Government announces funding allocation to meet net zero challenges

Salix to deliver energy efficiency schemes in years ahead

More than £2bn of government energy efficiency measures will be delivered by Salix Finance over the next few years, it has been announced today.

The UK government has revealed the allocation of £6bn energy efficiency measures which includes further funding for the Public Sector Decarbonisation Scheme and the Social Housing Decarbonisation Fund.

We will continue to deliver the schemes on behalf of government - driving the public sector to meet ambitious net zero targets as well as ensuring homes across the country are warmer places to live and more energy efficient.

Chief Executive Emma Clancy said she was delighted that the funding had been announced in the wake of COP28. She believes it now means organisations across the country may have the opportunity and confidence to plan their decarbonisation journey up until 2028.

She said: “We’re proud to work in this sector and be involved in the climate change conversation, ensuring that these vital schemes are delivered efficiently and effectively, providing value for public money.

“Together we will continue to increase the energy efficiency in some of our poorest insulated homes across the country and we will transform them into warm low carbon homes.

“We will continue to work on behalf of the public sector delivering the projects across our hospitals, universities, schools and colleges. These schemes have proved highly popular since 2020 and together we are now delivering some incredible projects creating better environments for students, patients and staff.

“We have a formidable challenge ahead of us, but every day, together with our partners, we are having an impact.”

The announcement today earmarks more than £1bn for the Public Sector Decarbonisation Scheme between 2025 and 2028 and £1.25bn for the Social Housing Decarbonisation Fund.

The schemes are run by the Department for Energy Security and Net Zero.

The Public Sector Decarbonisation Scheme provides grants for public sector bodies to cut their emissions. The grants enable public sector organisations to switch to clean energy, such as heat pumps as well as installing energy efficiency measures like insulation.

Since its inception in 2020 the scheme has received more than 3,200 applications with a value of more than £6.3bn across all phases to date. The scheme has made £2.5bn available over this period.

Today’s announcement also confirms Phase 4 of the Public Sector Decarbonisation Scheme.

We are also the delivery agent for Wave 2 of the Social Housing Decarbonisation Fund. The fund applies to eligible social housing landlords including local authorities and housing associations so they can install energy efficiency measures like heat pumps and insulation in socially rented homes.

Emma added: “We have all heard the statements made at COP28, and climate change issues are reported in the news every day. We simply cannot go fast enough to meet the vast challenges around reaching net zero.

“This announcement today is hugely positive because it gives some certainty for those organisations who want to tap into the Public Sector Decarbonisation Scheme. It allows public sector organisations to plan ahead and reduce their carbon footprint.

“It also means we can improve housing for so many people by continuing to ensure the Social Housing Decarbonisation Fund has a real impact.

“We look forward to providing further details about this funding in the new year and how it will drive the schemes we deliver.

“We will continue to work closely with the public sector and housing organisations across the UK on this crucial agenda. Together we can make a difference.”

Allocation of £6bn capital funding for households, businesses and public sector to make energy efficiency and clean heating improvements has been announced on 18 December. 

In the 2022 Autumn statement, the Chancellor announced that the new government funding worth £6bn would be made available from 2025-2028.