The Public Sector Decarbonisation Scheme (PSDS) has been axed as part of June’s government-wide Spending Review.
According to a circular issued by the Net Zero Buildings Engagement Unit in the Department for Energy Security and Net Zero, ministers took the ‘very reluctant’ decision not to support further investment in the funding initiative.
All current PSDS projects remain fully funded, but there will be no additional support from the scheme – set up to provide grants for heat decarbonisation and energy efficiency projects in non-domestic civic buildings, such as hospitals and libraries – beyond 2027/28.
The circular added that the government is looking at ways to incentivise the public sector to take steps to decarbonise its estate. The Spending Review signals that these could include regional and place-based initiatives, such as devolution deals between the government and elected mayors. Only small and medium-sized non-domestic properties are eligible for the Boiler Upgrade Scheme, which offers grants for replacing fossil-fuel boilers with low carbon options, such as heat pumps.
Salix, which administers PSDS on behalf of the government, said it will continue to support projects in phases 3c and 4 of the scheme until they are ‘complete and operational’.