Decarbonising public buildings in UK could cost £30bn, estimates show

Decarbonising the UK’s stock of public-sector buildings could cost up to £30bn, according to figures obtained by the BBC’s ‘Sunday with Laura Kuenssberg’ programme through a Freedom of Information Act request. 

The Department for Business, Energy and Industrial Strategy said the estimates were an “indicative” figure, based on current “undiscounted 2022 prices” and stressed that the costs were “highly likely” to change over time.

“We have halved emissions from the central government estate in the last 12 years and invested £2.5bn in supporting those running our public buildings such as schools and hospitals to make similar progress,” a government spokesperson added. 

“This is on top of our wider efforts to increase our use of home-grown energy such as renewables, increasing our energy security while meeting our net zero ambitions.”

The disclosure follows the government’s efforts to grapple with what has been described as an estimated “£50bn black hole in the public finances”, with sweeping tax rises and spending cuts expected in chancellor Jeremy Hunt’s forthcoming autumn statement.

The news has also been analysed in light of COP27, the summit currently taking place in Egypt where global leaders have gathered to discuss the climate change crisis.

In this context, the UK’s Climate Change Committee has stressed that the amount of money currently being spent by ministers on low-carbon projects was “insufficient” to meet the country’s target of cutting greenhouse gas emissions from public buildings by 75 per cent by 2037. 

“While the emphasis on public sector leadership is welcome, a larger, firm, multi-year funding settlement is needed beyond 2025 to provide certainty and achieve this decarbonisation target,” the Committee’s David Joffe said. 

The UK government has set a target of reaching net zero emissions by 2050. 

Currently, almost a fifth of UK emissions come from buildings, the Committee says. At the moment, there are 28.5 million homes and 1.9 million other buildings such as offices, shops and hospitals in the UK, the majority of which are still heated by gas boilers and which would need to be replaced by more sustainable alternatives. 

Decarbonising these buildings would include retrofitting equipment such as ground-source heat pumps and solar panels, all of which would come at a high cost. 

Despite the costs, Julie Hirigoyen, chief executive of the UK Green Building Council, said decarbonising public buildings is a “no-regrets investment for the government”.

“As energy bills soar, schools, hospitals, and public offices are wasting money on heat leaking from poorly-insulated roofs and walls,” she told the BBC. “At a time when public finances are stretched, it is ever more important to invest wisely in those opportunities that can reduce public spending over time.”

In addition to the cost of decarbonising public buildings, making these improvements to the totality of the country’s housing stock would require an investment of £250bn – equivalent to £9bn a year from the late 2020s to 2050 – according to the Committee. 

Currently, public sector bodies can access government funds to improve the energy efficiency of their buildings and reduce carbon emissions. With this goal in mind, more than £1bn has been spent so far on almost 20,000 projects around the country, according to Salix Finance, the company which administers the grants.

However, in November 2022, the UK’s Public Accounts Committee’s annual report criticised the government’s approach to carbon emissions reporting, stressing that “inconsistent” reporting of data across departments could undermine the country’s net zero target.