Scottish Enterprise, Capital Investment Scheme

• This proposed scheme is a new Capital Investment Scheme to enable provision of subsidies to applicants in Scotland where the project meets certain conditions in the scheme and contribute towards its primary policy objective of productivity growth in Scotland through increased capital investment by businesses in Scotland.
• The scheme has a budget of up to £1.8 billion and will run for a ten-year duration beginning in early 2025.
• Our key takeaways from the Subsidy Advice Unit (SAU) report are:
  • Assessments should explain and evidence the equity objective and market failure the subsidy or subsidy scheme seeks to address and how this impacts the identified policy objective.
  • Assessments should fully describe the criteria and processes that will be used to assess subsidy applications under the subsidy or subsidy scheme and consider how these contribute to ensure additionality, proportionality and minimising negative effects on competition and investment. Public bodies making assessments should ensure that the eligibility and appraisal criteria is finalised to demonstrate compliance of Principles B, D and F of the Subsidy Control Act 2022 (the Act).
  • Assessments should fully test the robustness of the conclusions drawn from any counterfactual model to establish that the policy objective cannot be achieved in such counterfactual.
  • Assessments should examine the potential distortive effects of subsidies and subsidy schemes in the UK in line with the Statutory Guidance and conduct a thorough analysis of the potential for subsidy races resulting from the subsidy or subsidy scheme.
  • Assessments should specify how public authorities reach their conclusions on whether the benefit of the subsidy or subsidy scheme outweighs any negative effects.

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