England to get £1.8bn to boost energy efficiency of homes and public buildings 

The government has announced that over £400 million has been allocated to public sector bodies across England to reduce their carbon emissions. 

The government said 144 public sector organisations responsible for hospitals, schools, leisure centres, museums and universities will benefit from this support.

The funding is part of a £1.8 million Social Housing Decarbonisation Fund, Home Upgrade Grant and Public Sector Decarbonisation Scheme to upgrade social homes and public buildings.

The funding for public buildings is being delivered through the Public Sector Decarbonisation Scheme, which provides grants to public sector bodies to fund low-carbon heating, renewable energy and energy-efficiency measures such as heat pumps, solar panels and insulation. The funding will go towards upgraded heating systems, powered by cleaner, cheaper, renewable energy, will reduce the use of fossil fuels exposed to volatile global energy prices – supporting thousands of jobs and saving taxpayers hundreds of millions of pounds. The scheme is being delivered on behalf of the government by Salix Finance.

Organisations set to receive funding include Adur and Worthing Councils, Salisbury NHS Foundation Trust, Northumbria University, Greater Manchester Academies Trust and many other recipients across England looking to improve the sustainability of their buildings.

Green energy sector

The scheme aims to support the government’s commitment to reduce emissions from public sector buildings by 75% by 2037, compared with 2017 levels, as first set out in the 2021 Heat and Buildings Strategy. The commitment follows significant progress the UK has already made towards reaching net zero – cutting all emissions by 48% between 1990 and 2021, which is faster than any other G7 country. Decarbonising the public sector with low-carbon heating and energy-efficiency measures is also expected to save the public sector an estimated £650 million a year on average to 2037.

Salix Finance CEO Annie Shepperd said: “There is a huge amount of passion and expertise in the green energy sector, and Salix is proud to be supporting the hundreds of decarbonisation projects that have been made possible through the Public Sector Decarbonisation Scheme. Each one represents the best evidence of government and public bodies working together to achieve great things.”

The government has also partnered with Energy Systems Catapult to launch a freely accessible suite of tools, templates and guidance to support the public sector in further decarbonising their sites. This support will help public sector bodies from the first stages of developing a strategy, through funding, installation and completion, to help make achieving net zero sites and energy savings simpler. This is a continuation of the government’s award-winning Modern Energy Partners programme which has worked with 42 sites to explore different avenues for decarbonisation.

More than 115,000 homes across England are to also get upgrades to improve their energy efficiency and save residents money on their bills as a part of the funding. 

Secretary of state Grant Shapps said: “We know this is a difficult time for families, which is why the government is covering around half a typical household’s energy bill this winter. This is a huge investment that will help households save hundreds on energy bills and see them heat their homes for less, and stay warm for longer.

“Not only this but the funding is also a huge boost for job creation and economic growth, opening up new and exciting opportunities across the UK’s ever-expanding green sector.”

Lord Callanan, minister for energy efficiency and green finance, said: “The UK is truly a world leader when it comes to reducing carbon emissions and the progress we’ve made over the last decade has been remarkable. But we can’t rest on our laurels and must continue to drive forward progress, setting a standard for other countries to follow.

“Reaching net zero means considerable action from the public sector as well as the private sector. Through the Public Sector Decarbonisation Scheme funding allocation announced today, we are empowering public bodies to save the taxpayer hundreds of millions while packing a punch on our ambitious and necessary climate goals.”

Local authorities, providers of social housing, and charities have been awarded a huge injection of £630 million, to come from Phase 2 of the latest stage of the Home Upgrade Grant, while £778 million will be provided through the most recent wave of the Social Housing Decarbonisation Fund. An additional £1.1 billion in match funding will be added to this through the Social Housing Decarbonisation Fund, bringing the total to £2.5 billion to upgrade social and private homes in England.

The funding will be rolled out from April 2023 to upgrade homes over the next two years.

Energy-cutting and cost-saving measures provided through the schemes include exterior wall insulation, cavity wall insulation, loft insulation, new windows and doors and draft-proofing measures, as well as heat pumps and solar panel installation.

The schemes form part of the government’s commitment to reduce overall UK energy demand by 15% by 2030, as well as supporting the ambition for the UK to move towards greater energy independence.

The Home Upgrade Grant is supporting over 25,000 low-income homes across England by installing energy efficiency measures and low-carbon heating. Those being aided are typically the worst quality, off-grid homes most in need of upgrading, with an EPC rating of D to G. Improving these homes comes with the added benefit of supporting 7,000 jobs.

Louise Hutchins, head of policy and public affairs at UKGBC, said: “This welcome investment in energy efficiency will deliver much-needed support for some of the poorest households in the coldest draughtiest homes and to public services struggling to pay bills. 

“Significantly higher levels of government investment will be needed over the coming years to turn the tide on the country’s energy efficiency and climate challenge. The schemes will need to become much less complex to administer with sustained predictable funding in order for local authorities and others to plan the work and for industry to scale up and skill up. The economic prize is huge – worth £56 million to the UK economy and 500,000 skilled jobs over a decade.

"The IPCC couldn’t be clearer that reducing energy waste is one of the biggest opportunities we have to keep global temperatures below 1.5 degrees.”