This article provides an overview of the requirement for public authorities to refer subsidies and schemes of particular interest to the Competition and Markets Authority. Where a referral is mandatory, a subsidy cannot be given before the process has been completed, which makes it one of the more important changes brought in by the Subsidy Control Act 2022.

When are subsidies referred to the Competition and Markets Authority (CMA)?

Under Section 52(1) of the Act, public authorities must request a report on a “subsidy, or subsidy scheme, of particular interest” (SoPI) from the CMA. The Subsidy Control (Subsidies and Schemes of Interest or Particular Interest) Regulations 2022 specify that subsidies granted outside of sensitive sectors are SoPI if they are over £10 million. Subsidies granted in sensitive sectors will be SoPI if they are over £5 million.

Under Section 56 of the Act, a public authority may request a report from the CMA on a “subsidy, or subsidy scheme, of interest” (SoI). Subsidies between £5 million and £10 million which do not meet the SoPI critera are SoI.

The thresholds apply to subsidies exceeding £1 million where the total amount of the subsidy and any related subsidy to the same enterprise within the financial year, and the two preceding financial years, exceed the applicable threshold.

In addition, the Secretary of State can direct a public authority to request a report from the CMA in relation to any proposed subsidy or subsidy scheme.

What is the Subsidy Advice Unit?

The Subsidy Advice Unit (SAU) is part of the CMA, and is responsible for discharging the CMA’s functions and powers under Part 4 of the Act. It provides advice in respect of SoPIs or SoIs that public authorities refer to it, evaluating their Assessment of Compliance with the requirements of the Act. The SAU’s advice is non-binding, with public authorities retaining responsibility for deciding whether to award a subsidy or make a scheme.

The SAU also monitors and reports on the effectiveness of the operation of the Act, and its impact on competition in the UK.

What are the requirements for referral?

Public authorities should submit requests for a report through the public authority portal providing the following information:

  1. all information to be included in the subsidy database (section 34 of the Act)
  2. if applicable, information specified by the Secretary of State
  3. an explanation of why the criteria for a SoPI or SoI are met (except for directions by the Secretary of State), and
  4. an Assessment of Compliance and any evidence relevant to the assessment.

All documents will need to be in a suitable format, and should be individually numbered and titled. The request should include an index of documents submitted which specifies:

  • document number
  • file name
  • document title
  • purpose of document
  • date produced
  • produced by (if applicable)
  • brief description of its relevance to the assessment (for example as supporting evidence in respect of the evaluation of compliance with subsidy principle [x]).

Public authorities will need to ensure that they have included details of where in the assessment each of the principles are addressed, and details of which evidence documents are the ones relevant to that part of the assessment.


The thresholds for referral to the CMA are low, and are being exceeded surprisingly often. It is therefore important that public authorities remain alert to the obligations under Section 52(1) of the Act. To assist public authorities in preparing a request for a mandatory or voluntary referral to the SAU, the SAU will engage in pre-referral discussions. We recommend engaging in pre-referral discussions to get early feedback, which in turn should increase the chance of the referral being accepted quickly.

Our Subsidy Control Team is happy to support public authorities completing the referral process. Please get in contact with Bethan Lloyd, Sally Stone, Isobel Williams or Edward Reynolds for an initial discussion about how we could do so.

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