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The Subsidy Control rules – Transparency Guidance

05 May 2021

The UK's new Subsidy Control rules include an obligation on the funder to publish information online.  Failure to publish the correct information online within six months of the award has potentially negative implications for both the funder and the recipient.

For the funder, failure to meet the transparency obligations puts the subsidy at risk of being regarded as unlawful, and it fails to "start the clock" in terms of the potential challenge period, beyond which national court challenges are time-barred. For the recipient of public funding, failure to meet the transparency obligations puts the subsidy potentially at risk of recovery.  In this guidance, we explain how the transparency obligations can be satisfied.

Legal obligation to publish information on subsidies

The transparency obligation is set out at Article 3.7.1 of the new EU – UK Trade and Cooperation Agreement (the "TCA") which reads:

"With respect to any subsidy granted or maintained within its territory, each Party shall within six months from the granting of the subsidy make publicly available, on an official website or a public database, the following information:

(a) the legal basis and policy objective or purpose of the subsidy;

(b) the name of the recipient of the subsidy when available;

(c) the date of the grant of the subsidy, the duration of the subsidy and any other time limits attached to the subsidy; and

(d) the amount of the subsidy or the amount budgeted for the subsidy."

Since 11pm 31 December 2020, public bodies awarding subsidies in the United Kingdom have had an obligation to publish this information within six months on an official website or public database.  Therefore, a funder which awarded a grant on 1 January 2021 has until 1 June 2021 to publish the information.

It should be noted that not all subsidies are subject to the transparency requirements, for example there is no obligation to declare information relating to awards under the Small Amounts of Financial Assistance provision at Article 3.2.4 of the TCA (which allows up to 325,000 Special Drawing Rights of subsidy in a three year period).

Search for UK Subsidies

The UK Government has set up a website especially for this purpose called "Search for UK Subsidies".  The database contains additional information to that required by the TCA, including the sector and type of subsidy awarded. Public bodies that wish to upload information on to the website should contact the national Subsidy Control coordination unit for a log in code.

The link between transparency information and Subsidy Control challenges

Under Article 3.11.3 of the TCA the normal period for challenge of a subsidy by an interested party is one month from the date of publication of the information required by Article 3.7.1.  The exception to this is if by  Article 3.7.5 of the TCA, within that one month, an interested party requests information about how a subsidy which has been published on the official website or database satisfies the six Common Principles set out at Article 3.4 of the TCA.  An interested party in this context is defined as "any natural or legal person, economic actor or association of economic actors whose interest might be affected by the granting of a subsidy, in particular the beneficiary, economic actors competing with the beneficiary or relevant trade associations".

Provided a satisfactory request is submitted, then the public body has twenty eight days to provide the information and the interested party may, under the TCA, bring proceedings within a month thereafter. For this reason early publication is in the interest of both the funder and the recipient of public funds.

Conclusion

There is a legal obligation to publish the transparency information within six months of making an award. For this reason public bodies should ideally incorporate transparency considerations into their award process and applicants for funding should insist that this legal requirement is satisfied.  As always, we're on hand if it would be helpful to discuss the issues raised.

DWF Law LLP has exceptional experience in public funding issues, including the Subsidy Control rules. Members of our Public Sector team have expertise and experience developed from working within Central Government, Local Government, the European Commission and alongside international companies securing public funding. As a result, we are a 'safe pair of hands' when it comes to awarding and receiving public funding. Please free to get in touch, if it would be useful to discuss any of the issues raised in this article or other matters related to public funding.

Further Reading