FAQs: Subsidy Control

All public authorities are subject to the new rules. Given our role as a funder of culture and creativity in England, we need to have systems and checks in place to make sure our awards aren’t having any negative effects on UK trade and competition.

Arts Council England has a dedicate team for Subsidy Control Compliance, who can be contacted at subsidy.control@artscouncil.org.uk

Outside of our own investment and responsibilities as a public authority, we cannot offer advice on individual subsidy matters. You should raise any queries with the public authority offering you financial support.

The Department for Business and Trade (DBT) has published guidance for public authorities on Subsidy Control.

DBT have also published guidance for beneficiaries of subsidies.

The Subsidy Control Act has a very specific definition for ‘subsidy.’

To meet this definition, the financial assistance must meet 4 criteria, referred to as ‘the 4 limbs’. The limbs, as defined in the Subsidy Control Statutory guidance, are: 

Limb A - is given, directly/ indirectly, from public resources by a public authority

Limb B -  confers an economic advantage on one or more enterprises

Limb C - is specific, that is, is such that it benefits one or more enterprises over one or more other enterprises with respect to the production of goods or the provision of services  

Limb D - has, or is capable of having, an effect on:

• competition or investment within the UK; or
• trade between the UK and a country or territory outside the UK; or
• investment as between the UK and a country or territory outside the UK.

It is the responsibility of Arts Council England to check any awards against the four limbs (A – D). This is referred to as the four limb test. Awards must meet all four limbs to be classed as a subsidy.

If you’re not sure if a previous award was classed as a subsidy, please contact subsidy.control@artscouncil.org.uk who can advise. There may be also be information in your funding agreement or conditions.

It is Arts Council England’s responsibility to comply with the rules, though we may ask applicants or grant recipients to help us during the process.

You will need to complete a declaration as part of the application form to our open funding programmes. This declaration confirms that the information provided within your application is true and correct at the point of completion and that you agree to Arts Council England using this information to undertake any Subsidy Control compliance work.

The rules apply to all organisations and entities who benefit from an award. We anticipate that the lead applicant will complete the documentation on behalf of themselves and the other consortium members.

We may consider the individual partners involved and their role, but the main focus is on the proposed grant and how it will be used.

Arts Council England will undertake the relevant assessment work, utilising the information within your application. We may be in touch to request further information, and ask for your co-operation in supporting this process.

If your grant is awarded, additional conditions will be added to your funding agreement.

If you award is classed as a subsidy and is for over £100,000 it must be published on the Transparency Database within three months of award. This database is managed and operated by Department for Business and Trade (DBT).

DBT have also published guidance for beneficiaries of subsidies.

Where an award is considered to be a subsidy, Arts Council England may need to publish it on a dedicated database. The database informs potential competitors about awards that have been made by public authorities.

All subsidy awards of £100,000 and over must be published on the Transparency Database within three months of award. This database is managed and operated by Department for Business and Trade (DBT).

If you have an award that needs to be published, along with some other details the database will publish the following information:

• Your organisation’s name
• The value of the subsidy
• The date you received the award
• The award’s start and end date

Following publication, interested parties have three months to submit a challenge (noting that this may be extended if questions are raised). The time limit for challenging a Subsidy does not begin until the award is uploaded and publicly available on the database. 

A challenge can be made by an interested party to the Competition Appeal Tribunal (CAT). An interested party is anyone whose (financial) interests may be affected by a Subsidy. Challenges must be made within three months of a Subsidy being uploaded to the database.

The CAT and challengers can also request further information about the Subsidy (this request is separate from a Freedom of Information Act 2000 request). An interested party must send an ‘application for review’ to the CAT. If this occurs it could mean the three month window for challenge is extended.

The CAT will only review whether a Subsidy decision was lawful, not its merits or effectiveness. The CAT may exercise the same legal powers as the  general courts as well as ordering recovery of all or part of a non-compliant Subsidy.

The CMA is an independent non-ministerial department that is charged with regulating competition in the UK. Part of this remit includes preventing and reducing anti-competitive activities.

The SAU has been established within the CMA. The role of the SAU is to prepare and publish non-binding advice which evaluates public authorities’ compliance assessments for “Subsidies of Particular Interest (SoPI).

Such an award will be classed as a SoPI and will need to be referred to the CMA’s SAU.  The SAU will review the project and after review issue a report, which shall be in the public domain. These steps must be taken before the award is provided.

This process can take up to a minimum of 35 working days and may cause delays to our published turnaround times for decisions.

You should factor this into your project timeline and planning. 

In the event your grant is submitted to the CMA, you may be asked to provide additional information and your award of public funding may be subject to additional conditions.

Arts Council England has a mandatory duty to refer any “Subsidies of Particular Interest” (SoPI) to the CMA’s SAU before the financial assistance is legally committed.

SoPIs are defined within the Subsidy Control (Subsidies and Schemes of Interest or Particular Interest) Regulations 2022.  The following awards will be classed as SoPIs:

• Subsidy awards of £10m or above
• Subsidy awards of £5m or above to sensitive sector
• Subsidy awards for relocation activities of £1m or above
• Subsidy awards for rescue and restructuring activities of £1m or above
• In addition, any award of £1m or above will be a SoPI if it means the Subsidy awarded to the same enterprise for the same activity in the current and two previous financial years then exceeds £10m, or exceeds £5m for a sensitive sector.