Public Sector Funding Schemes

The main aim of the PSDS fund is to support projects which reduce direct carbon emissions from public sector buildings, such as schools, hospitals and local councils in England. Funding is administered by Salix. PSDS provides grant funding for any low or zero carbon initiatives that meet the eligibility requirements.

If you operate in the public sector, it’s more a question of whether your building(s) is/are eligible, but we can help clarify this.

If you are a public sector organisation and own the building, then yes. If you lease the building but are responsible for the operation and maintenance of utility services, then you could also qualify. You must be removing end-of-life heating equipment which is powered by fossil fuels in order to make an application.

There are some further caveats to qualifying, but we can help navigate through these.

It wasn't in phase 4. This is the main difference from previous phases. Instead, a targeted allocation approach was introduced. The order in which grants are awarded will primarily be driven by the application’s grant carbon cost.

30-35% of funding will be allocated to each public sector (healthcare, education and local authorities), and Salix are encouraging connections to heat networks, which we are experts in, having helped deliver some of the largest in the UK, such as the Leeds PIPES network.

Yes, although it should be noted that the purpose of this fund is to replace heating systems that are towards end of life (typically 10+ years old) with a low-carbon replacement, utilised in all buildings. A new system that only replaces some of the heating system or will become partially reliant on fossil fuel will need to be reviewed on a case by case basis to see if the individual circumstances are compliant with the application guidelines.

In phase 4, an application’s grant carbon cost is a key aspect of determining allocation of funding. It can be calculated by taking the requested grant value and dividing it by the direct carbon savings delivered by the carbon reduction measures solely funded by the grant.

Yes. The application’s grant carbon cost must not exceed £510 per tonne of direct carbon saved, calculated over the projected lifetime of the carbon reduction measures.

Yes. Salix have said that this is a key factor in deciding which applications will be funded, therefore it’s likely that the lower the grant carbon cost, the better.

We can help ensure the carbon reduction measures recommended give you the best possible grant carbon cost.

Applications were reviewed and successful applicants should have been awarded funding by around the end of May 2025.

Yes – any projects awarded PSDS phase 4 funding must be delivered by 31st March 2028.