On 11 November, the UK Government published their finalised guidance explaining public authorities’ legal obligations under the new UK subsidy control regime. The Subsidy Control Act 2022 will come into full force and effect on 4 January 2023 and implement the UK’s reformed subsidy control regime. These new rules are intended to replace EU State aid laws following Brexit.
The published guidance provides further clarity on the operation of the new regime and sets out a framework for designing and giving subsidies consistently with the 2022 Act. The guidance is intended to ensure that public money is used in a way that is effective while limiting the negative impact that subsidies can have on competition and other forms of investment.
The publication of the finalised statutory guidance follows on from a statutory consultation undertaken by BEIS in which they sought views on a draft version of the guidance. BEIS have now published their response having reviewed the feedback from the statutory consultation.
Sitting alongside the 2022 Act and also coming into full force and effect on 4 January 2023 is The Subsidy Control (Gross Cash Amount and Gross Cash Equivalent) Regulations 2022. These regulations set out how a public authority must determine the gross cash amount or the gross cash equivalent of a subsidy in line with relevant provisions of the 2022 Act.
In addition to the new guidance the UK Government also published a subsidy control principles assessment template. The 2022 Act will require that public authorities take account of the principles of subsidy control when awarding an individual subsidy or developing a subsidy scheme. The assessment template allows those authorities to compare their subsidy award framework against the general principles to ensure consistency with the 2022 Act.
We will be providing updates on developments in relation to the implementation of the Subsidy Control Act 2022 as we move towards 4 January 2023 and will monitor how the new regime works in practise after it comes into force on that date.