Get ready to apply for public sector decarbonisation grants

Decarbonisation of the public sector is getting a big boost with a multi-million-pound grant fund that is about to launch.

Salix Finance is overseeing Phase 3 of the Public Sector Low Carbon Skills Fund (LCSF), and the government has provided a £14 million pot to offer grants for public sector organisations to get the specialist and expert advice and skills they need on low-carbon heating.

That might be a new low-carbon heating plan or upgrading and improving a current one. Now’s the time for all eligible public sector bodies to move on this as the Application Portal for Phase 3 LCSF will open on Wednesday 15 June 2022 at 2pm.

There is a strict timetable, milestones and deadlines for the application process. After launch day all eligible public sector organisations can apply, and Salix will check they applications are fully completed and of the required quality.

Salix will look to award a Grant Offer Letter within 8 weeks subject to a fully completed and authorised application. When the scheme becomes oversubscribed, the Application Portal will close. There is no maximum or minimum amount of grant to be awarded.

Clean heat challenges

Most of the buildings in the public sector rely on fossil fuel-based heating and expert skills are required to identify and plan how these heating systems can be replaced, ideally at the end of their working lives.

The fund is to ensure that organisations have a robust heat decarbonisation plan and so will be able to take the next steps in reducing carbon emissions. The plans would enable them to think more strategically and develop detailed project proposals that will help them to apply for grant funding covering capital decarbonisation measures, or alternative sources of finance.

For example, applications to the Public Sector Decarbonisation Scheme (Phase 3 PSDS) can be submitted for projects identified in heat decarbonisation plans funded by the LCSF. The PSDS has £1.425 billion available over the financial years 2022/23 to 2024/25, with £475 million to be spent in each financial year.

However, Phase 3 LCSF is only available in the financial year 2022/23 and so all applications that receive funding must complete their heat decarbonisation plans before 31 March 2023. If the planning project does not complete before the final date there will be no funding available for the balance of the project.


Who can apply for LCSF?

The following organisations are eligible to apply:

  • Local authorities
  • Maintained schools within the state education system, including academies, multi-academy trusts and free schools
  • Nursery schools maintained by a local authority
  • Further and higher education institutions
  • NHS Trusts and Foundation Trusts
  • Central government departments and their arm’s length bodies (set out in the list of departments, agencies and public bodies as published by the Cabinet Office )
  • For central government departments where their roles are reserved, that is, not devolved to Scottish or Welsh Governments or the Northern Ireland Executive. This includes the Ministry of Justice and Ministry of Defence. Funding may be used for estates located anywhere within the UK
  • Emergency services.


  • Public Corporations
  • Registered charities, unless they are also non-departmental public bodies as defined by the Cabinet Office
  • Private sector organisations
  • Private sector organisations, including schools funded by charities, private schools, private colleges and private universities
  • Social housing.

Compliance criteria

Eligible organisations can apply for grant funding for projects which meet compliance criteria. Only eligible organisations listed can apply for this funding, solely for producing a heat decarbonisation plan, which must be for public sector buildings with a fossil-fuel heating system, The plan must take a “whole-building” approach” to decarbonisation.

Outputs that may be required as part of developing a heat decarbonisation plan include:

  • Feasibility studies
  • Detailed design
  • Investment-grade proposals
  • Specialist technical site survey
  • Building audit or site survey
  • Desktop analysis.

Plan guidelines

An eligible heat decarbonisation plan will:

  • Specify how the applicant will decarbonise buildings on its public sector estate, specifically identifying measures that reduce direct greenhouse gas emissions associated with fossil fuel use, in public sector buildings
  • Aim to maximise cost-effectiveness by taking a “whole building” approach for decarbonisation
  • Produce or facilitate the production of information and data required to develop an investment-grade proposal.


Applicants must demonstrate how they will ensure that their project provides value for money. Grants are only available for the cost of resourcing specialist private sector skills and expertise, such as consultancy, to undertake an eligible project.

Importantly, grants are only available for projects which meet “additionality” criteria, that is, to fund work that is additional and would not otherwise be completed without the grant. For example, grants will not be given to fund works already underway or agreed and approved through other funding sources.

They will not be given to fund internal resources, including existing full-time employees at the public sector organisation whose costs are already covered by internal budgets.

Grants must not be used for capital expenditure, such as the purchase of energy efficiency or decarbonisation equipment and costs in the application must not include VAT, unless this cannot be reclaimed from HMRC.

Applicants are encouraged to make a single application that contains all relevant requests. This will enable assessment to be completed quickly. For example, a number of schools in an area should focus on a combined application, with detailed buildings data for each uploaded in the application.

Next steps

The application process is complex and SaveMoneyCutCarbon can help. Book a carbon mentor call to assess your needs prior to applying for the funding when the portal opens on 15 June.

Book a Carbon Mentor Call Today

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