Will the New UK Subsidy Control Regime Help ‘Level Up’ the Economy?

Abstract

There is an emerging political consensus in the UK that greater devolution of spending powers will bring benefits in terms of reducing economic disparities between regions, enhancing social cohesion, and improving the economy's prospects for productivity, growth and the transition to net zero. The Subsidy Control Act 2022 is thought to be key to achieving this by providing public authorities with greater flexibility in how they make spending decisions than was previously the case under EU State aid rules. This paper examines whether the new regime does indeed make it easier for awarding bodies to grant beneficial subsidies. It concludes that the regime risks placing obligations on public authorities that are considerably more onerous than EU State aid rules and there is a need to significantly increase the scope of streamlined routes which provide legal certainty to beneficial spending decisions.