One year on from the cancellation of the Public Sector Decarbonisation Scheme, clarity and consistency are needed in the form of a long-term funding mechanism to catalyse the public sector’s net zero progress, writes Lee Tebbatt, managing director at Wilo UK
11 June marked an occasion – one that unfortunately has nothing to do with the World Cup kicking off. It also signalled one year since the government’s Public Sector Decarbonisation Scheme (PSDS) was quietly cancelled. Happy anniversary to those who celebrate.
After launching in 2020, over £3.5bn was given for public sector buildings to adopt decarbonisation and energy efficiency measures. Heat pumps, solar panels, insulation
and double glazing: you name it, there’s a good chance the PSDS covered it. It was seen by some as the perfect initiative to enable health estates and schools, to name just
two, to play their part in the nation’s net zero ambitions.
Following the chancellor’s Spending Review, however, it was dropped. The Department for Energy Security & Net Zero (DESNZ) confirmed existing funding would continue until 2028 and plans for after this period would be announced in “due course”.
One year on, a comparable long-term funding mechanism is yet to be unveiled, leaving a growing number of buildings without knowledge of and access to crucial asset upgrades.
Fragmented funding
While the sector has seen a mix of initiatives over the past year, the scale of this funding in comparison to what could have been received through the PSDS is yet to be matched.
The beginning of 2026 saw the launch of the Warm Homes Plan, which commits £15bn to helping homes decarbonise through a trio of low-carbon technologies: heat pumps, solar PV and batteries. This is exactly what homes need to prepare for a zero-carbon future, but why is there no longer an equivalent for the public sector?
Great British Energy’s solar rollout is among the most prominent initiatives designed to cut energy bills for public services. Around 260 NHS sites, 250 schools and 15 military sites are set to benefit from solar panel installations. Energy bill savings over the next three decades are expected to reach up to £520m.
This should absolutely be welcomed, as it will allow institutions across multiple industries to reduce utility bills and reinvest savings back into frontline services. Yet the same attention – and level of investment – must be put towards upgrading other assets that are just as responsible for a significant portion of the sector’s energy consumption.
Looking beyond solar
Take pumps, for instance, which account for around 20% of global electricity consumption. There isn’t a statistic specific to the UK public sector but it certainly won’t be far off that number. Be it those responsible for heating and cooling circulation, water supply or wastewater management, pumps are embedded into the daily operation of virtually every public building.
Legacy systems that run well below optimal efficiency are still commonplace, meaning there is a clear opportunity to upgrade them and unlock vital energy and cost savings. Upgrading one asset of a building, such as solar panels, will only get us so far. If pumps aren’t running on the latest technology, such as IE5 motors, whatever energy savings we get from solar might well be negated.
Identifying these inefficiencies is often the first hurdle for estates teams. Here, manufacturers can support with free energy audits and consultations, which play a valuable role in helping organisations prioritise upgrades with the funds they do have.
Staying on course
If the public sector is to play a notable part in achieving net zero, then funding mechanisms must reflect the full picture of energy use across estates. That means going beyond solar technology and heat pumps and ensuring that supporting infrastructure, including pumps and HVAC systems, is not left behind.
A long-term, well-funded successor to the PSDS would give hospitals, schools and other public sector buildings, the clarity and certainty they need to plan and deliver all-encompassing decarbonisation projects. We may well see DESNZ announce this in “due course” but as things stand, we risk slowing progress at a time when acceleration has arguably never been more important.
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