Streamlined routes to subsidy controls

The Subsidy Control Act 2022 (“the Act”) came into force in January 2023, following the UK’s exit from the EU, replacing the interim regime based on the UK-EU Trade and Cooperation Agreement, and the previous EU State Aid regime.  In the three years since, there have been a number of refinements in an effort to hone the legislation so that it works well for those organisations using it, and to evolve so as to address the UK Government’s aims including economic recovery and levelling up.

Third sector bodies will be particularly interested in the latest development resulting from a recent consultation on the Act – the addition of two new streamlined routes in the areas of arts and culture, and community regeneration.  This will bring increased certainty for those bodies awarding subsidies, which may benefit third sector organisations as a result of the UK Government’s intention of allowing ‘[these] subsidies to be awarded quickly, easily and with maximum legal certainty’.

What is a streamlined route?

A streamlined route is a form of subsidy scheme created under the Act which has been pre-assessed as compliant with the subsidy control regime. Opting to use a streamlined route means that a public body awarding a subsidy does not need to assess the award against the subsidy control principles, provided it complies with the conditions set out in the streamlined route.

What do the new streamlined routes cover?

Below are the main details of each of route.  The DBT has issued guidance, including details of the streamlined route requirements, on each streamlined route, available here.  Should you require more detailed information please get in touch.

Arts & culture

There are three categories under the arts and culture route:

• Category 1 – Arts, creativity and culture which covers traditional and contemporary disciplines such as dance, theatre and music;
• Category 2 – Screen; includes film and TV but also newer technologies such as extended reality;
• Category 3 – and Cultural heritage. This is wide-ranging and covers physical spaces including museums and historic sites but also intangible heritage such as linguistic culture.

Each of the three categories has its own maximum subsidy amount, subsidy ratio, eligibility criteria and limitation conditions.  There are some additional conditions applicable to Category 2 subsidies. For each category, the eligible enterprises can be of any size (and engage in economic or non-economic activity), and subsidies can be used for any eligible costs incurred in relation to a project falling under one of the 3 categories. Eligible costs can be revenue, capital or project costs (including, for example, touring costs or research and development).

Community regeneration

There are two strands under community regeneration.

• Strand One: Community – can be grants or loans and be utilised to distribute subsidies to non-profit distributing organisations for specific eligible costs relating to preservation or creation of community infrastructure.  The eligible activities which can be supported by subsidy are feasibility support, operational support and acquisition and/or renovation of new or existing community infrastructure.  There are subsidy ratios and maximum award amounts which differ depending on the eligible activity, and also limitations on costs.
• Strand Two: Regeneration – any type of organisation planning to deliver a regeneration project in the UK can receive a subsidy under this strand, but the regeneration project must be in relation to developing brownfield land or repurposing underused buildings.  This could well be of benefit to those in the community development trust sector (and who are seeking to make use of rights under the community empowerment legislation).

It is encouraging to see the UK Government monitoring the operation and effectiveness of the Act.  Hopefully the new streamlined routes will bring increased benefits for the third sector.

How we can help

If you would like to discuss how this issue might impact you or your business, please contact our Senior Solicitor, Lindsay Robertson.