The Spending Review reduced funding for public sector decarbonisation by announcing that no additional support would be provided through the Public Sector Decarbonisation Scheme (PSDS). Since its creation, £3.5 billion has been distributed by the Department for Energy Security and Net Zero (DESNZ) to support public sector organisations to deliver heat decarbonisation projects, cost reduction and contribute to emissions reduction.

The public sector estate makes up approximately 2% of the UK’s emissions and had been a trail blazer in demonstrating how heat decarbonisation could be delivered, the grant funding provided by the PSDS were pivotal in enabling the sector to lead the way. Launched as a response to the economic shocks of the COVID-19 pandemic, the first phase of the PSDS enabled significant direct emissions reductions, and promised to support 30,000 jobs across the supply chain. Five years and four phases later, this number will be significantly larger.

From schools and libraries to hospitals and council offices, public buildings are expected to cut fossil fuel emissions by 50% by 2032 and 75% by 2037, compared to a 2017 baseline in advance of the wider built estate. These targets aren’t just aspirational, they’re essential to meeting the UK’s legally binding Sixth Carbon Budget.

This demonstrates the scale of the funding challenge that was never going to be met by public sector grants alone. So with or without the funding additional funding sources were going to be required.

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https://es.catapult.org.uk/insight/57-billion-for-green-public-buildings-costs-and-implications/