Public Sector Decarbonisation Scheme Opens New Phase

A new phase of funding for public sector bodies to fund energy efficiency and heat decarbonisation measures will open to applications on 12 October.

The Department for Business, Energy and Industrial Strategy (BEIS) launched the Public Sector Decarbonisation Scheme to provide grants to public sector bodies to fund energy efficiency and heat decarbonisation measures.

Delivered by Salix Finance, the Grant Scheme will allocate £1bn of grant funding which strongly aligns with BEIS’ mission and priorities: fighting coronavirus, backing business, unleashing innovation and tackling climate change.

The scheme will encourage green investment aligning with the Government’s Net Zero and clean growth goals. The Grant Scheme will be available for capital energy efficiency and heat decarbonisation projects within public sector non-domestic buildings including central government departments and arm’s length bodies in England.

The main aims of the scheme are to:

  • Deliver stimulus to the energy efficiency and low carbon heat sectors, supporting jobs
  • Deliver significant carbon savings in the public sector.

Phase 3b of the scheme has now been launched. It builds on Phase 3a, but refinements have been implemented regarding the proportion of funding made available for financing projects that deliver over more than one financial year.

This phase of the scheme will also emphasise focus on cost effective decarbonisation of heat and the overall achievement of carbon emission savings.

Public sector bodies in England are eligible to apply.

Applications will be assigned to one of the three sector categories – health, education or other:

  • Education – includes but is not limited to state primary schools, state secondary schools and universities and Local Authorities applying on behalf of schools only.
  • Health – includes but is not limited to hospitals and health centres.
  • Other – includes but is not limited to emergency services, clubs and community centres, law courts and prisons, Ministry of Defence buildings, museums and theatres. Applications which are mixed (e.g. a Local Authority application which covers a school and a leisure centre) will fall under the ‘other’ sector cap.

Phase 3b will allocate up to £635m of funding to be spent in financial years 2023/24 and 2024/25. This is split by financial year, with up to £402m to be allocated for 2023/24 and up to £233m to be allocated for 2024/25.

Applications will be allocated on a first-come-first-served basis to the appropriate sector pot until a sector cap is reached. Upon the point a sector cap is reached, funding allocation for that sector will be paused until all applications for other sectors have been allocated up to their own sector cap.

Phase 3b will open to applications on 12 October 2022 at 2pm. The deadline for applications will be the 31 October 2022.

(This report was the subject of a GRANTfinder Newsflash.)