UK Government Unveils £630 Million Energy Overhaul to Future-Proof Public Sector Buildings

Image Credit: University of York

A new wave of government funding—amounting to over £630 million—is set to transform the energy landscape of the UK’s public buildings. From schools and care homes to libraries and leisure centres, hundreds of sites will undergo crucial upgrades to slash carbon emissions and reduce long-term energy costs.

This funding, announced on 15 May, forms the latest allocation under the Public Sector Decarbonisation Scheme (PSDS), a grant programme dedicated to helping public sector organisations retrofit their properties with energy-efficient and low-carbon technologies. This round is part of the Scheme’s fourth phase, which totals around £940 million and will extend through the 2027–28 financial year.

What does this mean in practice? Think insulation that keeps the heat in, LED lighting that cuts electricity usage, double glazing that locks out drafts, and perhaps most importantly, the replacement of carbon-intensive heating systems with cleaner alternatives like heat pumps and solar panels that generate renewable power onsite.

Energy UK’s policy manager, Louise Shooter, said the funding will help to solve the “headache” of high bills, which have impacted public sector organisations for the best part of four years. Supported interventions, she added, will “cut energy costs permanently” while also reducing emissions.

But the impact isn’t limited to national figures on spreadsheets. On the ground, community institutions will feel the difference.

Take the Liverpool City Region Combined Authority, for example. Awarded more than £30 million, the region will use the money to modernise energy systems in key locations like Queens Park Leisure Centre, Birkenhead Central Library, and Chase Hey's Home for the Elderly.

Further north, Northumbria NHS Foundation Trust will receive £14 million+ to enhance heating infrastructure and improve energy efficiency across two sites—vital upgrades for an institution under constant operational strain.

The University’s Vice-Chancellor, Charlie Jeffrey, said: “The support from the Government is a vital catalyst for this transformative endeavour, which we believe will empower the next generation of sustainability leaders and deepen community understanding of renewable energy technologies.

“Beyond its crucial environmental impact, the site will serve as a living laboratory that will drive research, educate our students and bring benefits beyond our campus.”

Meanwhile, the University of York has secured a remarkable £35 million to help deploy a geothermal heating system—a significant step in the university’s ambition to achieve net-zero operational carbon emissions by 2030, as outlined in its 2021 strategic plan.