Upcoming Changes to the UK’s Subsidy Control Regime

Following responses to its consultation on the UK’s subsidy control regime (which came into force in January 2023), the Government has announced its intention to implement 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. 

As part of the refinements, the Government intends to:

• Increase the financial threshold for non-sensitive Subsidies or Schemes of Particular Interest (SSoPI) requiring mandatory referral to the Competition and Markets Authority (CMA) from £10m to £25m.

This change will no doubt be welcomed by public authorities who have found that the current threshold of £10m for mandatory referral has been exceeded surprisingly often, in particular in respect of large regeneration, infrastructure and housing projects, and even more so where there have been several ‘related’ subsidies given for a particular project, whose value must be cumulated. Once the new threshold is in place, fewer subsidies should be caught by the mandatory referral obligation, lowering the burden on public authorities to refer to and liaise with the CMA on subsidies with a value of between £10m and £25m. 

This change is expected to come into force on 4 August 2025. 

• Introduce 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, and we assume this will be the case for the two new routes. The 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.

The new streamlined routes are expected to become available later this year however, at the time of writing, the Government is yet to set an exact date for their introduction, which will no doubt create some uncertainty over the coming months. 

• Refine the information which is required to be published on the subsidy database in relation to subsidy awards under a subsidy scheme. 

At present, public authorities awarding a subsidy under a subsidy scheme are obliged by the requirements of the Subsidy Control (Subsidy Database Information Requirements) Regulations 2022 to duplicate details provided in relation to the scheme on the subsidy database. This change will streamline the administrative burden for public authorities giving subsidies under subsidy schemes. 

This change will come into force on 18 June 2025.

If you would like to discuss the upcoming 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.