Government launches subsidy control consultation on increasing thresholds, introducing new streamlined routes

The Department for Business and Trade is to consult on refinements to the UK subsidy control regime.

The refinements involve:

• changing the thresholds for referral of subsidies to the Competition and Markets Authority (CMA); and
• creating new streamlined routes for public authorities to use to deliver subsidies more quickly and easily in specific circumstances

On the thresholds, the consultation paper says: “Since the [Subsidy Control Act 2022] entered into force in January 2023, a greater number of subsidies or subsidy schemes have been referred to the CMA under the mandatory referral threshold (SSoPI) than was anticipated, however no subsidies of interest have yet been voluntarily referred. High inflation in recent years has led to increased project costs, which may have contributed to the mandatory referral threshold capturing more subsidies and schemes than originally intended.

“We are seeking views on whether the current thresholds for mandatory referral are appropriate, to ensure the subsidy control regime is working effectively.”

The 2022 Act allows ministers to create streamlined routes, of which there are currently three. They cover: research, development and innovation; energy usage; and local growth.

The consultation paper says: “One of the benefits of streamlined routes is that they promote confidence and enhanced legal certainty to public authorities and businesses undertaking projects that are high-frequency and low risk and aligned to UK priorities…..

“The power to create new streamlined routes was built into the Act, and this may present an opportunity to help public authorities navigate the regime more effectively. New streamlined routes would support public authorities by expediting ‘everyday’ subsidies in low-risk areas, allowing resources to be focused on principles assessments for higher risk, more distortive subsidies.

“Initial scoping work, including with other departments, has identified several potentially viable options, including ‘community regeneration’ and ‘arts and culture’. The government would welcome views on those 2 potential areas, as well as any other areas which could be suitable for a streamlined route.”

The consultation closes on 21 January 2025.