The Government is committed to decarbonising a significant proportion of public sector buildings by 2030. This initiative is part of the broader effort to reduce carbon emissions and achieve net-zero targets. The Net Zero Strategy set-out the government’s commitment to halve direct emissions from public sector buildings by 2032 and an aim to further reduce them by 75% by 2037, both against a 2017 baseline.

To support this, up to £3.8 billion is being invested through the Public Sector Decarbonisation Scheme over the financial years 2020/21 to 2027/28 to provide grants for public sector bodies in England to fund heat decarbonisation and energy efficiency measures.

The Government is committed to ensuring that the 1.5 million homes we will build over the course of this parliament will be high quality, well designed and sustainable.

In 2021, the Government introduced an uplift in energy efficiency standards, which came into force in June 2022. New homes are now expected to produce significantly less CO2 emissions compared to those built to previous standards, with many homes already being built with better insulation, solar panels, and heat pumps.

Future standards, to be introduced later this year, will build on the 2021 standards and set new homes on a path that moves away from relying on volatile fossil fuels, ensuring they are fit for a net zero future. These homes will be future proofed with low carbon heating and high levels of energy efficiency, including high quality insulation. No further energy efficiency retrofit work will be necessary to enable these homes to become zero-carbon over time as the electricity grid continues to decarbonise.

Heat pumps will play a pivotal role in the decarbonisation of heat in homes, and the Government is committed to supporting their adoption.

Support is available to help households to upgrade to a heat pump, through schemes like the Boiler Upgrade Scheme which provides grants of £7,500 towards the cost of installation. Current schemes, like the Social Housing Decarbonisation Fund and the Home Upgrade Grant, also remain in place to provide financial support for installations in low-income households and social housing.

Our Warm Homes Plan will set out further Government support for investment in insulation and low-carbon heating, with the goal of upgrading five million homes over this Parliament. We will announce more details in due course.

The Government continues to support both owner-occupier and private rented sector households to improve the energy efficiency of their homes. Landlords are therefore eligible to claim support to install low-carbon heating or energy efficiency upgrades in their properties under schemes like the Boiler Upgrade Scheme and Energy Company Obligation (ECO) 4.

The Government keeps all aspects of the tax system under review and any decisions on future changes will be taken in the context of the wider public finances.

The noble Lord is right about the efficiency of heat pumps and about the cost of electricity. Later this year we will issue a consultation on so-called price rebalancing, which will attempt to bring the electricity price down relative to gas.

The Government understands that green, lower-carbon products are more efficient and cheaper to run. However, current distortions in electricity and gas prices do not always make this the case. We want to make it easier for consumers to make the switch to green products, such as heat pumps, by ‘rebalancing’ prices between electricity and gas to remove these distortions.

In ‘Powering Up Britain’, the Government accepted the recommendation from the Independent Review of Net Zero that Government should commit to outlining a clear approach to gas and electricity price rebalancing by the end of 2023/24 and should make significant progress affecting relative prices by the end of 2024.

The Department will provide further information in the coming year.

In February 2023, NHS England published its ‘NHS Net Zero Building Standard’. The Standard provides technical guidance on achieving whole life Net Zero carbon including the electrification of heat and energy performance standards for new healthcare buildings and major upgrades. A copy is attached.

The National Health Service is committed to having a fully decarbonised estate by 2040. The new hospitals that will be delivered as part of the New Hospital Programme will be developed to meet these wider NHS Net-Zero-Carbon standards and underpinned by the new Standard. This includes a fabric first, highly insulated approach aligned with regulations and building safety requirements. The energy and fuel sources will vary from site to site, but the principles of low-energy and low-carbon are being embedded into each new hospital build.

The date and means to fully decarbonise the Whitehall Boiler System are not currently known, as the next phase (Phase 2) of the project to reduce carbon emissions / decarbonise is currently undergoing a feasibility / options appraisal and is anticipated to be the subject of an investment decision as part of the next spending review (SR).

Phase 1 includes installation of pipework lagging (completed 2021/22) and replacing heat exchangers to lower the operating temperature (to be completed from 2022/23). Phase 1 will result in a carbon saving of approximately 17%.

Phase 2 is anticipated to run from 2024 to 2028 and include delivery of Ground Source Heat Pumps to achieve carbon savings of approximately 71% (including Phase 1 carbon savings).

Phase 3 is a further potential scheme that could connect into a wider district heating system anticipated from 2026 to 2035. Phase 3 could achieve carbon savings of approximately 92% (against current emissions).

The primary source of heating for government offices in Whitehall is the Whitehall District Heating System, which is operated by the Government Property Agency (GPA). GPA has ongoing plans to reduce carbon emissions from and decarbonise the district heating system.

• In 2021/22FY, a pipework lagging project was completed to reduce heat losses and provide carbon savings.

• In 2022/23FY, it is planned to start a project to lower the operating temperature of the system from 145^oC to 95^oC.

• Forecast reductions in Carbon from the completion of both projects is approximately 17%.

• GPA has plans from 2025 to consider a decarbonisation of the Whitehall Boiler System that feeds the district heating system.

Other government office projects are ongoing in and around Whitehall to reduce energy consumption and carbon emissions through upgrades to LED lighting and HVAC (heating, ventilation and air conditioning) systems.

The noble Lord is correct about the target that we have set. I mentioned the boiler upgrade scheme starting next year. We also have changes to the building regulations, as referred to in earlier questions, which will kick in in 2025, making it virtually impossible to install fossil-fuel heating systems. That will produce a large increase in heat pump installations, as will the other schemes that we have talked about; low-carbon heating can be installed under all of them.