1.32 In response to the Treasury's Committee conclusion that there was a flawed VfM appraisal process, HM Treasury said it was reviewing the approach to VfM assessment and intended to publish revised guidance in 2012.35 It made a similar commitment to the Committee of Public Accounts.36 In December 2012, as part of the launch of PF2, HM Treasury formally withdrew the VfM assessment spreadsheet and guidance and promised to publish an updated version of both in 2013. In 2014 HM Treasury wrote to the Treasury Committee and explained that it would now not be publishing a new VfM spreadsheet but would be publishing the delayed guidance by the end of 2014. However HM Treasury did not do so. HM Treasury told us that it expects public bodies to use The Green Book: Appraisal and Evaluation in Central Government guidance for all investment decisions.37
1.33 The Department for Education told us it was waiting for the new assessment model but when it did not emerge it had to develop its own model with the assistance of its financial adviser. The Department for Education's model, which has been used to estimate the VfM of PF2, continues to use the government discount rate and make "risk transfer" adjustments as was the case in the withdrawn model. However the tax adjustment figure is now based on a more accurate and lower estimate of tax that investors will pay.
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35 HC Treasury Committee, Public Finance Initiative: Government, OBR and NAO responses to the Seventeenth Report from the Committee, Twenty-fifth Report of Session 2010-12, HC 1725, January 2012.
36 HM Treasury, Treasury Minutes: Government responses on the Seventy Fifth, the Seventy Seventh, the Seventy Ninth to the Eighty First and the Eighty Third to the Eighty Eighth Reports from the Committee of Public Accounts: Session 2010-12, Cm 8416, July 2012.