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17 August 2026
The CMA published its first periodic monitoring report on the UK’s subsidy control regime at the end of June this year – a weighty 168 pages of it. Oliver Slater, Beatrice Wood and Aakash Vadher break down what this means for public authorities and businesses alike, including what we can expect a the regime continues to bed in and develop.
Following that, BIST (the Department for Business, Innovation, Science and Trade) has now had the chance to digest the report and respond. Its verdict, in short: the regime is broadly working, and the fixes will be incremental rather than sweeping.
Here’s what that means in practice.
BIST notes that the CMA’s assessment is largely positive. It states that the post-Brexit regime is doing what it was designed to do, giving public authorities flexibility and letting subsidies flow faster than under the old EU State Aid framework.
It also sets out that the Subsidy Advice Unit (SAU) process is helping authorities steer clear of poorly designed subsidies, and there’s early evidence of genuine investment benefits -particularly in energy and industrial projects that might not otherwise have gone ahead.
The CMA grouped its review into three areas which it recommended BIST further considers.
BIST has accepted the core of them, but its response is notably about refinement rather than redesign:
| CMA review | What BIST plans to do in response |
| Guidance and support: while generally effective in helping public authorities understand the regime and assess compliance of proposed subsidies and schemes, the report recommends that support for public authorities could be improved by clarifying elements of the statutory guidance and providing a wider range of practical support tools. | Publish a sixth version of the statutory guidance in the autumn, recognising that the solution is not simply to add to the volume of guidance. It will consider ways of making it more concise, as well as be clearer on areas of the regime which public authorities find particularly challenging – reflecting recent CAT judgments and SAU reports where useful. Review the Quick Guide to make it more accessible and useful for those unfamiliar with subsidy control. Roll out additional training for public authorities (jointly ran by BIST and the CMA), including on how to run competition assessments. |
| Streamlined routes: while streamlined routes offered greater legal certainty and are less burdensome, the report concludes there may be evidence that they may not have been used by public authorities to the extent intended. The CMA found there was a clear desire for additional streamlined routes across a range of sectors. | Existing routes cover energy usage, local growth, R&D, arts and culture, community and regeneration, and housing. The R&D route is being revised, with a new version expected before Parliament this autumn. The energy usage and local growth routes to follow (no firm timeline). BIST is also inviting authorities and stakeholders to suggest tweaks and new routes. |
| Transparency: although the regime provides for transparency in relation to the giving of subsidies, the report concludes that some aspects of this do not work well. In particular, that the subsidy database is not as effective as it could be in enabling a wider awareness and understanding of the subsidies that are given. | Improvements are to be made to the subsidy database’s search function (expected later this summer). It states that a more clearly laid out, navigable search page should enable database searches to quickly identify and monitor subsidies. Notably, BIST is upholding the £100,000 transparency threshold to keep compliance costs and regulatory burden down, while continuing to monitor it. This was an area originally flagged to the CMA in stakeholder evidence it received. It will not introduce a mandatory publication of principles assessments or “no subsidy” decisions, citing the administrative burden and the risk of deterring authorities from using the regime. Again, this was an idea originally leveraged by stakeholders and formed evidence collected in the CMA’s review. BIST states its position will continue to be monitored. |
Clearly, this isn’t the wholesale overhaul some commentators have been pushing for – although that’s not necessarily a bad thing. It’s still early days: the regime is young, many subsidies’ effects will only become visible over the next several years, and the full impact on competition and investment remains unknown. Also, arguably, several of the criticisms levelled at the SCA have been overstated, and there’s real value in giving a young regime time to bed in rather than tearing it up.
That said, it’s notable what BIST has chosen not to touch. For example, there’s no move to refine the enforcement regime or the SAU referral process. The direction of travel (at least for now) is firmly toward tidying up guidance and smoothing the edges.
For public authorities and businesses alike, then, it looks like much the same for the time being. The next CMA monitoring report is due in 2029 to tell us how it’s holding up.
In the meantime, the regime will keep evolving and the Subsidy Control Team at Sharpe Pritchard will be on hand to provide updates as an when they arise.
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This article is for general awareness only and does not constitute legal or professional advice. The law may have changed since this page was first published.
Associate
Paralegal
