Guidance

Roles of the Department for Business and Trade and the Subsidy Advice Unit in the UK subsidy control regime

Published 15 February 2023

This content describes the respective roles between the Subsidy Control teams in the Department for Business and Trade (DBT) and the devolved governments (DGs) and the Competition and Markets Authority’s Subsidy Advice Unit (SAU) under the Subsidy Control Act 2022 (the Act).

Role of DBT

DBT is the UK-wide policy owner for subsidy control. It is responsible for the overall functioning of the regime, including providing guidance on compliance with the UK’s international obligations including the Northern Ireland Protocol working with the other relevant UK government departments, providing guidance to public authorities on subsidy control policy including the role and functions of the SAU, and for realising the benefits of the regime through ongoing monitoring and evaluation as it considers appropriate. It is also responsible for the statutory guidance on the practical application of the regime.

DBT will provide case-specific guidance and support to public authorities on designing subsidies in compliance with the Act and the UK’s international obligations. This may include guidance on whether the specific measure constitutes a subsidy, on whether the EU State aid rules apply (because of the NI Protocol), on the design of a proposed subsidy or scheme, or on the methodology for public authorities to assess their subsidies or schemes.

DBT will not provide support to public authorities within the devolved governments’ (DGs’) jurisdiction (for example, agencies of the devolved administrations (DAs), local authorities in Scotland, Wales, and Northern Ireland) except as discussed with the relevant DA’s subsidy control team.

DBT will also liaise with the DAs subsidy control teams, who perform a similar support role in respect of subsidies given within their own jurisdiction. DBT will continue to have regular discussions with the DAs on UK subsidy control matters and will provide guidance on specific subsidies, as it does with other public authorities.

It is not compulsory for public authorities to seek case-specific guidance from DBT and the format and depth of any case-specific guidance provided will be at DBT’s discretion. Responsibility for compliance with the Act remains with the public authority giving a subsidy or making a scheme. Public Authorities are also not obliged to follow the case-specific support and guidance provided by DBT, and they are encouraged to seek their own legal advice if unsure about the lawfulness of a proposed subsidy or scheme.

Role of the Subsidy Advice Unit (SAU)

The SAU will assist public authorities by providing independent non-binding reports in respect of certain subsidies or subsidy schemes referred to it, evaluating their assessment of compliance with the requirements of the Act. It may also provide advice about how the assessment might be improved and/or how the proposed subsidy or scheme may be modified to ensure compliance with the regime. The SAU will publish its report on its website and provide a copy to the relevant public authority and the Secretary of State after its publication.

In practice, referrals to the SAU should be limited to those subsidies and schemes which are potentially the most harmful or distortive to competition and investment in the UK, and international trade and investment. Public authorities are required to refer subsidies or schemes of particular interest, as defined in secondary legislation, or subsidies called-in by the Secretary of State (mandatory referral). The SAU also has discretion to provide such advice in relation to any subsidies or schemes of interest (defined in secondary legislation) which are referred to it on a voluntary basis (voluntary referral). The Secretary of State also has the power to refer a subsidy or scheme to the SAU post-award in certain circumstances.

The SAU is not responsible for ‘approving’ the giving of subsidies but, rather, supports public authorities’ decision making regarding the design and assessment of subsidies to help ensure that they are based on a strong assessment of their compliance with the requirements of the Act. It will not give advice on a subsidy or subsidy scheme as it is being designed (although the SAU’s report may include advice about how the design of a proposed subsidy or subsidy scheme may be modified to comply with the requirements of the Act).

The SAU will also monitor and periodically report on the effectiveness of the operation of the subsidy control regime and its impact on competition and investment within the UK. The first monitoring report will be due three years after commencement of the regime (as soon as practicable after 31 March 2026). The SAU will have information-gathering powers in support of this function. The SAU has discretion to define the contents of the monitoring reports and publish them in a manner that it considers appropriate.

Table of responsibilities

The following table sets out key information regarding each institution’s respective role under the subsidy control regime.

	DBT’s role	SAU’s role
Which subsidies or schemes are supported?	Any subsidy or subsidy scheme, where they are approached by the relevant public authority* (as appropriate).	Only subsidies or schemes which are referred on a mandatory basis (SSoPIs / called-in by the SoS) or voluntary basis (SSoIs), meet the requirements of the Act and, in the case of SSoIs, are accepted following the application of the SAU’s prioritisation principles.
When can public authorities seek support?	At any stage throughout the process of creating a subsidy or subsidy scheme (ideally as early possible, and in particular before approaching the SAU).	The SAU strongly encourages public authorities to engage in pre-referral discussions prior to referral of a subsidy. Pre-referral discussions should take place when a public authority (preferably after consulting the DBT/DA case work team) is confident that the assessment of compliance with the subsidy control principles is sufficiently developed and is making preparations to refer the SSoPI to the SAU. In pre-referral discussions, the SAU will aim to assist the public authority in preparing its referral. This will include supporting the PA to identify the information that should be submitted when the subsidy or scheme is formally referred and may also cover the SAU’s processes. The SAU will not advise on whether the subsidy meets the criteria for a subsidy (including SSoPI/SSoI thresholds). Nor will the SAU advise public authorities on the design of a subsidy or how to complete an assessment of compliance.
Nature of the support given?	Iterative support throughout the process of designing and creating a subsidy (as appropriate).	A published report evaluating the public authority’s assessment of the subsidy or subsidy scheme against the subsidy control requirements in the Act, and, at the SAU’s discretion, advice on how the assessment may be improved and how the design of the subsidy may be modified to ensure compliance with the requirements.
Scope of the support?	Guidance may cover all aspects of subsidy control, including whether the measure is a subsidy, subsidy design, assessment against the subsidy control requirements, and complying with the UK’s international obligations. The support given will be proportionate to the subsidy under consideration.	SAU’s reports will be limited to an evaluation of the public authority’s assessment of a subsidy or subsidy scheme against the subsidy control requirements. The report may also include advice on how the assessment may be improved and how a subsidy or subsidy scheme may be improved or modified to ensure compliance with the requirements. The SAU’s reports will not consider whether the proposed measure can be classified as a subsidy.
Are there any time constraints?	No formal time constraints.	Yes. Referrals must adhere to the time limits in the Subsidy Control Act 2022 (usually 30 working days)
Will a report be published in relation to the support being given to public authorities?	No.	The advisory report will be published on the SAU’s website.

*This applies to public authorities in England and with UK-wide/reserved responsibilities. DBT will not provide support to public authorities within the devolved governments’ (DGs’) jurisdiction (for example, agencies of the DGs, local authorities in Scotland, Wales and Northern Ireland) except as discussed with the relevant DG’s subsidy control team. DG roles broadly follow those set out for DBT with respect to offering support to public authorities within their jurisdictions.