With the recent publication of the HM Treasury-commissioned Green Book Discount Rate Review, attention has once again turned to a fundamental question: how should governments assess investments and policies that have the potential to transform society, the economy and public services over the long term? 

Many of today's most important policy challenges involve transformational change. The transition to net zero, technological innovation, demographic shifts and major infrastructure investment all have the potential to reshape society for decades to come. These projects can create long-lasting impacts across generations and often involve outcomes that are difficult to predict or value using conventional appraisal approaches. 

As a result, an important question arises: are traditional tools designed for incremental decisions sufficient when assessing projects intended to drive fundamental change? 

Green Book review and IFoA input 

The Green Book provides the framework through which government appraises major policies, programmes and investment decisions. A key part of that framework is discounting: the process of valuing future costs and benefits in today's terms. 

The IFoA Green Book Task and Finish Group was established in 2025 in response to HM Treasury's Green Book Discount Rate Review and the wider debate about how government should assess transformational change. 

Our work explored whether existing approaches remain fit for purpose when applied to transformational projects and how public sector decision-making might better reflect uncertainty, long-term outcomes, resilience and impacts on future generations. 

As part of that work, we engaged with HM Treasury and other stakeholders. We were also pleased that our report was considered by the review's lead authors, Professors Ben Groom and Mark Freeman, and formed part of the review's evidence base. 

While not all of our recommendations were adopted, it is encouraging to see many of the themes we explored reflected in the final report. 

This blog does not seek to provide a comprehensive response. Rather, it offers some initial reflections on aspects of the review we believe are particularly significant. 

A welcome shift in the debate 

From the outset, our concern was not solely the level of the discount rate. More fundamentally, it was whether government has the right tools for assessing transformational change. 

Against that backdrop, we welcome the review's emphasis on: 

• lower expected long-term growth assumptions 
• greater consideration of downside risks and uncertainty 
• regular review of key assumptions
• recognition that transformational projects may require different treatment from more conventional investments. 

Taken together, these developments represent a positive evolution in how government considers long-term value. 

Moving beyond the discount rate 

One of the most striking features of the review is its conclusion that some of the most significant public decisions, particularly transformational projects, cannot be addressed through changes to the discount rate alone. 

Instead, the review recognises that the appraisal of transformational projects may require a broader framework that draws on a wider range of evidence and judgement than can be captured through a standardised discounting approach. 

This aligns closely with themes highlighted in our original paper, which argued for complementary approaches such as scenario analysis, stress testing and resilience-based assessment when considering transformational change. 

While we welcome this direction of travel, important challenges remain. While there is growing recognition of the need to consider uncertainty, resilience and wider societal impacts, developing practical and consistent methods for incorporating these factors into decision-making remains difficult. 

Further work is therefore needed to develop frameworks that are sufficiently robust to capture these considerations, while remaining practical and proportionate for routine use in public appraisal. 

The significance of social insurance 

Another area of the review that we find particularly interesting is the proposed concept of ‘social insurance’ projects. 

These are projects that provide protection against major shocks and crises. Unlike conventional investments, their value is often greatest when adverse events occur rather than under expected conditions. 

Examples include flood defences, climate adaptation measures, critical infrastructure resilience and public health preparedness. The benefits of such investments may not always be reflected in conventional measures of economic return, but instead arise from reducing losses, maintaining essential services and improving society's ability to cope with disruption. 

The concept aligns closely with actuarial thinking around protection, resilience and preparedness, and raises important questions about how resilience should be recognised and valued within public appraisal. From an actuarial perspective, we believe this is an area that deserves further attention. 

Intergenerational considerations remain important 

Our original paper highlighted concerns around long-term impacts and intergenerational fairness. While the review reaches different conclusions on some discount-rate questions, it shares the view that these issues deserve careful consideration. 

We continue to believe that decision-making frameworks should help policymakers understand: 

• how risks and benefits are distributed over time 
• which generations bear costs and risks 
• who benefits from long-term outcomes 
• the consequences of delaying action where future costs may increase. 

The review proposes alternative approaches to considering impacts across generations, moving the focus beyond the choice of discount rate alone. 

However, important questions remain around how intergenerational impacts should be assessed and weighed in decision-making, particularly where costs and benefits fall on different generations. Ensuring that these impacts are properly understood should remain an important part of public decision-making. 

Looking ahead 

Our initial assessment is that the review represents an important and constructive step forward. 

While it does not adopt all of the recommendations made in our paper, many of the underlying themes are reflected in its analysis. We also look forward to HM Treasury's response to the review and to understanding its next steps for project discounting and the appraisal of transformational projects. 

Over the coming months, the task and finish group will continue to consider how actuarial expertise in risk, uncertainty and resilience can contribute to the ongoing development of public appraisal and decision-making frameworks. 

Ultimately, the challenge is not to predict the future perfectly, but to make decisions that remain robust and adaptable over time. As policymakers confront increasingly complex long-term challenges, we believe actuarial thinking can make an important contribution to this evolving debate.