UK government plans to implement green upgrades for public buildings

On 2 August 2022, the UK government’s Department for Business, Energy and Industrial Strategy announced approximately £635m funding for public sector organisations to install low carbon heating and energy efficiency measures. 

The announcement outlined several goals, including:

  • More funding will be made available to upgrade public buildings in England with affordable, low carbon heating and energy efficiency measures; 
  • Upgrades will help taxpayers and public organisations save an average of £650m per year on energy bills over the next 15 years; and 
  • Investment is part of £2.5bn total government funding for upgrading public buildings, such as schools and hospitals. 

Schools, hospitals, leisure centres and historical town halls could be among hundreds of public buildings across England to receive energy efficiency upgrades, helping to slash energy bills and save taxpayers millions of pounds each year. 

Up to £635m of government funding will be available to public sector organisations to install low carbon heating, such as heat pumps, and energy efficiency measures, including double glazing and loft insulation. 

The funding is available through the Public Sector Decarbonisation Scheme, with organisations such as NHS Trusts, schools, and local authorities able to apply for grants from September. Public sector bodies and taxpayers are expected to save an average of £650m per year on energy bills over the next 15 years. 

Providing clean heating and energy efficiency 

Upgrades are currently underway through earlier rounds of the scheme, with 734 grants awarded to public sector organisations across England and phase one alone supporting up to 30,000 jobs in the clean heating and energy efficiency sectors. 

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

“By helping even more public sector bodies ditch costly fossil fuels, we are taking an important step towards a more sustainable future while driving economic growth across the country and continuing to support tens of thousands of jobs.” 

Installing low-carbon heating systems powered by cleaner, cheaper, renewable energy will allow organisations to cut their use of costly fossil fuels where pressures are pushing prices up on global energy markets. It will support thousands of jobs and save taxpayers’ money as measures will ensure public buildings are cheaper to heat. 

The Public Sector Decarbonisation Scheme supports the aim of reducing emissions from public sector buildings by 75%, compared to 2017 levels, by 2037 – with guidance on how to apply for funding published today. 

This funding round of up to £635m is the second part of an overall £1.425bn allocated through the Public Sector Decarbonisation Scheme between 2022 and 2025. 

What businesses have received funding, and what will be done with it? 

Projects that have already received funding include Nottingham University Hospitals NHS Trust, which received more than £70m to install water source heat pumps at Queens Medical Centre. At Nottingham City Hospital, they installed air source heat pumps and fitted energy efficiency measures, such as draught-proofing and double glazing. Leeds City Council received £4.3m to decarbonise primary schools and child day care centres. 

Birmingham Women’s and Children’s NHS Foundation Trust was awarded more than £50m to install clean heating and energy efficiency measures in their hospitals and the Royal Botanic Gardens. Kew was awarded over £4.4m to decarbonise Grade II listed Nash Conservatory and Jodrell Laboratory. 

The funding is part of the £6.6bn that the government is investing in this parliament to cut fossil fuel usage and emission output from buildings, including households, whilst creating high-wage, high-skill jobs. This includes over £2bn aimed to decarbonise lower-income families and save people money on their energy bills. 

Salix Finance delivers the Public Sector Decarbonisation Scheme on behalf of the government. 

“There is no time like the present to push forward with the decarbonisation agenda as our country must meet its ambitious targets to reduce our carbon footprint and our consumption of very costly energy,” concluded Annie Shepperd, Salix Finance Chief Executive. 

“Salix is proud to work delivering projects which transform public sector buildings. This vital work is driving down our carbon footprint, making these buildings better places for people to work in and for the public, and saving taxpayers money.” 

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