New round of Public Sector Decarbonisation Scheme funding to open in September 2022
Up to £635 million of government funding will soon be made available to public sector organisations, for the installation of low carbon heating and energy efficiency measures.
The latest phase of the Public Sector Decarbonisation Scheme (Phase 3b) opens for applications in September, and is available to public sector bodies in England, including NHS Trusts and local authorities.
PSDS was first introduced in 2020, to support the aim of reducing public sector building emissions by 75%, compared to 2017 levels, by 2037. The government estimates that as a result of the scheme, public sector bodies and taxpayers are expected to save an average of £650 million per year on energy bills over the next 15 years.
Upgrades are already under way through earlier rounds of the PSDS, with 734 grants awarded to public sector organisations across England so far. This funding round of up to £635 million is the second part of an overall £1.425 billion due to be allocated through the scheme between 2022 and 2025.
Changes to the scheme
There are several changes to Phase 3b of the PSDS, compared with previous phases. This includes the introduction of ‘sector soft caps’, which have been determined by each sector’s share of public sector carbon emissions. Education will get 37% of Phase 3b funding, and Health will get 28%. The remaining sectors, such as prisons, law courts and MoD buildings, fall into the “Other” pot, which is capped at 35%.
Phase 3b also increases the funding pot for multi-year applications spending in both 2023/24 and 2024/25 and makes up to £233m in FY 2024/25 available.
Key dates
Phase 3b of the PSDS opens for applications in September 2022, and funding will be allocated on a ‘first come, first served’ basis.
All applicants awarded funding for single year projects must complete all projects by Sunday 31 March 2024. Applicants successful for multi-year projects must complete by Monday 31 March 2025.
Learn more about Phase 3b of the PSDS in our updated guide.
