The Cost of Indecision: Is policy hesitation sabotaging UK net zero delivery?

One of the greatest threats to Britain’s net zero future is not opposition to decarbonisation, it is indecision. From paused procurement rules to vanished funding pipelines, government hesitation is quietly stagnating progress, stalling public sector action, and driving up costs. Behind the rhetoric of “green growth” lies a pattern of delay that is eroding the long-term confidence needed to deliver decarbonisation at scale.

Let's look at three recent examples where government's indecision is hindering local net zero action: the Treasury's decision to freeze Power Purchase Agreements for schools, and its failure to announce a successor to the Public Sector Decarbonisation Scheme.

A Big Freeze (the PPA Debacle)

Power Purchase Agreements (PPAs) are a popular financial model that has enabled schools to access solar power without upfront capital investment. Under a PPA, a third-party solar provider installs panels on a school’s rooftop at no cost. The school, in turn, agrees to purchase the electricity generated, usually at a cheaper, fixed rate than traditional electricity prices from the grid.

This model has become a lifeline for many public schools that lack the funding for sustainability upgrades. Beyond reducing carbon footprints, PPAs offer schools a path to significant long-term cost savings. In July 2025, the Treasury abruptly paused new PPAs for schools, who determined that these agreements, which are privately funded, actually constitute a form of public borrowing and should now be counted against the government's balance sheet and require direct approval from the Department for Education to approve. Please note that this is an 'interim position' pending a long term solution to be worked out with the Treasury.

So, what has been the fallout from this debacle?

• ~£40 million in solar projects delayed or cancelled (REA).

• Local authorities abandoned aggregated procurement frameworks built over 12+ months.

• Missed a window of solar PV installations on schools during the summer months when pupils are not on site (fantastic timing to introduce a freeze!)

• Developers redeployed teams; financiers pulled offers.

• Many grassroots solar providers now face crippling financial losses or even bankruptcy due to sunk costs and cancelled deals (Community Energy England)

The message to the market is simple UK policy risk = a massive commercial risk. Freezing a policy in this manner created massive uncertainty in the solar PV market for schools, forward planning lost momentum, signalled higher future costs due to new emerging risks (e.g., what will happen to the 'interim position') and financial losses. And this was at a time when schools have been desperate to save costs.

A Pipeline in Peril

The Public Sector Decarbonisation Scheme (PSDS), £3.67 billion across three phases — was one of the few reliable engines for public building retrofits and decarbonisation investments. Phase 4 closed to new applications in November 2024.

As at the date of this publication, no successor has been announced.

Public sector organisations (local authorities, NHS Trusts and schools) now face a multi-year funding void. They cannot plan to rollout heat pumps, insulate buildings and install double glazing or upgrade to LED lighting.

The result? Programmes stall. Supply chains shrink. Confidence collapses.

While GB Energy offers significant funds in solar grants and heat pilots, these are fragmented, short-term fixes, not the multi-year, predictable framework the sector needs.

The accompanying Public Sector Decarbonisation Skills Fund (LCSF) was officially ended with no funding available for the financial year 2025/26 in May 2025. This followed the government's decision to end the funding stream, as it is no longer deemed necessary due to the availability of alternative support options. Like you, we are still not entirely sure what those alternatives are.

There has also been the concern raised that GB Energy favours certain regions of the country with the grants, for example, just 10% of funding of an £80 million pot for solar PV grants on schools found their way to the East of England and South East (combined) despite having far more than 10% of the country's schools across the regions.

Questions are also around whether GB Energy will be taking on the role occupied by Salix Finance in managing future grant schemes and then whether the funding will be distributed in a similar fashion to its first tranche of grant allocations. B

Institutional Amnesia

The pattern is clear: build, deliver, defund, forget. No government, Conservative or Labour, has ever institutionalised these programmes into core domestic policy. Instead, net zero support remains project-based, time-limited, and politically disposable. This is not just funding loss, it is institutional amnesia - local authorities (and other public bodies) lose skills and must re-learn with each new scheme.

Local authorities, influencing ~82% of UK emissions, cannot decarbonise without certainty. Yet central government treats net zero as a discretionary grant pot, not a strategic infrastructure priority. Until this changes, net zero delivery will remain fragile, inefficient, and underpowered. Without certainty we will see decarbonisation teams disband, expertise walk out the door and missed opportunities to deliver energy efficiency upgrades and deliver renewable energy investments.

Every freeze, every 'pause and review', sees public bodies lose skills, capabilities and capacity to deliver net zero. This is not prudence. It is self-inflicted inefficiency.

What stability could look like:

To rebuild trust, government must act with institutional commitment, not ad-hoc announcements:

1. Publish a 5-year Public Sector Decarbonisation Framework (2026–2030), replacing PSDS with blended grant/loan funding.

2. Lock in PPA rules with statutory guidance, no more pauses, no risk of uncertainty

3. Reform local fiscal rules so councils can borrow against energy savings, not just revenue.

4. Mandate multi-year pipelines for heat, buildings, and renewables (take Denmark’s 20-year heat plans as an example)

Conclusion: Confidence Is the Cheapest Capital

Net zero is a 30-year investment transformation, not a political slogan. It needs to be built around predictability, not press releases. The most frustrating aspect of the indecision impacting net zero delivery, is that for other parts of Labour's ambition, such as, building new homes (at any cost...) the red tape is being stripped back and the Government's social media channels are flooded with the phrase "build, baby, build". At times it really does appear as though the complete opposite is happening with net zero aspirations...but at least it means that we don't have to listen to anyone saying "decarbonise, baby, decarbonise".

The UK’s net zero transition does not need endless new funding pots or headline-grabbing announcements. What it needs most is confidence, in markets, in institutions, and in delivery. That confidence is built not on rhetoric, but on clarity, consistency, and commitment.Every pause, delay, or missing announcement sends the opposite message.

Until the government understands that indecision is itself a policy choice, Britain’s net zero ambitions will continue to falter.

This is not for lack of ambition, but for lack of follow-through and succession planning. It is time that we joined up net zero delivery plans.