Public Sector Decarbonisation Scheme axed

The government has confirmed that they will not be extending their Public Sector Decarbonisation Scheme (PSDS) grants, after five years of allocating money to public sector buildings to replace inefficient heating systems.

The PSDS was launched in 2020 and has distributed more than £3.5 billion to schools, colleges, local authority buildings, hospitals, and other public sector bodies to help buildings upgrade their heating systems, allowing them to both save money on energy bills while also switching to more sustainable solutions, like heat pumps and solar panels.

Salix, a non-departmental body owned by the UK government, distributes funding on behalf of the Department for Energy Security and Net Zero, and confirmed that the government “has taken the difficult decision to commit no further investment for the public sector decarbonisation scheme beyond currently awarded projects.”

This follows the awarding of £940 million last month for the fourth and final phase of the PSDS, which distributed tens of millions of investment across local authority buildings. This will continue until the end of the fourth phase, which is in the financial year 2017-2028, to ensure that all projects on the scheme are fully funded.

Salix chief executive Kevin Holland said: “We’re proud to work with governments delivering key projects to reduce carbon emissions.

“Every day our expert teams work across the public sector as well as social housing sector to deliver project excellence and meet challenging net zero targets.

“We remain committed to supporting our Public Sector Decarbonisation Scheme stakeholders as they pursue their Phase 3 and Phase 4 projects.

“We will continue to support these organisations, working with them to meet deadlines and to showcase the incredible work being achieved.”