Updated guidance from the Subsidy Advice Unit

Since its inception the Subsidy Control Regime has been continuously evolving under the Subsidy Control Act 2022. The Subsidy Advice Unit (SAU), part of the Competition and Markets Authority (CMA), has been working with stakeholders to navigate the intricacies of the new regime and where possible streamline processes and offer additional guidance.

In doing so, the SAU has now published updated guidance on the subsidy control regime (the Updated Guidance). In this update, the SAU seeks to address common questions and challenges public authorities encounter when making a referral. The aim of the update is to improve efficiencies in time and in the use of resources on the part of the public authorities when making referrals, and the SAU in reviewing them. The guidance should further inform public authorities of how the SAU operates its subsidy control function and should be read in conjunction with the statutory guidance as well as the associated regulation under the Act, all noted at 1.4 in the Updated Guidance.

Earlier in the year our article on the Government’s Consultation response: refining the UK subsidy control regime noted an array of developments under the regime, including the increase in the mandatory referral requirement (in non-sensitive sectors) from £10 million to £25 million.

The changes discussed in the Updated Guidance, and in this article, relate in most part to those larger subsidies which will be reviewed by the SAU before they are granted, and includes reference to those that are referred under voluntary terms. One of the key changes under the 2022 legislation was to impose a self-assessment requirement on public authorities. The SAU holds an advisory role, the SAU will review the proposed subsidy and provide non-binding advice and recommendations to the public authority. The SAU will not make a judgement as to whether financial assistance constitutes a lawful subsidy.

In this article we explore some of the key changes in this new guidance, which can be accessed here: How the Subsidy Advice Unit operates its subsidy control functions.

The guidance is split into 5 chapters covering:

Introduction
Referral procedure
Analytical framework for reports on referral
Monitoring and reporting functions
Prioritisation principles

In short, what has changed?

Acceptance: further information is provided on the acceptance of referrals, setting out what is required for acceptance, checklists for public authorities, and answers to common questions.
Confidential information: the guidance has set out how the SAU intends to handle confidential information and provides clarity to public bodies in identifying confidential information in their submissions.
Pre-referral discussions: the SAU has provided further detail to reflect current practice on format, timescales and expectations for pre-referral discussions.
Interpreting the SAU’s report: explanation is provided on how final evaluations are presented with guidance on what this means and possible next steps.
Analytical framework: the updated chapter provides an additional insight into what the SAU considers in its review.

The guidance sets out the two main functions of the SAU:

The referral function; and
The monitoring function.

The current guidance sets out the referral procedure, indicates timelines and procedural practices that will assist the SAU and the public authorities in order to effectively and efficiently complete the referrals process.

Our article published in April 2025 illustrates the monitoring function in action, and amendments to the current guidance likewise represents the consciousness of the SAU and the CMA to meet its statutory obligations and further update the regime in accordance with the findings of its investigations.

Making a referral

The guidance includes a useful process overview which indicates a 35-day period from Preliminary assessment, through the reporting period, up and to the SAU report being published, plus a cooling-off period of around 5 working days before the subsidy can be made. At the outset, there may be voluntary pre-referral discussions between the SAU and the public authority. During this period the public authority and the SAU can engage in discussion on a draft assessment and or provide a ‘teach-in’ where complex or technical concepts will be needed before a full assessment can be made. Pre-referral discussions do not substitute the need for the public authorities to make their own assessment or taking appropriate further advice. It should be noted that whilst the SAU will not normally make a public statement about pre-referral discussions, during the referral process, there are requirements for a public notice to be published on the SAU webpage. There is specific guidance on what is required, where information may be deemed confidential or an application is exempt.

Public authorities are encouraged to register with the SAU’s Public Authority Portal (PAP), as early as convenient, but no less than one week prior to making a referral. The PAP will provide access to nominated representatives who will be prompted to provide information set out in the Referral Submission Checklist, which can be found on page 12 of the Updated Guidance. The SAU have included a number of checklists and flowcharts in the Updated Guidance to aid public authorities in navigating the referral process, with the intention to make the guidance more accessible and user friendly. The SAU recommend preparing all the requisite information in advance of starting the submission. Public authorities should refer to the Referral Submission Checklist and the Annexures to the Updated Guidance.

The assessment submission should clearly identify each of the Subsidy Control Principles that apply and provide the requisite documentation, in a readable and searchable format, clearly identifying confidential information. The SAU provides a non-exhaustive list of evidence that may be useful in Chapter 3 of the Updated Guidance along with a helpful flow chart on the 4-step framework and Subsidy Control Principles. The SAU recommends that the public authority provides a non-confidential, non-technical, summary, suitably transparent for the uninformed reader. This will accompany the SAU’s report which must be published in short order.

Whilst the guidance has usefully been updated in order to offer public authorities an insight into the operations of the SAU in their functions under the regime, the guidance should be read as indicative and supplementary to the statutory guidance. It is clear from the guidance that the SAU may adopt a different approach than that set out in the Updated Guidance where the SAU deems necessary, to meet its statutory obligations or as it deems appropriate. Of note is that the SAU’s evaluation of the assessment must consider any effects a proposed subsidy would have on competition or investment in the UK. It is for the public authority to decide whether any changes are to be made to the assessment or design of the subsidy. Thereafter, and in the case of mandatory referrals once the cooling off period has concluded, the public authority may lawfully give the subsidy.

Where we come in

We recognise the inherent difficulty in ensuring compliance with the Subsidy Control Act, with frequently changing rules, updated regulation and guidance and sector specific application. We are necessarily equipped to provide legal and sector specific advice, aimed at helping both granters and recipients of potential subsidies. If you require clear and practical advice to reach a commercial or pragmatic solution, we can help. If you have any questions on the topics in this article, or on any aspect of the Subsidy Control Regime, please contact a member of our Subsidy Control Team.

To make a referral to the SAU visit: Find out how to make a referral to the Subsidy Advice Unit

Public authorities wishing to contact the SAU regarding the Updated Guidance or overall operation of the SAU, can contact them by email: sau@cma.gov.uk.

This article was co-authored by Trainee Angus MacVicar.

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