When is a subsidy decision actually made?

 

 

Setting aside broader competition law matters, the key subsidy question for the Tribunal was whether it had jurisdiction to review a subsidy decision under section 70(1) of the SCA where only a provisional or "in principle" decision has been taken, and the public authority had yet to reach a conclusion.

 

The Tribunal's prior judgment in Weis v Greater Manchester Combined Authority was a key starting point. In that case, a decision in principle to grant loans had been taken on 22 March 2024, but due diligence was still ongoing and GMCA denied that a reviewable subsidy decision had been taken. Mr Weis nevertheless filed his subsidy appeal on 7 June 2024 seeking an expedited review.

 

The Tribunal in Weis held that although the borrowers did not have an enforceable right to financial assistance until the date of entry into the loan agreements, this did not mean that there was no challengeable subsidy decision before then. It was concluded that the subsidy decision within the meaning of section 70 was taken on the date of the in-principle decision. 

 

In Thomas, it was confirmed that a reviewable decision under section 70(1) may precede the execution of formal legal documents such as a loan or grant agreement. However, the requirement under section 70(1) for the public authority to have taken a "decision to give a subsidy" cannot be met where that decision is only a provisional or an "in principle" decision that is subject to further consideration and review itself. 

 

In reaching this conclusion the Tribunal focused on four key reasons:

The Tribunal took the clear view that the Council had not taken a final decision to grant two of the grants and so concluded that it did not have jurisdiction to review either of those proposed grants under section 70(1). 

 

The Tribunal struck the claim out rather than staying it. There was no clear timeframe for a final decision on either grant, and any fresh subsidy claim would require comprehensive rewriting to reflect the final terms and the Council’s assessment under the subsidy control principles. The Tribunal advised that once final decisions have been made, the Claimant could file fresh applications for review pursuant to Section 71 and rule 98A. 

 

Key takeaways

• Only a formal, final decision to give a subsidy triggers the CAT's jurisdiction under section 70(1) – not a provisional or conditional decision.
• That said, a reviewable decision can be taken before the beneficiary acquires an enforceable legal right to the money.
• Whether a decision is truly final will depend on whether what remains outstanding is:

(a) administrative formality; or

(b) ongoing (and substantive) deliberation.

 

• Public authorities need to be attentive to internal decision-making processes and note when the process moves from provisional to final. Once final, the windows for challenge and entry on the database open.
• Prospective challengers should not rush to court before a final decision is taken. If they do, they are risking an immediate strike-out. Conversely, challenges should still be brought promptly once that reviewable decision is made to avoid being timed out. We expect many subsidy cases will hinge on whether a reviewable decision has taken place given the short timescales for challenge and broad range of decision-making processes.
• Different points in the decision-making process may be deemed to be reviewable depending on whether a subsidy or no-subsidy approach is taken by the authority. This is because a no-subsidy decision may have fewer outstanding points to be addressed (such as a subsidy principle assessment of compliance), leading to that being a more ‘final’ decision. Again, we expect this to provide fertile ground for challenges.

Browne Jacobson has one of the largest dedicated subsidy control teams in the UK, led by Alex Kynoch. We advise all tiers of government and subsidy recipients on subsidies and clients value our pragmatic, solution-focused advice. For more information regarding subsidy control law, please contact our specialist team.