‘Significant savings’: Government unveils £553m public building energy efficiency plan

The government may have left businesses and campaigners frustrated with its failure to deliver new policies to boost domestic energy efficiency, but the public sector could soon unlock significant energy bill savings thanks to a major new wave of upgrade projects for public buildings.

The Department for Business, Energy, and Industrial Strategy (BEIS) today announced it had awarded £553m of funding to a raft of projects through Phase 3 of the Public Sector Decarbonisation Scheme. The investment is expected to save an estimated average of £650m of public organizations and taxpayers’ money per year on energy bills over the next 15 years.

Hospitals, schools, libraries, museums, and leisure centers across England are all set to benefit from the funding boost, which will enable an array of building efficiency improvements and heat pump, LED lighting, and other clean tech installations that are expected to slash emissions and energy costs. The projected return on investment on many of the projects has shortened significantly as a result of the soaring energy prices experienced in the past six months.

Overall 160 public sector organizations are set to benefit from the latest tranche of funding, including the likes of Birmingham Children’s Hospital, Manchester Fire and Rescue, and the Royal Botanic Gardens at Kew.

For example, Nottingham University Hospitals NHS Trust is receiving more than £70m to decarbonise Queens Medical Centre, while Greater Manchester Combined Authority is to receive £15.5m to install low carbon heating in various notable institutions, including Greater Manchester Fire and Rescue Service, the University of Salford, the National Football Museum and Manchester University.

Similarly, the Hartismere Family of Schools is to receive more than £600,000 to install a heat pump and improve the energy efficiency of Somerleyton Primary School in Suffolk, a school which was built in 1845 and still has a thatched roof. And Royal Botanic Gardens at Kew is to invest over £4.4m to decarbonise the Grade II listed Nash Conservatory and Jodrell Laboratory.

The government said the funding forms part of a £2.5bn investment package to upgrade public sector buildings between 2020 and 2025, with 381 public sector organizations across England having already received funding through the first two phases of the scheme.

“Using cleaner technology to heat our civic buildings is helping to shield public sector organizations from costly fossil fuels, especially at a time of high global prices,” said Business and Energy Minister Lord Callanan. “This funding will bring significant savings for taxpayers of well over half a billion pounds each year by making public buildings cheaper to run, heat and cool, whilst supporting economic growth and jobs across the country.”

Further funding awards from the Public Sector Decarbonisation Scheme are in the pipeline with the government set to publish guidance on how to apply for the next round of applications, Phase 3b, set to be published in July.

The latest funding was welcomed by Mayor of Greater Manchester Andy Burnham, hailed the funding as a template for how central and local government could work together in support of the net zero transition.

“Here in Greater Manchester we know we need to be taking bold and meaningful steps at every level to become carbon neutral by 2038,” he said. “The £100m funding that we’ve been awarded so far is helping our public sector to lead the way in this effort, showing exactly what we can achieve with the right investment and a collaborative approach. And cut more than 8,000 tons of harmful emissions, at the same time as supporting and safeguarding almost 2,000 jobs in our local economy.

“We hope this is just the start of a renewed effort to work together at national and local level, helping us to go further and faster in cutting emissions and tackling the climate emergency.”

The scheme is being delivered through public sector financing specialist Salix Finance. Annie Shepperd, chief executive at the organisation, said the investment was “transforming public buildings, driving down their carbon footprint and improving the experience of their users, including school pupils, patients and visitors to hospitals, and those all people using libraries and leisure centers “.

The announcement comes as the government continues to debate how to help households cope with soaring energy bills, with reports over the weekend suggesting Prime Minister Boris Johnson and Chancellor Rishi Sunak are locked in discussions over whether to introduce a windfall tax on oil and gas industry profits and what to do with the resulting proceeds.

The government has faced intense calls to introduce a windfall tax to help households cope with soaring energy bills and drastically expand energy efficiency programmes. But reports suggested that Number 10 remains opposed to the idea of ​​a windfall tax on ideological grounds arguing it is “unconservative”, and is insistent that if it were to go ahead the proceeds should be used to boost long term nuclear and offshore wind development.

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