Get set for Public Sector Decarbonisation Scheme phase 3c funding

The Department for Energy Security and Net Zero (DESNEZ) and its delivery partner Salix Finance have made £230 million available for low-carbon and energy-saving improvements to public sector buildings for 2024/25, with further funding for 2025/26 to be confirmed this autumn.

Phase 3c of the Public Sector Decarbonisation Scheme (PSDS) will support the work of councils, NHS Trusts, universities, schools and government agencies or departments to make their property climate change resilient and meet Net Zero targets.

Timing and Eligibility

With an additional financial year of funding granted by DESNEZ for Phase 3c, it increases the value of the overall funding to the scheme and will enable Phase 3c projects to be delivered across two years.

There are two application types in PSDS phase 3c:

• Projects which start spending in financial year 2024/25, which must be completed by 31^st March 2026
• Planning year application – for projects with spend in 2025-26, which can use 2024/25 as a planning year to design and develop these projects first. They must also be completed by 31^st March 2026 to qualify.

Preparing Your Application

It is important to prepare in advance when applying for PSDS funding, understanding the buildings you wish to target and identifying the most suitable low carbon solutions whilst ensuring you meet PSDS funding criteria.

The application guidance including the application form is available now on the Salix Finance website here

Funding is extremely competitive, so it is vital to start preparation now.

How can Willmott Dixon support you?

Our Decarbonise Today team has specialists to help you take advantage of the latest round of Public Sector Decarbonisation Scheme funding. We can support the preparation of your grant application, procurement routes, and overall delivery of your project. We understand the PSDS scheme and the importance of being ready to apply when the portal opens for submissions in the Autumn.

Our specialist team has over 30 years’ combined experience and includes:

• Kelly Crews has developed and delivered decarbonisation and energy efficiency programmes for a large local authority and NHS hospital trust including projects with PSDS funding.
• Jo Mills was previously Director of Programmes at Salix Finance and helped lead delivery of the first rounds of PSDS funding.
• Callum Barnes has extensive technical experience having worked in the low-energy and sustainability sector for 12 years.

We will assign a dedicated person to work with you to develop your application. We will base our advice on current and recent experience of delivering projects on the ground to ensure project viability and mitigate delivery risks.

What buildings is this suited for?

PSDS encourages a ‘whole building approach’ while also replacing ‘end of life’ fossil fuelled heating systems with low-carbon solutions such as heat pumps.

The grant funding has value for money criteria and will fund up to £325 for each ton of carbon emissions saved over the project lifespan. Every applicant must pay for the ‘like for like’ replacement costs of the fossil fuel system, contributing a minimum of 12% of the project cost. Application requirements are quite complex, so it is worthwhile appointing experienced advisers.

Funding is chiefly for capital costs, but the cost of external consultancy and management fees may be included.

Click here to speak with our team

Click here to go directly to the funding portal