City of Doncaster Council, Subsidy to Fly Doncaster Limited

• This subsidy is intended to be awarded in the form of a subsidised-interest loan to allow the airport to reopen and begin operations again following its closure in 2022. The total value of the loans will be £105.2m with £60.6m being for start up and other costs, and £44.6 to be for rent deferral costs (noting the total values are still subject to the repayment decisions).
• Our key takeaways from the Subsidy Advice Unit (SAU) report are:
  • A clear and specific policy objective should be identified and consistency reflected throughout the report.
  • Any assumptions and potential impacts which could occur from passenger/customer growth or decline should be addressed as well as any other factors which could impact financial performance or the intended change in economic behaviour.
  • An explanation should be provided on why funding has been provided for the deferment of any rental costs.
  • How and why the decision was made to choose the means for delivering the project (e.g. a special purpose vehicle) should be explained.
  • The report should identify and evidence its conclusion on the potential competition impacts the subsidy will cause, especially in respect to investment to similar infrastructure. Information on the steps taken in the subsidy’s design to mitigate this distortion should also be included.
  • The balancing exercise should consider the potential negative effects on international investment and trade across the subsidy’s lifetime.

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