Existing funding to continue until 2028 with subsequent plans to be announced in due course
The government has axed a scheme for upgrading energy efficiency in public sector buildings.
The Public Sector Decarbonisation Scheme (PSDS) delivered more than 拢2.5bn in its first three phases for measures such as heat pumps, solar panels, insulation and double glazing, with further funding of nearly 拢1bn recently announced.
But the Department for Energy Security and Net Zero (DESNZ) has told 性吧电台 that the scheme has been dropped after the spending review, leaving uncertainty about how upgrades will be funded when the current phase expires in 2028.
The department said it would set out plans for the period after 2028 in due course.
In a post on LinkedIn, Dave Wakelin, director of sustainability at Gleeds, said he had waited for the release of the spending review with a 鈥渟ense of trepidation鈥� and was unable to find mention of public sector decarbonisation when Treasury documents were released.
鈥淚 hoped because it was already committed in the Budget that its omission wasn鈥檛 ominous,鈥� he wrote.
Yesterday, he was told by Salix Finance, the non-departmental public body that delivers funding for the scheme, that it was no longer being funded.
It comes after the withdrawal of funding for the Low Carbon Skills Fund (LCSF) in May.
According to the government鈥檚 website, PSDS and LCSF were intended to support the reduction of emissions from public sector buildings by 75% by 2037, compared to a 2017 baseline.
鈥淣either LCSF or PSDS were perfect by any means, but they did provide a vital source of funding for local authorities, hospitals, schools and many other public sector organisations to save energy, carbon and money,鈥� Welkin said.
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鈥淧SDS has helped replace failed heating systems in schools, keeping students warm. It鈥檚 replaced roofs on hospitals, helping patients recover from illness. It鈥檚 replaced windows in our prisons, improving security and stopping drugs getting behind bars.鈥�
However, responding to Wakelin鈥檚 post, Steve Connolly, chief executive at Arriba Technologies, a low carbon heating and cooling firm, said that the scheme was being 鈥渕ismanaged鈥� with a small number of professional services firms 鈥渟cooping up disproportionately large grants for their clients鈥�.
The fourth phase of the scheme was confirmed last September, with allocations confirmed only last month.
This latest phase, which covers the financial years between 2025/26 and 2027/28, saw the distribution of 拢940m across the country.
A DESNZ spokesperson said: 鈥淥ur settlement is about investing in Britain鈥檚 renewal to create energy security, sprint to clean power by 2030, encourage investment, create jobs and bring down bills for good.
鈥淲e will deliver 拢1bn in current allocations of the Public Sector Decarbonisation Scheme until 2028 and, through Great British Energy, have invested in new rooftop solar power and renewable schemes to lower energy bills for schools and hospitals across the UK.
鈥淲e want to build on this progress by incentivising the public sector to decarbonise, so they can reap the benefits in lower bills and emissions, sharing best practice across government and exploring the use of repayable finance, where appropriate.鈥�
A government assessment of phase 3a and 3b projects identified a number of issues with the scheme, including delays and cost inflation, with more than a tenth being abandoned subsequent to grants being offered.
Stakeholders interviewed for the report also identified 鈥渄ifficulties in obtaining skilled contractors and equipment鈥�, especially air source heat pumps.
The first come first served approach to awarding funding was also said to be 鈥渆ncouraging applicants to opt for more straightforward projects鈥� and 鈥減otentially undermining the achievement of PSDS objective by restricting the opportunity for larger [and] more complex measures which may have delivered greater carbon reduction benefits鈥�.
But the consensus among stakeholders and industry representatives interviewed for the report was that the scheme was 鈥渃urrently key to sustaining the existing UK heat pump market鈥� and that it was 鈥渟een as vital in enabling many public sector organisations to invest in heat decarbonisation鈥�.
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