Introduction
The Subsidy Control Act 2022 (“Act”) is now in force and brings with it the UK’s reformed subsidy control regime. These new rules replace the rules of EU State aid that were previously applicable when dealing with the award of subsidies in the UK. A major new feature brought in by the Act is the subsidy transparency database. Public authorities are required to publish details of any new subsidy award or subsidy scheme on this database provided that they meet the reporting threshold. There is then a short period of time in which these published subsidy awards and schemes may be challenged.
Subsidy Transparency Database
The Department for Business, Energy and Industrial Strategy (BEIS)s subsidy transparency database is now live and lists a number of new subsidies awarded and schemes created since 4 January 2023 when the Act came into force. The aim of the database is to allow for public scrutiny of subsidies with the intention that this will inform better subsidy design in future. The UK Government views subsidy transparency as a key aspect of the new subsidy control regime because it allows competitors, other public authorities and the general public to view and challenge subsidies that have been awarded.
Any awarded subsidy that has a value of over £100,000 must be entered into the subsidy transparency database, usually within three months of the award.
Information on ‘legacy’ subsidy awards and schemes (those created before 4 January 2023) is also required to be published providing a more complete picture of the current and developing subsidy landscape in the UK. Public authorities must upload the detail of every subsidy scheme they make, unless an exemption in Part 3 of the Act applies.
It is important to note that subsidies that are otherwise exempt from compliance with the subsidy control regime may still need to be published on the transparency database. For example, subsidies that are in the public economic interest but below a certain value and those that are awarded to a single enterprise totalling less than £315,000 over a period of three years are considered minimal financial assistance and are exempt from the majority of the subsidy control requirements. However, these awards are still required to be published on the subsidy transparency database where they have a value of £100,000 or more.
A list of subsidies awarded under the new regime as of 30 January 2023 can be found here. A list of subsidy schemes created under the new regime can be found here. All subsidies awarded since 1 January 2021, which includes ‘legacy’ subsidies can be searched here.
Transparency Database Information Requirements
Information must be uploaded to the database in respect of any subsidy scheme, and separately, any individual subsidy award given under any subsidy scheme, provided they meet the reporting thresholds outlined above.
The key details required to be uploaded to the database include:
- Subsidy name,
- Name of awarding public authority,
- The budget for the scheme and maximum eligible amounts,
- The form the subsidy may take under the scheme e.g., grants, subsidised loans or equity,
- The sector(s) for which the subsidy scheme is available,
- A description of the subsidy scheme including terms and conditions of eligibility, time limits and the basis for calculating the subsidy,
- The legal basis for any subsidy scheme,
- Policy objectives and purpose of the subsidy.
Full details of the information that is required to be published are set out in The Subsidy Control (Subsidy Database Information Requirements) Regulations 2022.
Challenges to awards and schemes
Review of the published awards and schemes is central to the new regime. Previously under EU state aid law, subsidies were reviewed before they were awarded. Now the onus is on a competitor that believes that they will be negatively affected by the subsidy award to raise an appeal against that award.
Section 70 of the Act deals with how a decision to grant a subsidy may be appealed. An interested party can challenge a subsidy decision by appealing to the Competition Appeal Tribunal (“CAT”) to review that decision. Parties that wish to challenge an award or scheme must submit a notice of appeal to the CAT within 30 days of details of the decision to make the award becoming public. An appeal to the CAT in this context is in effect an application to judicially review the decision to award the subsidy. The tribunal will apply the principles of judicial review when considering the appeal.
The Act also allows an interested party to make an information request to a public authority about a subsidy or subsidy scheme that they have awarded or created. This power can be used by parties to gather information ahead of a potential challenge.
Conclusion
The new regime is now in force and public authorities need to be aware of the requirement to upload information in respect of any subsidy scheme created or individual subsidy awarded within a 3-month period. Similarly, businesses should be aware of the tight timescale of only 30 days to bring forward a challenge to any publicised subsidy award or scheme. We will continue to monitor any challenges brought under the Subsidy Control Act and provide updates on trends that arise over the coming months.
We provide a rundown of the other major features of the new UK Subsidy Control regime here.