Policy paper

HM Treasury Evaluation Strategy

Published 30 March 2023

This document sets out HM Treasury’s vision for the use of evaluation in our policy-making, our approach to evaluation, and our role supporting the use of evaluation across government.

What is evaluation?

Evaluation is a systematic assessment of the design, implementation and outcomes of an intervention. It involves understanding how an intervention is being, or has been, implemented and what effects it has, for whom and why. It identifies what can be improved and estimates its overall impacts and cost-effectiveness.

Our evaluation vision

Evaluation is a critical tool for effective policy-making. Evaluation enables us to identify what works and what does not in pursuit of our objectives. It helps us manage the risk of uncertain interventions. It builds evidence to inform future interventions and it supports innovation through the testing of new approaches.

Evaluation is also crucial for accountability. Evaluation enables Parliament and the public to judge the effectiveness of government policy.

Our vision is for all government policy, programmes and projects to be subject to proportionate, fit-for-purpose evaluation that is genuinely useful for decision makers.

Our evaluation vision is reflected in our:

• Outcome Delivery Plan
• publications, including the Green Book, Magenta Book, and Public Value Framework
• joint sponsorship, with the Cabinet Office, of the Evaluation Task Force

Our approach to evaluation

Most evaluation that is relevant to the work of HM Treasury is delivered by other parts of government. Significant tax evaluations are conducted by HM Revenue and Customs, which works together with HM Treasury in a policy-partnership. Evaluations of public spending are typically led by the departments responsible for that spending.

While these evaluations are led by different departments, their results inform decisions made by HM Treasury, for example on tax measures at fiscal events and on spending allocations at Spending Reviews. HM Treasury’s decisions are also informed by the analysis and scrutiny of evaluations conducted by the Evaluation Task Force.

There are, nonetheless, areas where HM Treasury is the lead department and responsible for the evaluation of government policy. In these cases, HM Treasury pursues evaluation following the central government guidance on evaluation set out in the Magenta Book.

Examples where HM Treasury is the lead department for evaluation include:

• The Darlington Economic Campus
• The UK Infrastructure Bank
• The Centre for Finance, Innovation and Technology (though CFIT remains a non-public body)

Formal evaluations supplement other means of assessment of the success and impact of policies. These include:

• appraisal, following the guidance in HM Treasury’s Green Book
• reviews, for example the Independent Review of Ring-Fencing and Proprietary Trading

How we use evaluation results

In line with our evaluation vision, evaluation results are used both to support policy-making and as part of our commitment to accountability.

Evaluation results inform future delivery as well as official analysis, official advice to ministers, and ministerial decisions. For example, at Spending Review 2021 decisions were informed by the quality of available evidence in support of investment options and funding was confirmed in areas where a strong evidence base linked interventions to outcomes. Similarly, at Spring Budget 2023, policy to increase labour market participation was supported by assessment of previous programmes in the UK and overseas.

To deal with the significant economic challenge of inactivity, the government is deploying a wide range of policy interventions, including some which are innovative. The government is committed to monitoring delivery and evaluating the effectiveness of these interventions, to ensure efforts are focused on what works, and so the Office for Budget Responsibility have the evidence to underpin the labour supply impacts in their future forecasts. To support this evaluation, the government is providing £37.5 million additional funding for pilots and evaluations over 2023-24 and 2024-25 to continue to build the evidence base on what works to improve labour market outcomes.

In line with Magenta Book guidance, the Government Social Research Publication Protocol and the aims of the Evaluation Task Force, HM Treasury considers use and dissemination early in our evaluation work and has a presumption for maximum openness and transparency to allow others to critique – and learn from – our evaluations.

Driving standards across government

Our evaluation vision is for the whole of government, not just HM Treasury. Driving the effective use of evaluation across government is an important part of realising our departmental objectives, in particular to ensure taxpayers’ money is spent well.

Our guidance (including the Green Book, Magenta Book, and Public Value Framework), supported by our function scrutinising the spending of other government departments, helps the whole of government consider and deliver effective evaluation.

Our sponsorship of the Evaluation Task Force (joint with Cabinet Office) has institutionalised the importance of evaluation and allows HM Treasury officials to access expert evaluation advice when developing our own policy or scrutinising proposals from elsewhere in government.

Evaluation work plan

Darlington Economic Campus (DEC): evaluation of the process, impact and value-for-money of the new campus in two phases. First, an interim evaluation 12 months after the occupation of Feethams House in Autumn 2023 focusing on process and impact. Second, an evaluation additionally assessing value for money, taking place 12 months after the occupation of the permanent office.

The UK Infrastructure Bank (UKIB): HM Treasury will conduct a strategic review by spring 2024 that will review the Bank’s progress and financial performance.

The Centre for Finance, Innovation and Technology (CFIT): HM Treasury will construct an evaluation plan to trace whether positive impacts on the UK fintech industry are caused by CFIT.