The Subsidy Control Act (the UK’s domestic equivalent of the EU state aid regime following Brexit) has received Royal Assent.  The operative parts of the Act are expected to be brought into force in Autumn 2022. 

Key points to note are:

  • Public authorities will be responsible for self-assessing subsidies they intend to grant against the seven principles set out in the Act. Guidance will be issued by the Secretary of State.
  • There are transparency requirements relating to the award of subsidies or the making of a subsidy scheme.
  • The Secretary of State will, in secondary legislation, designate certain types of subsidy as “subsidies of interest” or “subsidies of particular interest” (generally large subsidies and/or those in sensitive sectors) and this will impact on how these are dealt with by the regime. A public consultation on this is currently ongoing. The current proposals would see subsidies of particular interest – which would include all subsidies worth more than £10 million – subject to a mandatory referral to the SAU (see below).
  • There are key exemptions for small subsidies of less than £315,000 over a three year period (“minimal financial assistance”) and for services of public economic interest which are entrusted to third parties.
  • A Subsidy Advice Unit (or SAU) will sit within the Competition and Markets Authority, with the functions of monitoring and oversight, and providing non-binding award advice to public bodies and central Government.
  • The Competition Appeal Tribunal will hear appeals by interested parties (or the Secretary of State) against subsidy decisions, applying judicial review principles.

We’ll provide a more detailed FAQ on our resource page in the coming days.