There is more demand to deliver decarbonisation projects now than funding available

When the Public Sector Decarbonisation Scheme was launched at the end of September, £1bn of funding needing to be spent on projects in well under a year and with only a few months to prepare applications sounded like a challenge. However, the public sector has demonstrated that it has both the desire and the ability to deliver decarbonisation of its estate rapidly, the only thing holding it back is the availability of funds.

Through Teach the Future, a student led campaign to improve the teaching of the climate crisis with schools, some interesting facts on the PSDS scheme have recently been revealed in parliament.

How Much as the PSDS scheme oversubscribed by?

It has been confirmed by Lord Callanan, of the Department for Business, Energy and Industrial Strategy that by 11th January 2021, when the scheme closed, it had received applications totally £2.4 billion. Meaning that despite the very short timescales and the pandemic, the scheme was almost 2.5 times oversubscribed. There were 711 applications from schools and MATs seeking £429m of funding, a large amount of which will not be successful.

This shows the clear and immediate ability that the public sector has to cut carbon from its estate. With many authorities having declared climate emergencies the number of applications to this scheme, within a few months, shows that these are not empty words but that authorities are ready to deliver on these and implement decarbonisation schemes today.

Sadly 60% of applications will be unsuccessful as the funding was not sufficient to cover this current demand. First-hand experience suggests that there are many more organisations who wish to undertake projects but were unable to apply with the timescales due to the short application window and the additional burden and challenges that COVID was putting on them during this.

Is there likely to be more funding in future?

When asked what plans the Government had to provide funding to unsuccessful applications Lord Callanan responded “My Rt hon Friend the Prime Minister’s ten point plan for a green industrial revolution, announced in November 2020, includes a commitment for further funding for the Public Sector Decarbonisation Scheme in the 2021/22 financial year. Further information will be announced in due course.” It would therefore appear to be reasonable to hope that future rounds of this scheme may be announced in the budget in March.

The Government also recently tried to quietly remove over £1bn out of the Green Homes Grant scheme which has been widely reported to have struggled to deliver on its aims mainly as the scheme design is not fit for purpose. In order that this funding remains in the decarbonisation area all should lobby for this to be re-directed to provide additional funding into this first round of PSDS so that more applications can be funded. They are mainly ready to go and could be delivered in 2021 so it would appear to be a very positive reallocation of funding that would be able to deliver results both in terms of decarbonisation and post-COVID job creation at pace.

In 2019/20 the UK government announced a 5 year plan to spend £27.4bn on road projects between 2020 and 2025 including works on 4,000 miles of road. Similar levels of funding and investment are required to be spent on public (and third) sector decarbonisation with 5 year spending plans such as this laid out. If such funding were available then it would be feasible for many of the 2030 net zero carbon targets to be reached and many thousands of new green jobs to be created.

What you should do if you were not successful or able to apply in the first round

There are many disappointed public sector organisations who were not successful in this first round or who were unable to apply in time. The advice to these is that the future for additional funding is looking promising. What the PSDS scheme, and other similar schemes in the past, have shown is that success comes where schemes are already prepared and well developed before the funding is announced so applications can be made swiftly. Organisations should be encouraged now to work up their decarbonisation plans into detailed projects which have been fully costed so that they are ready to apply for any future funds as soon as they come through. There also remain SALIX zero interest loan funding (see below) for public sector although this excludes academy schools where the sister SEEF scheme has just closed.

SALIX Zero Interest Loan Funding for Schools and Public Sector Organisations

The SALIX scheme remains open to fund public sector energy efficiency projects without the requirement for having to include a heat pump or similar in the scheme. This funding provides the upfront capital to undertake projects that payback in under 5 years (or for schools this is extended to under 8 years) and then the loan is paid back from the energy savings it achieves. In this way is it ‘cashflow neutral’ to the public sector organisation. This is a Government scheme and therefore is pre-approved for schools and public authorities in line with their financial regulations. Schemes have to have a minimum capital value of £8,000 and there is no maximum. Academy schools cannot use SALIX in this form.

This funding route is advised to be used by all those sites where a heat pump or other decarbonisation of heat is not viable (i.e. they have an existing gas boiler which remains serviceable for many years to come heating via radiators or the like).

Inspired Efficiency is well placed to undertake the surveys and audits need to identify the energy saving measures, advise on the most appropriate funding routes and make applications for public sector organisations as well as managing the implementation project. It has recently been successful in obtaining funding for many schools through PSDS.

Please contact Matt Fulford for further information on matt@inspiredefficiency.co.uk – 07971 787363.

Teach the Future: Campaign for climate education