On 16th May 2025 Salix Finance unexpectedly announced that there will be no funding for the Public Sector Low Carbon Skills Fund in financial year 2025/26.
The Low Carbon Skills Fund (LCSF) is run by the Department for Energy Security and Net Zero and is delivered by Salix. It has previously provided grants for public sector organisations to engage specialist and expert advice, and skills needed to create robust heat decarbonisation plans. This fund has been in place since 2021 and helped thousands of schools and trusts across the country to prepare heat decarbonisation plans and identify energy efficiency works.
The announcement came as a surprise to many of those in the school’s sector. There had been no signals that this funding would be cancelled this year and many of Barker’s clients were preparing in earnest to submit bids. Furthermore, there is currently no alternative grant/funding scheme that would support activity of this nature. Instead, Salix is encouraging organisations to contact their Local Net Zero Hubs for support.
For many schools, the LCSF grant funding has enabled them to take that important first step on their journey to net zero. Without the grant, many would not have been able to afford to commission technical advice required to complete energy audits and technically complex heat decarbonisation plans which cannot be done without specialist technical support.
The Low Carbon Skills Fund has also enabled many school clients to prepare the necessary technical information to support applications to the Public Sector Decarbonisation Scheme (PSDS). With the PSDS application process becoming increasingly complex and design-driven, it is now impossible for many schools to complete these without a prior investment in a Heat Decarbonisation Plan. Therefore, with LCSF now cancelled, this is likely to stop many schools and trusts in their tracks.
We at Barker remain adamant that there is a need for grant funding akin to the Low Carbon Skills Fund. The cancellation of funding, with limited alternative routes, will undoubtedly slow down many schools on their journey to net zero. We are keen to continue to support schools in their journey. As and when alternative funding routes come to light, we will share this with the sector. We hope this is a short-term issue and that the Government will announce new funding routes for this critical area of work very soon.