Our subsidy powers
Subsidy means a financial or in-kind contribution given by a public authority to a commercial enterprise on a selective basis that provides an economic advantage, and that may cause a distortion in or harm to competition, trade, or investment.
As a public body with a broad economic development remit, we regularly provide grants, loans and other assistance to promote the growth of the region. From 4 January 2023 the scope of much of our assistance is governed by the UK Government’s Subsidy Control Act 2022 and further international commitments on subsidy control. These international commitments include the UK-EU Trade and Cooperation Agreement (TCA), other Free Trade Agreements (FTA) and World Trade Organisation (WTO) rules.
It is anticipated that in most cases our assistance, if assessed as a subsidy, will fall within the scope of the Subsidy Control Act 2022, Chapter 3 of Title XI of the TCA or aid within the scope of Article 10 of the Windsor Framework (an agreement between the UK and EU regarding Northern Ireland) and/or, for awards of funding that include contributions from EU Structural Funds, aid within the scope of Article 138 of the UK-EU Withdrawal Agreement agreed on 17 October 2019 (as implemented by section 7A of the European Union (Withdrawal) Act 2018).
Most of our assistance is awarded through subsidy schemes – the details of which are listed below. Sometimes we will award as Minimal Financial Assistance under the provisions of Chapter 7 of the Subsidy Control Act 2022. If no suitable cover is available through these methods or through the national subsidy schemes (called Streamlined Routes) there is the option for us to consider a standalone award. The latter requires a full subsidy principles assessment which is described in the UK Guide for beneficiaries mentioned below.
We always assess each project firstly for its potential to meet our economic development priorities and policies for the Highlands and Islands. If our assistance is considered appropriate, we will make an assessment to determine if the support is likely to constitute subsidy. If it does, our staff will work with clients to find the most appropriate legal cover to avoid breaching the competition laws. It is important that applicants provide full and accurate declarations in support of subsidy assessments. Applicants are responsible for seeking their own legal reassurances on becoming subsidy beneficiaries.
The UK Government published a Subsidy Control: Guide for beneficiaries in December 2023 which provides information about the subsidy control regime and what beneficiaries can expect before and after receiving a subsidy. We encourage HIE applicants and clients to familiarise themselves with this guidance.
The Scottish Government’s Subsidy Control webpages are also a useful information source.
