A quick guide to the new grant funding for public sector buildings

The government has launched its £1bn grant funding for public sector buildings scheme – organisations need to act quickly to benefit

A quick guide to the new grant funding for public sector buildings

The government has officially launched the £1bn Public Sector Decarbonisation Scheme, and – in parallel – the Public Sector Low Carbon Skills Fund. There’s only a short amount of time to apply – so organisations need to act quickly to benefit.

To help, here’s our 2-minute guide to the schemes.

The schemes… in a nutshell

The Public Sector Decarbonisation Scheme (the Grant Scheme, for short) has been launched to fund energy efficiency and heat decarbonisation measures in public sector buildings (non-domestic only).

It’s managed by Salix, and can finance up to 100% of the costs of capital carbon reduction projects.

Most public sector bodies are eligible for the funding – including central government departments, local authorities, maintained schools and academies, and NHS trusts.

If you don’t know where to start with identifying projects worthy of grant funding then there’s an additional pot of money to help: the Public Sector Low Carbon Skills Fund. You can use this funding to enlist external consultancy support to identify potential projects, apply for the grant scheme and even deliver the project. You can also use it to get help with developing a long term heat decarbonisation plan.

What projects can be funded under the Grant Scheme?

A full list of eligible technologies can be found on the Salix website, but the focus is on low carbon heating and heat decarbonisation technologies, such as heat pumps, electric heating, or connections to low carbon heat networks.

It can also be used for projects that reduce demand for heating (such as insulation and glazing), and measures that enable future heat decarbonisation (such as battery storage and metering). However, these must either be combined with a low carbon heating measure, be implemented in buildings that already have low carbon heating, or include a commitment to produce a longer term heat decarbonisation plan.

It can also be used to fund replacements for coal-fuelled or oil-fuelled heating systems (e.g. gas boilers or gas CHP) – but only if you can demonstrate that low carbon heating systems are not a viable option.

Aims and benefits

The Grant Scheme was announced in the summer as part of the Chancellor’s ‘Plan for Jobs’, to support the UK’s economic recovery from COVID-19. It’s hoped it will boost skilled jobs in the low carbon sectors, as well as supporting the government’s 2050 net zero goals by cutting emissions in the public sector. The main focus of the scheme is tackling emissions from heat – one of the most notoriously difficult areas to decarbonise.

Last but certainly not least, there will be direct benefits for the public sector too – these measures can future-proof buildings, improve comfort, reduce operating costs and contribute towards your organisation’s net zero targets.


Both schemes launched on 30th September, and the deadlines depend on the type of organisation… but there’s not much time to apply. 

Low Carbon Skills Fund deadlines

  • If you are using the fund for project development support, the deadline for applications from central government is Friday 30th October 2020. For wider public sector bodies it’s Friday 4th December 2020.
  • If you are using the fund for support with project delivery or to help you with your heat decarbonisation plan, the deadline is 18th November 2020 for central government, and 11th January 2021 for wider public sector bodies.

Public Sector Decarbonisation Scheme deadlines

  • Monday 9th November – for public sector bodies that require funding to be transferred between government departments at Supplementary Estimates.
  • Monday 11 January 2021 – for all other organisations.

 The Energy Advice Hub is brought to you by BiU – the UK’s leading energy consultancy. If you’d like more advice on the schemes and how to apply, get in touch on energy-hub@biu.com.

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