With ESOS Phase 4 now underway, many public-sector organisations are asking the same question:
“Does this apply to us?”
It’s a fair question because the answer isn’t always straightforward. While most public bodies are exempt, a growing number of public-adjacent or semi-commercial organisations do fall within ESOS, depending on how they operate.
Who ESOS Applies To
The Energy Savings Opportunity Scheme (ESOS) applies to large UK undertakings and their corporate groups. An organisation qualifies if, on the relevant date, it meets either of the following:
- 250 or more employees, or
- Annual turnover greater than £44 million and balance sheet total greater than £38 million.
However, ESOS was never designed for government departments or wholly public authorities.
Instead, it focuses on organisations engaged in “economic activity”, meaning those that buy or sell goods or services, regardless of whether they’re for profit.
This distinction between public body and economic undertaking is where many organisations fall into the grey area.
Public Bodies Generally Excluded from ESOS
Most public-sector organisations are not required to participate in ESOS because they are classed as contracting authorities under the Public Contracts Regulations 2015. These include:
- Central government departments
- Local authorities acting purely as public bodies
- Non-departmental public bodies (NDPBs)
- Executive agencies and arm’s-length government organisations
Instead of ESOS, these bodies report under other frameworks such as:
- The Greening Government Commitments (GGC)
- The Streamlined Energy and Carbon Reporting (SECR) scheme, where applicable
Public or Semi-Public Organisations That May Fall Within Scope
While purely public authorities are excluded, many organisations operating in the public sphere still meet ESOS criteria because they trade commercially.
These are typically bodies that:
- Operate independently of direct government control
- Generate income through services, retail, or contracts
- Employ over 250 people or exceed the financial thresholds
Examples include:
- Universities and colleges that operate as independent corporate entities
- NHS Trusts and healthcare estates that manage their own budgets and services
- Housing associations and social landlords
- Local authority trading companies (property, waste, leisure or housing arms)
- Cultural and heritage trusts, including city or regional museum trusts
- Publicly owned service companies in sectors such as transport or utilities
In these cases, even though the organisation has a public service purpose, it may still count as an “undertaking engaged in economic activity” and therefore fall within ESOS if it meets the size or financial criteria.
Museums — A Good Example of the Divide
Museums illustrate the split well. Regional or local museums may fall in scope if they operate as charitable trusts or not-for-profit companies that trade commercially, for example, through ticketing, events, or retail. If they exceed the thresholds, they must comply with ESOS just like private-sector organisations.
What About Multi-Academy Trusts (MATs)?
Multi-Academy Trusts (MATs) are another area where ESOS eligibility depends on structure. Most MATs are established as not-for-profit charitable companies and receive the majority of their funding from the Department for Education. In these cases, they are treated as public bodies and are therefore exempt from ESOS, as they are covered by government sustainability frameworks instead.
However, some larger or more commercially active MATs may operate trading subsidiaries (for example, letting facilities, providing services, or managing estates commercially). If those entities meet the ESOS size thresholds and are not classified as contracting authorities, they may fall within scope of ESOS.
As with universities, the key question is whether the trust or any part of its structure is engaged in economic activity beyond core public education. If so and it meets the employee or turnover thresholds compliance may be required.
What’s Changed for Those That Do Qualify
For the public or semi-public organisations that are in scope, ESOS Phase 4 brings significant change.
Previously, many may have relied on Display Energy Certificates (DECs) to demonstrate compliance, particularly those already required to hold DECs under the Energy Performance of Buildings Regulations.
From Phase 4 onwards, this option is no longer available. DECs and Green Deal Assessments have been removed as valid compliance routes, meaning every qualifying site must now be covered by either:
- A full ESOS compliant on-site energy audit, or
- An ISO 50001-certified energy management system
This change increases the number of buildings across the UK that now need formal ESOS on-site energy audits, particularly for large estates such as universities, NHS Trusts, housing associations, and local authority companies.
In Summary
| Type of Organisation | ESOS Requirement | Notes |
| Central government departments | ❌ Exempt | Covered under Greening Government Commitments |
| Local authorities (core operations) | ❌ Exempt | Contracting authorities under Public Contracts Regulations |
| Non-departmental public bodies (e.g. Natural History Museum, British Museum) | ❌ Exempt | Report via departmental frameworks |
| Universities & colleges | Likely in scope | Independent corporate entities |
| NHS Trusts & healthcare estates | Likely in scope | Commercially active, large undertakings |
| Housing associations & social landlords | In scope | Meet size and financial thresholds |
| Local authority trading companies | In scope | Operate commercially |
| Museum or cultural trusts | In scope if trading | Exempt if directly operated by public body |
Key Takeaway
While most pure public bodies are exempt from ESOS, many semi-public, independent or commercially active organisations are not. If your organisation operates independently, generates income, or manages its own energy use, it’s worth checking your status early in ESOS Phase 4.
At Earth Hub we’re already supporting clients through ESOS Phase 4, including public-sector organisations now adjusting to these new requirements.
For large estates, early planning is absolutely key. It allows time for structured site visits, accurate data collection, and meaningful recommendations that go beyond compliance and deliver measurable energy savings.
If you’d like to understand how these changes affect your organisation or how we can help you plan your audits early just drop us a message.