When the Prime Minister stood at COP29 last year to announce the UK’s target of reducing emissions by 81% by 2035, the public sector was placed firmly at the forefront of delivery.

With an estate that accounts for around 10% of the UK’s building emissions and direct influence across housing, education, healthcare and local infrastructure, the public sector has a pivotal role to play says Karen Carter, director of national delivery at national procurement specialist Pagabo.

Yet according to Pagabo’s latest whitepaper, Driving Decarbonisation in the Public Sector, just one in four public sector stakeholders believe this ambitious target can be achieved in the current timeframe. More than a third say the emissions target is only possible with a revised timescale, while more than a quarter do not believe it is achievable at all.

This is not a case of apathy – most organisations now have strategies or action plans in place, and 54% feel they made meaningful progress in 2024/25. But the survey findings highlight the biggest barrier of all is funding.

Crucially, it is not only about the amount of money available. While a vital point, the accessibility, fairness of distribution and unrealistic delivery windows are all adding extra barriers preventing the sector from turning ambition into meaningful results.

Fragmented funding, fragmented progress

Pagabo’s research shows that 80% of public sector professionals view lack of funding as the number one challenge to decarbonisation, followed by competing priorities (71%) and the complexity of existing estates (64%).

But drill into the detail and the problem is less about absolute funding levels and more about how money flows through the system. Short application windows, heavy administrative requirements and competitive bidding processes favour the organisations with greater in-house resources, leaving smaller authorities and stretched NHS trusts struggling to access support.

Of those that have applied for funding in the past, 69% reported encountering challenges – whether from insufficient awards, unsuccessful bids or project scopes that did not meet criteria. Almost half of respondents said they were unclear on what options are even available to them.

This fragmented approach is undermining long-term planning. Too often, local authorities and other public bodies are forced into short-term, stop-start projects dictated by funding cycles, rather than strategic investment programmes that would drive down emissions and deliver efficiencies across estates.

The delivery window problem

Even when funding is secured, the window for spending is frequently unrealistic. A year-long timeframe may suit small-scale projects, but it is completely mismatched to the complexity of large capital programmes, especially where procurement and supply chain capacity are already stretched.

Respondents to Pagabo’s survey repeatedly raised this concern. Councils noted that 12-month deadlines do not reflect procurement timescales for major projects, while NHS bodies said that holiday periods make it impossible to deliver works such as heating system replacements within the necessary timeframe.

This is where the funding challenge becomes inseparable from procurement. Without structured, flexible routes to market, organisations are left racing to secure contractors, manage compliance and deliver against deadlines that don’t align with the realities of construction or retrofit.

From finance to frameworks: procurement as the enabler

If the current debate focuses on funding shortages, the sector risks missing a bigger opportunity. Funding may set the pace, but procurement determines whether money is spent effectively and efficiently.

Pagabo’s report highlights that three-quarters of public sector professionals believe cost still outweighs sustainability in procurement decisions ‘most’ or ‘all of the time’. In practice, this means decarbonisation ambitions are too often sidelined once tenders are issued – stagnating any possible progress towards their own and national net zero targets.

The answer lies in procurement models that are designed to embed sustainability and social value at the outset. Frameworks that connect buyers with pre-approved specialist suppliers can accelerate delivery, reduce costs through aggregation and, crucially, give contracting authorities the confidence to plan strategically rather than reactively.

By engaging contractors and consultants early through market engagement and flexible frameworks, organisations can shape deliverable projects that align with funding requirements rather than being constrained by them. This reduces wasted bids, minimises delays and ensures scarce funding delivers maximum impact.

Moving beyond the “easy wins”

The survey data also shows that most public sector organisations have already delivered the most straightforward measures, such as energy-saving lighting (73%) and solar panels (63%). The next steps – fabric improvements, heat pump installation and new energy systems – are more significant, complex and costly works.

To move beyond these easy wins, authorities need procurement processes that allow for collaboration, innovation and scale. Aggregated procurement models can enable councils, NHS trusts and educational institutions to pool demand, secure better pricing and strengthen supply chains.

Equally, frameworks that bring in specialist expertise can help organisations navigate complex retrofit challenges – from heritage buildings to technical grid connections – in a way that one-off tenders rarely achieve.

Aligning policy, funding and delivery

Another striking finding from Pagabo’s research is that 84% of respondents feel government decisions have a medium to high impact on their organisation’s approach, yet 54% believe the government is not doing enough to deliver on net zero commitments.

Part of this disconnect stems from mixed policy signals. While net zero remains a headline ambition, parallel priorities around housebuilding, defence and infrastructure risk diluting focus. At a local level, councils are left juggling statutory responsibilities and emergency funding pressures, with sustainability pushed down the list.

To bridge this gap, funding mechanisms need to be longer-term, consistent and better aligned with procurement cycles. That means multi-year, ring-fenced programmes that enable authorities to plan and invest, rather than scramble for short-term pots. It also means clearer communication on eligibility and guidance, so that resources spent preparing bids are not wasted.

Procurement is the strategic enabler to move from rhetoric to results

The message from Pagabo’s research is clear – ambition is not in short supply, but action is stalling. Fragmented funding, unrealistic delivery windows and cost-driven procurement models are locking the public sector into cycles of incremental progress rather than transformational change.

Reframing procurement as a strategic enabler – not just an administrative process – is essential. With frameworks designed to embed sustainability, unlock scale and bring in expert suppliers early, public bodies can make limited funding stretch further, while accelerating the pace of delivery.

The 2035 target may feel out of reach to many today, but the solution is not simply to call for bigger funding pots – it is to ensure that the funding already available is accessible, realistic and supported by procurement pathways that turn money into measurable decarbonisation outcomes.

For further information about Pagabo, visit www.pagabo.co.uk