Baxi report highlights funding gap for school heat decarbonisation
UK – Existing schools face a gap between heat decarbonisation ambitions and the funding and regulation needed to deliver them, according to a new report commissioned by Baxi and prepared by Talan UK & Ireland.
Decarbonising the Education Estate Guide examines the policy, funding and practical issues affecting low-carbon heat across the education estate, with much of its regulatory and funding analysis focused on England. It identifies existing buildings not undergoing major refurbishment as a particular challenge, with limited regulatory pressure to replace fossil-fuel systems proactively.
Education buildings account for around one-third of public-sector emissions, while heating is typically their largest energy user. The Department for Education has similarly described emissions from education buildings as equivalent to around one-third of total public-sector emissions.
Funding landscape changing
One of the main funding routes, the Public Sector Decarbonisation Scheme, is now closed to new applications. Phase 4 is providing funding through to 2027/28, but applications closed in November 2024.
The Department for Education is also changing the way condition funding is delivered. More than £450 million was allocated through the Condition Improvement Fund for 2026/27, but CIF is due to be replaced by a new capital-maintenance programme from autumn 2028.
Alongside this, the £710 million Renewal and Retrofit Programme launched in April 2026. Initially focused on schools in the East Midlands, Yorkshire and the Humber and the South East, it is expected to expand nationally across England by 2029 and can include heating and electrical-system improvements.
The wider Education Estates Strategy is backed by £38 billion of education capital investment between 2025/26 and 2029/30, although this covers the broader education estate rather than heat decarbonisation alone.
Existing schools remain the challenge
The Future Buildings Standard will introduce tighter requirements for new non-domestic buildings in England from 24 March 2027, including low-carbon heating and higher energy-performance standards. Transitional arrangements will allow qualifying projects started by March 2028 to continue under the previous Part L requirements.
Baxi’s report argues that the more difficult issue is the existing school estate, where buildings outside major refurbishment programmes have fewer regulatory triggers for wholesale heating-system replacement.
Jeff House, director of policy and external affairs at Baxi, said: “What schools need now is practical guidance that helps them understand which options are available, what is likely to work for their estate and how to plan upgrades in a way that supports carbon, cost and comfort goals.”
The report also highlights electrical capacity, grid connections, capital costs and competing demands for estate investment as barriers to heat-pump deployment, arguing that heating upgrades need to be planned alongside building fabric and electrical infrastructure.
