Fit-out contractors Willmott Dixon Interiors have put together a definitive guide to PSDS funding: what it covers, who exactly is eligible, and how you can apply.
What is the Public Sector Decarbonisation Scheme?
The Public Sector Decarbonisation Scheme (PSDS) is a UK government initiative designed to help public sector organisations reduce carbon emissions and improve energy efficiency. The scheme provides grant funding for energy-saving and low-carbon projects in public buildings, supporting the aim of reducing emissions from public sector buildings by 75% by 2037.
Administered by Salix Finance, PSDS funding is available to organisations such as schools, hospitals, local authorities, emergency services, and government buildings. The funding covers a wide range of energy efficiency improvements, helping public sector bodies reduce their environmental impact while cutting energy costs.
PSDS Phase 4: September 2024
The PSDS Stage 4 is the latest phase of a grant program, enabling public sector buildings to reduce their emissions by switching to cleaner methods of heating. Phase 4 of the grant is more targeted, focusing on projects that reduce emissions and provide the best value for money. Successful applicants must contribute at least 12% of the total project cost, will receive funding by the end of May 2025, and their projects must be delivered by 31 March 2028.
What does PSDS Funding cover?
PSDS funding is designed to support projects that replace fossil fuel-dependent systems with low-carbon alternatives. Eligible upgrades typically include:
- Heating system upgrades: Replacing gas boilers with air-source or ground-source heat pumps
- Building insulation: Enhancing walls, roofs, and windows to improve energy efficiency
- Renewable energy installations: Installing solar panels, battery storage, or wind turbines
- LED lighting upgrades: Replacing outdated lighting with energy-efficient alternatives
- Ventilation and cooling improvements: Implementing mechanical ventilation with heat recovery (MVHR)
- Smart Energy Management Systems: Integrating building controls to optimise energy use
Who is Eligible for PSDS Funding?
PSDS funding is available to public sector organisations in England, Scotland, and Wales. This includes:
- Local authorities and councils
- Hospitals and NHS Trusts
- Schools, colleges, and universities
- Emergency services (police, fire, and ambulance)
- Government departments and agencies
- Leisure centres and cultural buildings
Private companies and residential properties are not eligible for PSDS funding.
PSDS Funding: Application & Process
Applying for PSDS funding involves several key steps:
1. Check your eligibility
Ensure your organisation qualifies under the scheme’s criteria.
2. Identify energy efficiency measures
Conduct an energy audit to determine which upgrades are necessary.
3. Prepare a business case
Provide evidence of potential carbon and cost savings.
4. Submit an application to Salix Finance
Applications are assessed on carbon reduction potential, cost-effectiveness, and deliverability.
5. Receive funding and implement upgrades
If successful, projects must be completed within the given timeframe.
Avoiding Common Mistakes During Application
One of the most common mistakes an organisation will make when applying for decarbonisation grants is misunderstanding what the PSDS will fund. The scheme will only cover the extra costs of switching to low-carbon technologies; it does not pay for the standard system replacements. The funding will also not cover a system that still features fossil fuels, such as backup boilers fired by gas.
Willmott Dixon Interiors: Fit Out & Refurbishment
Willmott Dixon Interiors specialises in fit-out and refurbishment projects that help public sector organisations achieve their decarbonisation goals. With extensive experience in sustainable building solutions, we deliver energy-efficient upgrades aligned with PSDS funding.
If your organisation has secured PSDS funding in Phase 4 and is undertaking a decarbonisation project, we’re here to help. Contact us today to discuss your requirements and find out how we can support your journey towards sustainable, energy-efficient buildings.