16/06/2025
Following responses to its consultation on the UK’s subsidy control regime (which came into force in January 2023), the Government has announced three changes that will be of use to public authorities when managing subsidies and complying with the requirements of the Subsidy Control Act 2022, alongside related secondary legislation.
1) New, higher threshold for mandatory referral of subsidies and subsidy schemes of particular interest in non-sensitive sectors took effect on 4 August 2025
With effect from 4 August, 2025, the threshold value above which a subsidy of particular interest (SoPI) is subject to the mandatory requirement in section 52 of the Subsidy Control Act 2022 for referral to the Competition and Markets Authority increased from £10 million to £25 million. This threshold relates to the cumulative value of both the subsidy under consideration and any other related subsidies given during the applicable period. An equivalent change has been made for subsidy schemes of particular interest (SSoPI’s).
The threshold for SoPI’s in the following sensitive sectors remains unchanged at £5 million:
- Aluminium production
- Copper production
- Manufacture of motor vehicles
- Building of ships and floating structures
- Manufacture of motorcycles
- Manufacture of air and spacecraft and related machinery
- Production of electricity
This change will no doubt be welcomed by public authorities who have found that the previous threshold of £10 million for mandatory referral was easily exceeded, especially in relation to large regeneration, infrastructure and housing projects, or where a project was benefitting from several related subsidies. Fewer subsidies will now be SoPIs, easing the compliance burden on public authorities when they subsidise projects which are receiving between £10 million and £25 million in public subsidy.
2) Proposed the introduction of two additional streamlined routes, 1) Arts and Culture and 2) Community Regeneration
Streamlined routes are subsidy schemes established by the Government for use by any public authority to enable them to make compliant awards of subsidies, provided the eligibility criteria and conditions of the scheme are met. There are 3 existing streamlined routes, 1) Research, Development and Innovation (subsidy control number: SC10780), 2) Energy Usage (SC10781) and 3) Local Growth (SC10782). The Government has produced guidance to accompany each existing streamlined route.
The Government has announced a proposal to introduce two new streamlined routes for Arts and Culture and for Community Regeneration. Details of the new routes are yet to be published; however, we expect that they will provide a much needed and simpler route to compliance for common subsidies relating to arts, heritage and culture and community projects, somewhat replicating what is covered by the General Block Exemption Regulation (GBER) relating to Culture and Heritage Conservation under the State Aid rules within the EU. What the community regeneration route might cover remains less clear.
No firm indication has been given of the timescale for introduction of the new streamlined routes, which will no doubt create some uncertainty over the coming months.
3) Refined the information which is required to be published on the subsidy database in relation to subsidy awards under a subsidy scheme
Previously, public authorities awarding a subsidy under a subsidy scheme were obliged by the requirements of the Subsidy Control (Subsidy Database Information Requirements) Regulations 2022 to duplicate details already provided in relation to the scheme on the subsidy database. This requirement to duplicate certain scheme information has now been removed, thus streamlining the administrative burden for public authorities when giving subsidies under subsidy schemes.
This change came into force on 18 June 2025.
If you would like to discuss these recent changes or any aspect of subsidy control compliance, our Subsidy Control specialists can assist. Please get in touch with Bethan Lloyd, Helen Feinson, Edward Reynolds or Isobel Williams.
