A new round of Public Sector Decarbonisation Scheme funding has been announced, to help fund heat decarbonisation in public sector buildings. With the application portal for Phase 3C set to open this autumn, we’ve outlined the key pieces of information that businesses need to know to begin the application process.

What is the Public Sector Decarbonisation Scheme?

To help achieve the 2050 carbon emissions reduction targets set by the UK government, the Department for Energy Security and Net Zero set up the Public Sector Decarbonisation Scheme in 2021, administered by Salix, a non-departmental public body. The England-based scheme offers grants for public sector bodies to finance heat decarbonisation and energy efficiency measures in their buildings.

An equivalent scheme is open to public sector buildings in Scotland. Learn more here.

Phase 3c has received an additional year of funding, which will maximise overall possible funding for the schemes and enable Phase 3c projects to be completed over the course of two financial years. Phase 3 of the scheme is worth £1.425bn in total, with Phase 3c receiving up to £230 million in funding for 2024/2025. Additional budget for 2025/2026 will be confirmed this autumn.

Who can apply?

The Public Sector Decarbonisation Scheme Phase 3c is open to applications from public sector organisations in England that align with the Public Contracts Regulations 2015. This includes central government departments, local authorities, institutions of further and higher education, schools, and NHS trusts. Specific guidelines can be found in Salix’s Guidance Notes.

Applicants can include energy efficiency measures and other enabling works, that are additional to the replacement of the fossil fuel heating system, where they support a whole building approach to decarbonisation.

When do applications for the Public Sector Decarbonisation Scheme open?

While there is not currently a set date, the Application Portal is expected to open in October 2023. The application form for Phase 3c is currently available to download from Salix’s website.

Applicants are also able to submit separate applications for different projects or submit a single application that combines several projects if they are delivering across one or two financial years. For example, a local authority could have separate applications based on the site types within their estate.

There are two application types:

  • Applications for projects which start spending in financial year 2024/25 that must complete by 31 March 2026.
  • Planning Year applications for projects with spend in 2025/26 only, using 2024/25 as a Planning Year, to develop and design their projects. These must also be completed by 31 March 2026.

Funding for the Public Sector Decarbonisation Scheme is often snapped up quickly.  Get in touch with our experts at Sustainable Energy First for advice, so your organisation will be ready when the application portal opens.