The latest phase of the Public Sector Decarbonisation Scheme (PSDS), Phase 4, is now open, offering significant opportunities for public sector organisations aiming to reduce their carbon emissions. Delivered by Salix and funded by the Department for Energy Security and Net Zero (DESNZ), this scheme supports public buildings, including schools and hospitals, in transitioning to cleaner heating systems as they work towards net zero. 

For those who haven't yet applied, the deadline for applications is 25 November 2024 at 2pm. Although the deadline is fast approaching, Tomson can still play a pivotal role in helping you strengthen your applications for future rounds or optimise your long-term carbon reduction strategies. 

Key Aspects of the Scheme 

The PSDS was established with an ambitious goal: to reduce carbon emissions from public sector buildings by 75% by 2037 (compared to 2017 baseline). Phase 4 of the scheme will span from 2025/26 to 2027/28, and funding will be allocated through a new, targeted approach, focusing on projects that provide the most cost-effective carbon savings. 

Key details include: 

• Targeted Allocation: Unlike earlier phases, which used a first-come, first-served model, Phase 4 prioritises high-impact projects based on grant carbon cost calculations. This metric assesses the efficiency of carbon savings relative to grant value, ensuring funds are directed to projects with substantial decarbonisation potential
• Grant Carbon Cost: To qualify, an application's grant carbon cost must not exceed £510 per tonne of direct carbon saved over the lifetime of the measures. This figure is calculated by dividing the grant value by the direct carbon savings generated by the funded measures. 
• New Eligibility Criteria: The definition of “public sector organisation” has been updated to align with the Procurement Act 2023, impacting eligibility criteria. Notably, this change could affect applications from higher education institutions. 

Implications for the Public Sector  

For public sector organisations, navigating these changes may require new strategies and collaboration with experienced consultants. Here are some key points to consider:

• Enhanced Focus on Carbon Efficiency: With funding increasingly tied to carbon efficiency metrics, organisations will benefit from in-depth carbon assessments. A Heat Decarbonisation Plan from Tomson can help you ensure your applications meet the threshold by understanding and optimising your grant carbon cost, boosting your chances of securing funding. 
• Long-Term Planning Opportunities: As the phase 4 deadline approaches, you can get a head start for future rounds by setting a strong foundation now. A detailed decarbonisation strategy that prioritises cost-effective, high-impact projects will provide an advantage in securing funding in later stages. 
• Impact of New Eligibility Rules: With the updated public sector organisation definition, it's essential for entities, especially in higher education, to assess their eligibility. Consulting experts can help clarify eligibility and strengthen application positioning.

Future Considerations 

Looking ahead, public sector organisations will need to remain adaptable as sustainability funding criteria evolve. The shift toward targeted allocations underlines the importance of demonstrating tangible carbon savings, which could become a benchmark in other grant schemes. Organisations should consider: 

 

We can work with you to refine your application submissions and long-term strategies. With expertise in carbon accounting and grant applications, we can help public sector bodies improve their grant carbon cost calculations. As the PSDS continues to evolve, organisations that establish a roadmap with realistic targets and metrics will have a competitive edge in subsequent funding rounds. 

Phase 4 of the PSDS highlights the UK government's commitment to decarbonising the public sector. For public bodies and consultants alike, aligning with these goals presents a crucial opportunity to drive impactful, cost-efficient change across the sector. 

If you need help with a decarbonisation project, with or without the Public Sector Decarbonisation Scheme, please let us know and contact us at: info@tomsonconsulting.co.uk