Public expenditure usually falls within the scope of a subsidy control regime when it is provided directly or indirectly to certain enterprises or entities that engage in economic activities, provides these with an economic advantage and has or could have an effect on trade and competition internationally or within the UK.
Until the UK left the European Union, the EU's State aid rules controlled how UK and discretionary EU funding was provided to enterprises and entities that engage in economic activities. Now the UK has left the EU, it is no longer bound by the State aid rules (except when Article 10 of the Windsor Framework applies) and has developed its own domestic subsidy control regime.
Article 10 of the Windsor Framework
The EU and the UK formally adopted the Windsor Framework on 24 March 2023.
The Windsor Framework, replaces the Northern Ireland Protocol, providing a new legal and UK constitutional framework.
Article 10 provides that the State aid rules will continue to apply to the UK in respect of measures which affect trade in goods between NI and the EU (including the production of and trade in agricultural products) and the production of wholesale electricity in NI (i.e. measures impacting on the Single Electricity Market).
The European Commission and the United Kingdom have recently published their respective guidance on the circumstances in which Article 10 of the Windsor Framework will apply.
- UK guidance on Article 10 of the Windsor Framework
- EC guidance on Article 10 of the Windsor Framework
- State aid - Rules, Regulations and Guidance
- State aid: A Beginner's Guide for Public Bodies in Northern Ireland
The UK Subsidy Control Regime
The Subsidy Control Act 2022
The Subsidy Control Act 2022 provides the framework for the provision of subsidies and builds on the provisions in the subsidy control chapters of the Trade and Co-operation Agreement, which applied in the interim after the UK’s exit from the EU.
Please note that the UK subsidy control regime does not replace the State aid rules in respect of measures which affect trade in goods between Northern Ireland and the European Union which will still have to follow the State aid rules.
Role of the DfE Subsidy Control Advice Unit
DfE Subsidy Control Advice Unit (SCAU) provides advice and assistance to Northern Ireland Departments and their Arm’s Length Bodies (ALBs) on both the State aid rules and the UK Subsidy Control regime and how measures can be designed so that they comply with the relevant regime. This includes:
- providing advice, at an early stage, on whether a subsidy might be present in a policy or funding/assistance proposal
- providing advice on whether or not proposals are within the scope of Article 10 of the Windsor Framework
- working with Northern Ireland Departments and their ALBs to make sure that any assistance they provide is in compliance with the State aid rules or the UK Subsidy Control regime
Training and awareness raising
SCAU provides training and awareness-raising activities for people in Northern Ireland Departments and their ALBs, helping them to identify when subsidies might be present in their projects/plans and how to deal with it.
If you think your organisation would benefit from a training/awareness raising session please contact firstname.lastname@example.org.