Funding environmental improvements to your GP premises

With the NHS committed to net zero targets, GP practices are increasingly expected to play their part in reducing the environmental impact of primary care. Primary care contributes materially to the NHS’s carbon footprint, with many premises requiring significant modernisation and energy-efficiency improvements. Many practices are now considering premises improvements such as solar panels, heat pumps, LED lighting, and better insulation. However, before committing to any project, it is essential to understand the funding landscape and, in particular, the limitations of NHS premises funding for environmental works.

Premises Costs Directions: an important constraint

The NHS (General Medical Services – Premises Costs) Directions 2024 set out the framework under which NHS England may provide capital grants for improvements to GP surgery premises. Under the 2024 Directions, premises improvement grants cannot ordinarily be used to fund projects designed solely to reduce environmental impact. The Directions expressly exclude "improvements designed solely to reduce the environmental impact of premises, such as the installation of solar energy systems or replacement windows, doors or facades".

Under the 2024 Directions, a limited exception may permit environmental improvement grants where the GP contractor can demonstrate a net financial benefit to the wider health service, and not merely to the practice itself. However, this threshold is high. Practices should not assume that a straightforward business case for lower energy bills at the surgery will be sufficient; the benefit must be shown to extend to the wider health service.

In addition, whilst ICBs are increasingly expected to consider sustainability in capital investment decisions, and applications for premises improvement funding may be strengthened by including energy efficiency measures, standalone environmental projects remain difficult to fund through this route. Where energy efficiency measures form an integral part of a wider project that otherwise qualifies for grant funding, the funding position may differ. Practices should discuss the proposed scope and apportionment of costs with their ICB to explore their funding options.

Green finance and commercial lending

Given the limitations of the Premises Costs Directions, practices looking to invest in environmental and energy efficiency improvements should explore a range of alternative funding mechanisms.

A growing number of commercial lenders now offer green loans or sustainability-linked finance products. These products may offer competitive interest rates and can be a practical route for practices that wish to proceed without waiting for grant funding.

Government schemes

The Boiler Upgrade Scheme currently offers grants of up to £7,500 to replace fossil fuel heating systems with greener alternatives such as heat pumps. The scheme is available to small and medium non-domestic buildings in England and Wales, including eligible GP practices. Whilst uptake amongst GP practices has reportedly been low, the scheme remains open and is worth investigating for practices considering a move away from gas or oil heating.

Possible future investment

Significant investment has been directed towards energy efficiency across the NHS estate, including through the Government's Public Sector Decarbonisation Scheme, for projects including heat pumps, solar panels and building management systems.

The RCGP is calling on the Government to extend investment to GP practices, arguing that this would provide a practical and cost-effective route to future-proofing the GP estate.

Greener Practice and sector resources

Organisations such as Greener Practice offer a national hub of information and resources on sustainability in general practice, including guidance on measuring and reducing carbon emissions. The Green Impact for Health toolkit provides a wide range of practical actions for practices seeking to improve their environmental sustainability, delivered in partnership with the RCGP and SOS-UK.

Practical steps before you begin

In summary, for GP practices considering environmental improvements to their premises:

Do not assume NHS premises grants will cover environmental works. While the 2024 Directions open a narrow exception, the default position remains that standalone environmental projects are excluded from improvement grant funding. Engage early with your local ICB.
Investigate the Boiler Upgrade Scheme. Grants of up to £7,500 may be available to fund the replacement of fossil fuel heating systems for eligible practices.
Explore commercial green finance early. Green loans and sustainability-linked products from commercial lenders may offer a more straightforward route, particularly for solar installations or heat pump retrofits, and can be a practical alternative to grant funding.
Check your EPC rating. Understanding your building's current energy performance should be an early priority, as you may be required to provide an EPC as part of many available funding applications. Commercial lenders are also increasingly requiring sight of an EPC. If your current certificate is out of date or does not reflect recent energy improvement works, you may need to arrange a fresh assessment.
Make sure your property title is up-to-date. Many funders will require that the property title reflects the current partnership arrangements. If you are a tenant, check that you have a sufficient unexpired term remaining on your lease, as funders may require a minimum period. Tenants should also check whether their landlord's consent to the works is required.
Seek specialist advice. We strongly recommend taking specialist legal and financial advice before committing to any project, to ensure that your funding arrangements are sound and that any grant conditions are properly understood.

Get in touch

If you are considering environmental or energy efficiency improvements to your surgery premises, our commercial property team can advise on the property and funding aspects of your project including NHS premises grant applications, commercial green finance arrangements, lease considerations, and any restrictions or conditions that may need to be registered against your property title.