, Australia’s Commonwealth Evaluation Policy and toolkit and its annex guidance focus more on ex-ante cost–benefit analysis, although more practical guidance is available at the state level (e.g. New South Wales’s ex-post cost–benefit analysis).
How could the UK Government move this forward?
Given the tight fiscal environment most governments are currently operating in, understanding value for money is more important than ever, and this is only possible through robust ex-ante and ex-post assessments. None of the countries named above have fully solved the imbalance between ex-ante and ex-post evaluation guidance, despite some useful elements to their approaches. This confirms the opportunity for the UK to lead the way in filling this gap.
We recommend the following actions for the Government:
- Add specific guidance to the Magenta Book on how to implement ex-post evaluations and put the theoretical approaches it describes into practice. Further explanation of how to map ex-ante appraisal to ex-post approaches and how to re-run ex-ante appraisals with ex-post data would be particularly useful and could be provided as supplementary guidance.
- Develop a set of indicators for ex-post evaluation that specifically consider environmental and nature impacts, to be applied in the evaluation of transformational projects, identified as yielding benefits specifically in longer time horizons.
- Consider lessons from international examples, including the EU Better Regulation toolkit model, which offers flexibility in selecting tools relevant to a specific evaluation and can be designed for ex-ante, ex-post or both assessment types. The New Zealand CBAx model tool could also provide guidance on how centralising the monetised impact values of social and environmental impacts across various departments and agencies can foster consistency.
The authors thank Daisy Jameson, Sini Matikainen, Dora Vajai, Jack Pepin-Hall and Georgina Kyriacou for their review of this commentary.