It's vital we rebalance funding allocations for public sector decarbonisation

The public sector is facing enormous pressures to deliver carbon savings and meet upcoming net zero targets - but support is far from equally spread across the nation.

Local councils across the UK are often responsible for significant property and infrastructure estates: from schools and libraries to office buildings and public amenities. With many of these estates built in the 20th century, there are substantial amounts of operational and embodied carbon which need to be addressed.

The Public Sector Decarbonisation Scheme (PSDS) provides grants for energy efficiency measures for public sector bodies in England and areas of reserved public services across the UK. It has proven invaluable in providing public bodies grants for decarbonisation measures, with over £711m awarded over the past three phases to local authorities alone.

Mace has worked with several councils to secure and direct funding towards retrofit measures across their estates, including Hampshire County Council’s to support decarbonising its school and corporate estate.

However, while PSDS is a fantastic resource, this funding is not reaching all public bodies equally.

The need to decarbonise is a nationwide issue, yet 33% of the total funds awarded over the past three phases went to just ten of 317 eligible local authorities. That’s a third of funding awarded going to just 3% of councils. In addition, over 50% of funding was awarded to the top twenty recipients.

With the application window for Phase 3c of PSDS opening in the Autumn, this funding imbalance must change. Responsibility for resolving this issue sits between the government, local authorities and the built environment industry.

Demanding applications

One of the most significant reasons for the disparity in PSDS funding allocation is the ability and resources available to councils to secure funding.

The process set out by Salix Finance is demanding, requiring detailed writeups of current and historic energy usage, what decarbonisation initiatives the council wishes to commit funding to, as well as how it will deliver its retrofit programme if funded.

This process presents significant hurdles for councils which lack the resources internally to develop strong applications, or the funding allocated to both employ consultants to support delivery or match-fund PSDS awards as required. While Salix can support the skills gap with funding through the Public Sector Low Carbon Skills Fund (LCSF), this is still unattainable for some.

As a result, there is a risk that swathes of constituencies across the UK miss out on funding for decarbonisation projects.

The Department of Energy Security and Net Zero must work closely with councils and the built environment sector nationwide to ensure more decarbonisation schemes are funded. The knowledge held by successful councils and the consultancies that supported them needs to be better shared, with clear government incentives, to drive more strong applications for PSDS funding. This is certainly happening in pockets, but we know our industry has far more to offer.

Institutional lack of data

Another key issue with retrofitting public sector estates is a severe lack of data around operational and embodied carbon.

There are a multitude of reasons for this, but the crux is the lack of  know-how to accurately translate their energy usage to carbon emissions or understand and work out embodied carbon across aging estaes.

However, the outcome is poor knowledge of where decarbonisation schemes are needed most.

This prevents councils from submitting successful PSDS funding, but also presents a further risk to successful applicants. For instance, if a council submits a successful application based on incorrect data, they could face significant legal repercussions.

This issue is not exclusive to local councils and requires a collaborative approach between the public and public sectors to overcome. Energy suppliers need to support the public sector to not only understand their energy usage but the steps required to increase their efficiency, while authorities need to invest in the skillsets required to analyse their data effectively.

Our industry can be a catalyst for this change, working with partners in both worlds. Working as strategic consultants and delivery partners, we have an opportunity to help solve this challenge and deliver lasting change for local authorities.

Ownership of the problem

The UK government has made a legal commitment to becoming net zero by 2050, a 100% reduction in greenhouse gas emissions compared to 1990 levels.

Politically, this long-term goal can be challenging to act on. While all mainstream parties are committed to the goal of decarbonisation, actual delivery of net zero by 2050 is potentially five or six general elections away and many more local elections across successive authorities.

While there are encouraging signs that many local authorities plan to hit net zero well ahead of the 2050 deadline, according to Climate Emergency UK’s 2022 Council Climate Plan Scorecards, around a fifth of UK councils having not published plans to tackle climate change at all.

It is clear there is a major risk that decarbonisation across public estates simply cannot happen in line with government targets.

PSDS funding offers a route to solving this challenge, enabling councils to invest in key decarbonisation schemes across their estates to best target net zero commitments.

However, it is not yet a silver bullet in its current form or value.

For the government’s net zero commitment to be reached by 2050, this inertia must be addressed with clear support and incentives to drive success across the public estate. Built environment professionals are chomping at the bit to drive real change on this issue and are well placed to offer strategic guidance to guide future government initiatives. Nevertheless, how the government supports the drive for net zero, either through PSDS or other mechanisms, remains to be seen.

Mace recently released a report examining key challenges in delivering non-domestic retrofit across the UK. You can read more about the report here.

This article was originally published via Property Week.