PUBLIC SECTOR DECARBONISATION SCHEME

Infrastructure and Construction

Record date: 31 March 2026

Whole-life cost: £3.8bn
Published schedule: 08/07/2020 – 31/03/2028
NISTA delivery confidence: Not disclosed
Senior responsible owner: Paul Chambers

What the project is for

The Public Sector Decarbonisation Scheme has been in operation since September 2020, providing capital grant funding to support heat decarbonisation and energy efficiency improvements in public sector buildings. Its core aim is to reduce direct carbon emissions from the public sector. These reductions will contribute to the UK’s Carbon Budgets 4, 5, and 6, playing a vital role in achieving the UKs Net Zero targets.

Departmental delivery commentary

Overall delivery of live projects is progressing well. Although grant recipients continue to experience pressures from, for example, higher-than-expected costs and longer than anticipated timelines for delivery, projects are delivering at above our previously assumed level. As a result, delivery outcomes are looking promising. Compared to financial year 24/25 Q4, the NISTA/SRO Delivery Confidence Assessment rating at 25/26 Q4 remained at AMBER.

Schedule

The project is due to conclude on 31 March 2028, in line with the latest approved Business Case. In 2025, Ministers took the decision not to support further investment in PSDS, and no additional funding will be allocated.

Cost

In June 2025, the PSDS budget was reduced as part of Phase 2 of the 2025 Spending Review, with impacts on funding in FY 2026/27 and 2027/28.

Benefits

Modelled baseline benefits were revised to account for the reduction of budget in FY 2026/27 and 2027/28.