Limited budgets, Growing estate pressures. A greater need to invest

Kelly Crews explains how making your estate climate-change resilient must be about making smarter, evidence-led investment decisions that tackle multiple estate challenges to achieve long-term value.

The closure of the Public Sector Decarbonisation Scheme (PSDS) marked a significant shift for public sector estates. But while a major source of decarbonisation funding has come to an end, the need for investment has not, and this summer's heatwaves have placed renewed emphasis on adapting property to be climate-change resilient.

It's not a simple picture. Every estate team I speak with faces the same picture: ageing buildings, growing backlogs, rising energy costs, poor energy performance, net zero commitments and increasing climate risk, all competing for limited capital.

The need to invest is clear. The difficult question is where to invest first. Which buildings carry the greatest risk? Where can investment tackle backlog, energy, carbon and resilience together? And how do you make limited capital deliver the greatest long-term value?

Since 2020, PSDS has awarded more than £3.5bn through nearly 1,400 grants, making it a major source of investment in public sector buildings. But that funding landscape is changing. The June 2025 Spending Review confirmed that no further phases are planned, with Phase 4 bringing the scheme to a close in March 2028. PSDS may be ending, but the pressures it helped address are not, and the need for investment continues to grow.

Backlog is growing. So is the cost of delay.

The National Audit Office estimates the maintenance backlog across government buildings to be at least £49bn, with health and education carrying some of the greatest pressures. NHS backlog maintenance alone reached £15.9bn in 2024/25, including £3.5bn of high-risk works, while the school estate faces an estimated £13.8bn maintenance backlog.

Deferring investment does not make the problem smaller. Buildings deteriorate, energy costs remain high and planned works become more expensive, reactive interventions. With limited capital, the priority must be identifying where investment is needed most, and where it can tackle backlog, energy efficiency, decarbonisation and resilience together.

Regulation is making energy performance an asset issue

For private estates, the pressure is becoming regulatory. Government proposals would require privately rented non-domestic buildings over 1,000m² in England and Wales to achieve EPC B by 2031 where cost-effective, subject to secondary legislation.

2031 may sound distant. It isn’t. Buildings that fail to improve risk becoming harder to let, more expensive to operate and potentially requiring significant late-stage investment. Waiting for regulation to take effect also means competing for the same designers, specialists and supply chain. The time to understand which assets need investment, and in what order, is now.

One estate. One investment pathway

Backlog, energy, ageing assets, decarbonisation and resilience are too often treated as separate challenges, competing for the same limited capital. They shouldn’t be.

The starting point is a data-led view of the whole estate, combining condition, energy performance, carbon, risk and investment needs, identifying where to invest first, what interventions can solve multiple problems, and what can wait.

With limited capital, every intervention needs to work harder. Fabric, energy efficiency, backlog, replacement of fossil-fuel heating and integration of renewables need to be planned together, not as separate projects. A coordinated approach reduces demand, renews ageing assets and cuts energy, cost and carbon, delivering more from every pound invested.

The funding model is changing

Grant funding still has a role, but it can no longer be the only route to investment. The future will require a broader mix of public funding, private capital, PPPs, PPAs and other investment models to turn estate priorities into deliverable programmes. That starts with a strong investment case: an evidenced baseline, clear priorities, costed interventions and a programme capable of attracting different sources of finance.

In North Hertfordshire, we are delivering a £15.9m programme across three leisure centres, securing more than £7m of external funding and combining heat pumps, solar and new air handling units while minimising disruption. The programme is expected to reduce carbon by more than 60%.

The challenge now is not simply finding the next grant. It is building investable programmes and finding the right funding model to deliver them.

Prove the value, unlock the next investment

At Oxford City Council, investment across four leisure centres delivered a 56% carbon reduction, saving 963 tonnes a year, while a lake-source heat pump at Hinksey Outdoor Pool cut gas use by around 80%. At Queen’s Medical Centre in Nottingham, we replaced 18,000m² of 1977 single glazing while the hospital remained operational.

But delivery is only part of the story. Energy Synergy™ monitors actual performance against the savings promised in the business case. Proving the results helps build the case for future investment.

The grant landscape has changed. The need to invest has not. If you are deciding where limited capital goes first, that conversation needs to happen before the budget is set, not after.

Join our webinar

Join me at a special CPD-certified accredited webinar for universities called Decarbonising University Estates: Where to Invest, How to Fund It, How to Deliver It.

Date: Tuesday 29th September 2026

Time: 11am – 12pm

Join us: Register here

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RELATED FAQs
  • What are operational carbon emissions?
    Any emissions produced durnig the construction of a building are operational emissions, including powering machinery and lighting on site. Operational carbon emissions can also be associated with the operation of the building after it has been built and includes all the energy assoicated with lighting, heating, cooling and ventilationof the building.
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  • What are the benefits of a net zero operational carbon building?
    The benefits of net zero operational carbon building include: lower carbon emissions and energy use, reduced the cost of ownership considerably over many years, resilience to the impacts of our changing climate, conservation of natural resources, use of responsible, low-carbon resources and improvement in people’s health and wellbeing .
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  • What is net zero carbon?
    Net Zero means achieving a balance between the amount of carbon dioxide emitted into the atmoshpere and the amount removed from it. . Net Zero can be achieved by reducing emissions first e.g. using renewable energy or improving energy efficiency, then any remaining emissions are offset by investing in carbon capture and storage technology or by planting trees.
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  • What is building performance monitoring?
    Building performance monitoring refers to the continuous tracking and analysis of how a building operates in terms of energy use, environmental conditions, and system efficiency. Using a network of sensors linked to the building management system, viewed via an analysis tool such as Energy Synergy, allows for analysis of the performance of the building during occupation to confirm it is performing as it was designed and identify areas for optimisation.
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  • What is embodied carbon?
    Every material used in construction has an impact on the environment. From the moment raw materials are extracted from the earth, through their processing, manufacturing, and transportation to site, greenhouse gases are released into the atmosphere. These emissions are collectively known as upfront embodied carbon. Further embodied carbon emissions are associated with maintenance and replacement of building components during the building's liefecycle, and with end of life processing and recycle.

    Unlike operational carbon, which refers to the emissions generated from heating, cooling, and powering a building during its lifetime, embodied carbon is locked into the building from day one. It’s the carbon footprint of everything that goes into making the built environment: concrete, steel, glass, timber, insulation, fixtures, and finishes.

    As buildings become more energy-efficient and operational emissions fall, embodied carbon is taking up a larger share of a building’s total carbon footprint. In fact, for new buildings, embodied carbon can account for over half of total emissions across their lifecycle.
    Reducing embodied carbon is a complex challenge. It involves rethinking how materials are sourced, how they’re manufactured, and how they’re transported. It also means designing with longevity, reuse, and circularity in mind , choosing materials that can be recycled or repurposed, and minimising waste.
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  • What is retrofit?
    Retrofit upgrades existing buildings to improve performance and extend life—typically focusing on energy efficiency, comfort, and safety. The logic behind retrofit is that even extensive additive work to an old, inefficient building will still be better overall to the environment than the signficant embodied carbon emissions resulting from tearing down and building a new, more efficient building. Measures can include fabric improvements (insulation, airtightness), efficient heating/cooling and controls, ventilation, renewables, fire safety upgrades, and accessibility. Retrofit reduces operational carbon and cost while preserving embodied carbon already invested in the structure.
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