Britain Lowers Approval Criteria for Infrastructure Projects to Boost Investment

The UK Treasury announced it will lower the primary discount rate used to assess the long‑term benefits of public infrastructure investment, as part of plans to stimulate investment across the country.

In a statement issued Friday evening, the Treasury explained changes to the Green Book guidance that governs capital project approvals, noting that the discount rate used to evaluate public spending will be reduced to 3 % from 3.5 %.

The discount rate reflects how the Treasury compares costs and benefits that occur at different times, treating £100 today as worth more than a promise to receive £100 in the future.

Lowering the discount rate narrows this gap, making it easier for long‑term projects to demonstrate their full value rather than having it diminished simply because their benefits take years to materialise.

The government will publish the full details of the plan, including its response to the discount‑rate review, in the budget on 28 October (1 October). Treasury Secretary John Hely is expected to deliver his first major speech in the role on Monday, where he will outline the plan.

The Treasury said the changes aim to give transport, housing and social infrastructure projects a "fairer treatment" in government spending decisions by giving greater weight to benefits that take years to realise.