The Association of the British Pharmaceutical Industry (ABPI) commissioned Cambridge Economic Policy Associates (CEPA) to consider the application and design of the Green Book with respect to the Life Sciences Innovative Manufacturing Fund (LSIMF). The Medicines Manufacturing Industry Partnership (MMIP), which played a key role in supporting the creation of the LSIMF, provided extensive input into this project before and during its development.

The LSIMF is a UK capital grants initiative administered by the Office for Life Sciences (OLS), aimed at supporting growth in domestic manufacturing of human medicines, medical diagnostics, and medical devices. For globally mobile investment opportunities, the LSIMF improves the attractiveness of investment in the UK by reducing innovation risk and costs.

This project considered whether the use of the Green Book in appraising funding applications to the LSIMF – as well as the design of the Green Book itself – captures the full range and extent of economic and strategic benefits to the UK derived from investments in innovative life sciences manufacturing. This work utilises the latest available version of the Green Book, which was last updated substantively in 2022, and considers historic LSIMF applications. It draws on a detailed document review and consultations with stakeholders from industry and government, undertaken in May and June 2025.

Project appraisal is inherently challenging and features various trade-offs, such as the desire for a detailed assessment to ensure value for money, versus the administrative burden this may place on applicants. In this context, the government’s commitment to continuous improvement in project appraisal – as evident in the HM Treasury’s 2025 Green Book review – should be commended. Moreover, the LSIMF provides a practical example of positive action, with the Office for Life Sciences (OLS) seeking to adapt the LSIMF appraisal process to address known challenges. In light of government ambitions for advanced manufacturing and life sciences, there is a unique opportunity for consideration of refinements to the LSIMF and Green Book.

First, our analysis has identified that major benefits of innovative manufacturing in life sciences are not being fully captured within the current LSIMF appraisal process. Based on Green Book guidance, it is not straightforward to quantify, monetise or systematically assess several categories of benefits. This includes increased productivity, international competitiveness and export growth, agglomeration effects and spillovers, environmental sustainability, more evenly distributed growth across the UK, and – to an extent – national health resilience. LSIMF appraisals appear to place a disproportionate focus on benefits that can be readily monetised (primarily, short-term job creation) and reflected within relatively narrow benefit-cost ratios. Currently, the LSIMF application process does not have a clear methodological framework that could be used to systematically consider the full range of hard-to-monetise benefits.

Figure: Logic model linking LSIMF investment benefits to value creation and impact 

Second, whilst stakeholders strongly welcome the LSIMF as an important lever to anchor high-value manufacturing in the UK, our analysis finds a number of issues and potential areas for improvement to ensure the benefits from innovative manufacturing are fully captured. 

The full set of issues identified in our analysis is presented in the table below. Our findings align closely with the 2025 Green Book Review, which calls for clearer appraisal of transformational change, place-based benefits and non-monetisable impacts.

Finally, taking into account the findings above and building on the government’s recent Green Book review, we provide three main recommendations for HM Treasury and the OLS.

These recommendations complement each other to improve the LSIMF’s effectiveness as a stimulus for UK competitiveness. For example, implementing recommendation 1 (to introduce a broader, more holistic appraisal framework) would support the delivery of recommendation 2 (to strengthen transparency and predictability for applicants). A more holistic framework would also help to widen the range of benefits considered by appraisers without necessarily increasing the administrative burden on them or applicants, thereby progressing recommendation 3 (to increase proportionality).