New funds to boost low carbon heating in Britain’s public buildings have been released by D-BEIS.

At a time when funds for energy efficiency measures are capped,  the Public Sector Decarbonisation Scheme has today received a further £635 million, tasked chiefly to replace legacy high-carbon, fossil fuel-based heating in town halls, council offices, schools and hospitals.

The cash is available to public sector organisations so they can install low carbon heating such as heat pumps and solar, and energy efficiency measures such as double glazing and loft insulation.

The scheme began in September 2020. From next month, public organisations such as NHS Trusts, schools and local authorities can apply for the latest round of grants.

The £635 million drawdown is the latest in an overall £1.425 billion due to be allocated through the PSDS between 2022 and 2025.

The cash is included in £6.6 billion the government is investing this parliament to decarbonise buildings. Over £2 billion of it is aimed specifically at lower-income households and saving people money on their energy bills.

Upgrades are already under way through earlier phases of the scheme, with 734 grants awarded so far to public organisations across England.  Existing grants have supported up to 30,000 jobs in the clean heating and energy efficiency sectors.

As in previous phases, Salix Finance, the public arm’s-length funding body, will judge applications.  Guidance on how to apply is published today here.

The PSDS’s goal is to strip 75% of carbon emissions, measured at 2017 levels, out of all public buildings by 2037.

Public sector bodies and taxpayers are expected to save an average of £650 million per year on energy bills over the next 15 years, according to the scheme’s administrators.

Energy minister Lord Callanan said: “We are already delivering upgrades to hundreds of public buildings across England, making them cheaper to run and saving taxpayers millions of pounds each year”.

Previous PSDS beneficiaries include;

  • Nottingham University Hospitals NHS Trust, given £70 million to install water source heat pumps at Queens Medical Centre. Air source heat pumps were fitted at Nottingham City Hospital, plus draught proofing and double glazing.
  • Leeds City Council received £4.3 million to decarbonise primary schools and child day care centres.
  • Birmingham Women’s and Children’s NHS Foundation Trust received £50 million to install clean heating and energy efficiency measures in their hospitals
  • The Royal Botanic Gardens, Kew was awarded over £4.4 million to decarbonise the Grade II listed Nash Conservatory and Jodrell Laboratory

The government is also providing £14 million in grants this financial year through Phase 3 of the Public Sector Low Carbon Skills Fund. This will provide funding for public sector organisations to access the skills and expertise needed to plan how to decarbonise heating in their buildings.


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