
The PSDS Era Ends – Decarbonisations Goes On
On 12 June 2025, the UK Government confirmed no new funding will be made available under the Public Sector Decarbonisation Scheme (PSDS). Existing projects awarded funding under Phase 3c and Phase 4 will continue to be supported until completion in March 2027 and March 2028 respectively. The PSDS has provided a necessary incentive to push forward on the net zero carbon road, much as the Feed in Tarifs (FiTs) and Renewable Heat Incentive (RHI) promoted growth in renewables. These latter schemes led to a sustainable industry primary ingrained in the private sector, but what will the future of decarbonisation look like?
What’s at Stake?
The loss of PSDS funding challenges public bodies to rethink their decarbonisation strategies. Without traditional capital support:
- School, hospital, and civic upgrades could face delays.
- Innovation may slow due to higher risk profiles.
- Carbon targets remain, but the route to compliance is less defined.
Yet, the urgency around climate action remains. The 2050 net-zero target—and intermediate local requirements—demand smarter, more agile approaches.
Don’t Lose Momentum:
One of the biggest risk now is inertia as there will be confusion with the loss of a planned approach to public sector decabonisation. Keep momentum by:
- Embedding carbon literacy
- Mandating carbon cost in project appraisals
- Aligning projects with future regulatory drivers (e.g., MEES, net zero procurement, NHS Net Zero Building Standard)
Maximise Existing Assets and Low-Cost Measures
Without major grant funding, focus could turn to lower-cost, high-impact measures, which form the basis of decarbonisation and in the interim period would keep the process going:
- Energy efficiency: Optimising BMS, lighting upgrades, draught-proofing, heat recovery systems.
- Behavioural change: Energy awareness campaigns, staff engagement, optimising occupancy use.
- Asset management: Fine-tuning existing HVAC systems, boiler optimisation, building controls.
Integrate Decarbonisation from the Start
- Embed sustainability into early-stage design and procurement, rather than treating it as an add-on.
- Mandate net-zero planning in estate strategies, capital planning, and refurb programme.
Opportunity in Transition
This policy shift is not the end—it’s a turning point. It paves the way for diversified, resilient funding and delivery models:
- Third-party financing: Including ESCOs and energy performance contracts.
- Collaborative investment: Community energy partnerships and green funds.
- Smarter procurement: Embedding decarbonisation into project scopes from day one

How Brookbanks Can Help
At Brookbanks, our multidisciplinary sustainability offering—combining net-zero assessments, energy and sustainability appraisals, and integrated technical consultancy—is designed precisely to navigate this new reality.
A New Playbook for Decarbonisation:
While loss of PSDS funding is a setback, it’s also a moment to reset expectations and build resilience into decarbonisation planning. Brookbanks’ integrated approach, combining engineering, environmental, commercial, and organisational expertise, is well placed to help the public sector pivot to this new paradigm:
Challenge:
- No PSDS capital
- Carbon targets still mandatory
- Fragmented delivery skills
- Need for financial rigour
Brookbanks Response:
- Develop finance-ready decarbonisation business cases
- Embed SES and net-zero assessments upfront
- Provide multidisciplinary frameworks and commercial oversight
- Leverage value engineering and procurement excellence
Moving Forward with purpose:
For public sector organisations committed to net-zero, the solution is clear:
- Act early – initiate carbon and energy assessments at concept stage.
- Reformulate financing – adapt to performance-based and third-party models.
- Collaborate across disciplines – tap into Brookbanks’ comprehensive technical and commercial teams.
- Build internal capability – capture learning, build confidence and lead change.

Let’s Work Together
At Brookbanks, we’ve helped numerous public sector clients deliver flood alleviation, highways, educational, and civic buildings projects—always with sustainability integrated from day one. Now is the moment to recalibrate, innovate, and build your roadmap to net-zero without PSDS. That’s where our team comes in.
Get in touch to explore how Brookbanks can help you unlock low-carbon investment and deliver decarbonisation that’s both effective and enduring.
Shawn Galliers is Director of Sustainability within Brookbanks’ Land, Development & Communities Group: Shawn.galliers@brookbanks.com

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