Two years on from the Subsidy Control Act (the “Act”) coming into force, the Department for Business and Trade (DBT) is consulting on potential refinements to the UK subsidy control regime and is inviting views from businesses and public authorities (or any parties interested in subsidy control).
If your business operates in a heavily subsidised sector, or you are a public authority that regularly grants subsidies, this is an excellent opportunity to share your insights into how the UK’s subsidy control regime is working or could be improved.
The consultation
The consultation focusses on two specific areas:
- the referral thresholds used to determine which subsidies should/must be referred to the CMA; and
- the streamlined routes, which are intended to provide routes for public authorities to deliver certain subsidies more quickly and easily.
Referral thresholds
The CMA’s Subsidy Advice Unit’s role in the regime is to provide advice to public authorities on how they have applied certain substantive requirements of the Act to the subsidies they deliver.
Referral through this process is determined by voluntary and mandatory referral thresholds, which are based on the value of the subsidy (with different rules for “sensitive sectors”).
DBT is asking respondents to comment on whether the thresholds are set at the right level and whether any sectors should be removed from or added to the list of sensitive sectors.
Would you prefer the CMA to have a more significant role in advising on a wider-range of subsidies or is the regime already catching too many subsidies?
Streamlined routes
Today, there are three streamlined routes dealing with subsidies in the following areas: i) research, development and innovation; ii) energy usage; and iii) local growth.
These routes allow public authorities to give certain subsidies without needing to assess the subsidy against substantive provisions of the Act, provided they comply with specified conditions, which should make it easier for public authorities to deliver low risk and high frequency subsidies that are consistent with the Government’s priorities. But is that happening?
Have you tried to use a streamlined route and have comments on how this process could be improved? Do you have thoughts on other areas which should be, but are not today, covered by streamlined routes? In particular DBT is seeking views on streamlined routes for community regeneration and arts and culture. Do you have views as to what these routes may need to cover?
Overall assessment of the subsidy control regime
DBT is also inviting views on how, generally, the referral regime is working. This would be the ideal opportunity to share your insights on, for example:
- Whether, in your view, the regime is operating as intended and, if not, why not?
- The effectiveness of the Subsidy Control Transparency Database.
- The Subsidy Advice Unit referral process and reporting outcomes.
The deadline for responding is 21 January 2025.
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