Arts and Culture, Community and Regeneration: The Two New Streamlined Subsidy Routes

Beatrice Wood and Sophie Read explore the two new Streamlined Routes, officially introduced in February this year, to simplify the awards of certain subsidies: the Community and Regeneration route and the Arts and Culture route. This article discusses the potential impact of their introduction, along with the general background and benefits of utilising streamlined routes.

Firstly, a subsidy is an economic advantage given to an enterprise by a public authority. To ensure transparency, reduce distortive effects on competition, and remain compliant with the UK’s international obligations, the Subsidy Control Act 2022 (the “Act”) governs the grant of subsidies.

The statutory definition of subsidy under section 2(1) of the Act is:

“In this Act, “subsidy” means financial assistance which—

(a) is given, directly or indirectly, from public resources by a public authority,

(b) confers an economic advantage on one or more enterprises,

(c) is specific, that is, is such that it benefits one or more enterprises over one or more other enterprises with respect to the production of goods or the provision of services, and

(d) has, or is capable of having, an effect on—

(i) competition or investment within the United Kingdom,

(ii) trade between the United Kingdom and a country or territory outside the United Kingdom, or

(iii) investment as between the United Kingdom and a country or territory outside the United Kingdom. “ [1]

What is the usual process for the award of subsidies?

Under the Act, a public body should adopt the following overarching process when granting a subsidy:

• Confirm whether the award of public funds is a subsidy under the statutory definition in section 2(1) of the Act.
• Determine whether the subsidy falls under the general prohibitions[2] and is therefore automatically unlawful. Determine whether the subsidy is prohibited under sections 19 to 24 and sections 27 to 28, to which more specific conditions apply.
• Determine if any of the Act’s exemptions apply (Part 3 of the Act) and/or whether the subsidy is eligible to be awarded under a scheme or a streamlined route.[3]
• Analyse compliance of the subsidy with subsidy control principles[4] (where no exemptions/routes/schemes apply, as per step 3).

It is the final stage of this process which can be the most burdensome for public bodies. Awarding public bodies have a statutory duty to consider all seven (7) subsidy control principles (Principles A through to G), with the degree of the assessment being proportionate to the size of the subsidy. As above, if the subsidy can be validly awarded under one of the streamlined routes created by Government to date, there will be no need to assess it against the subsidy control principles. For this reason, these routes can be useful tools for public authorities.

What are the categories of streamlined routes?

New Streamlined Routes

Two new streamlined routes were laid before Parliament on the 12^{th of} January 2026: Community and Regeneration and Arts and Culture. The introduction of these routes follows a previous consultation carried out by the Department for Business and Trade, whereby the results showed there was overwhelming support for the proposed routes, with 86% supporting a Community Regeneration route and 87% favouring an Arts & Culture route.

These new routes entered into law on the 21^st February 2026.

So, what do they entail?

Community and Regeneration[5]

According to government, the aim of this route is to support public authorities to promote sustainable and attractive communities and “drive economic growth through investment in brownfield land and underused buildings”[6]. This scheme provides for the giving of subsidies that fall within one of the two following “strands”: Community or Regeneration.

Strand 1: Community

The Community strand aims to address social challenges across the UK. As set out in the streamlined route’s explanatory memorandum, “across the country there are communities with high levels of deprivation without the tools to catch up, and large towns and cities with low productivity that lags behind international counterparts.” This strand is aimed at improving economic fortunes by allowing public authorities to more easily support enterprises to preserve and create much needed community infrastructure.

Under this strand, there are different categories of eligible activities and costs:

• Community infrastructure feasibility support. For example, procuring professional advice on the feasibility of renovation of existing community infrastructure.
• Support for the acquisition and/or renovation of existing community infrastructure.
• Support for the creation of new community infrastructure, such as the construction of new premises and the repurposing of existing land and buildings.
• Operational support for community infrastructure, ensuring that it can be sustained into the future.

Public authorities should note that different subsidy ratios and maximum subsidy values apply depending on the type of support given in the Community strand.

An enterprise can receive subsidies from each category (subject always to the maximum subsidy values applied to each), and the total maximum subsidy available under the Community strand, taking into account all cumulation available across the three different categories, is £3,000,000.

Entities that are eligible for subsidies under this strand are non-profit distributing organisations, such as charities or community organisations. Profit distributing organisations will not be eligible for subsidies under the Community strand.

Strand 2: Regeneration

The aim of the Regeneration strand is to support enterprises with large scale regeneration projects to rejuvenate underdeveloped areas across the UK, which in turn will promote economic growth drivers.

To be an eligible activity that can be supported by this streamlined route, a regeneration project should involve the redevelopment of brownfield land and/or underused buildings into a use that will improve productivity and support economic growth. This aligns with the one of the highlighted aims set out in the explanatory memorandum – i.e. “to transform under-developed areas across the country into productive drivers of economic growth.”

Again, conditions apply to this strand. For example, all disposals of land and buildings funded under the Regeneration strand must be done at market rate. Further, any funded project is expected to deliver against one or more of the following outputs:

• Increase the supply of sites ready for development,
• Increase the supply of sites with new or improved infrastructure,
• Increase the supply of new or repurposed buildings.

The maximum amount that can be awarded under this strand is £12 million. Again, the Regeneration strand details specific eligible costs:

• The acquisition of brownfield land and/ or underused buildings. A standalone acquisition is only eligible for support when a linked regeneration project, that is designed to meet the requirements of this Streamlined Route, commences within 3 years.
• Preparing brownfield land and/ or underused buildings for development which will include activities such as the completion of demolition activity, site clearance, land remediation, groundworks, and levelling.
• The construction of infrastructure such as roads, drainage, digital services, utilities, and active travel routes.
• The delivery of new, refurbished, and repurposed buildings.
• Professional fees and capitalised management costs linked explicitly to the delivery of the regeneration project.
• Finance costs linked explicitly to the delivery of the regeneration project.

An enterprise of any size and type may be eligible for subsidies under this Regeneration strand where they are carrying out an in-scope project and comply with the conditions.

Arts and Culture[7]

The aim of the new Art and Culture streamlined route is to sustain cultural ecosystems, and provide short, medium and long-term support for development and delivery of arts and cultural activities, in addition to making such activities and spaces more affordable and accessible.

The arts sector provides great public benefit; however, enterprises often have limited incentives to invest in this area. In the explanatory memorandum to this streamlined route, it has been explicitly recognised that “social benefits reduce the attractiveness of private investment into arts and culture and are unlikely to incentivise enterprises to undertake investment to the same extent as grants and so, public subsidy is needed for the maintenance of positive externalities that arise from a sustainable and active arts and culture sector.”

Given this identified market failure, subsidy intervention is often crucial in this industry. This streamlined route aims to facilitate such a subsidy.

Activities eligible for subsidy awards under this route fall into three categories:

Category 1: Arts, Creativity, and Culture

Activities under this category includes both traditional and contemporary artistic disciplines, for example, music, theatre, and visual arts.

Category 2: Screen

This category includes video games, film, and digital media, amongst other screen-based forms of creativity. Additional conditions apply for subsidies awarded to enterprises for activities under this category.

Category 3: Cultural Heritage

This category focuses upon preserving cultural heritage by supporting facilities including museums, historic sites, and libraries.

Any enterprise, regardless of size and whether they engage in economic or non-economic activity, may be eligible for a subsidy when carrying out a project that falls into the above categories.

Furthermore, the following categories of eligible costs can be subsidised in this streamlined route, so long as they are directly incurred by the eligible project:

• Revenue costs,
• Capital expenditure costs,
• Project costs.

More detailed descriptions of the above are available in Part 7 of the Arts and Culture Streamlined Route Guidance.

These subsidies can be in the form of repayable or non-repayable grants, loans, or more complex financial instruments combining these forms, as appropriate.

Additionally, subsidy ratios and maximum award amounts apply to subsidies given under this streamlined route and are different for each category of project outlined above.

Existing Streamlined Routes

Next are the streamlined routes that have been in place for a little while longer. These routes have been available since the 5^th of January 2023 and will remain so up until the 4^th of January 2029.

We set out the overarching aims of these existing streamlined routes below, but note that specific conditions (such as eligible activities, eligible costs, value caps and ratio conditions) apply, which public authorities would need to ensure they comply with. These are all detailed in each streamline route’s guidance materials.

Research, Development and Innovation[8]

The aim of this streamlined route is to increase public investment in research, encouraging private sector RD&I investment and spending, accessible funding, and collaboration, for example between universities, businesses, and charities. In-scope subsidies include feasibility studies, such as for assessing the feasibility of potential innovation projects, and for both industrial research and experimental development projects, and for small and medium enterprises.

Energy Usage[9]

This streamlined route provides for the grant of subsidies that fall into one of the following three categories: energy demand reductions, green heat networks, and subsidies for training skills related to the aforementioned.

Local Growth [10]

Under the local growth streamlined route, public authorities can grant subsidies for: business development for SMEs, enterprises employing workers with disabilities, and enterprises employing disadvantaged workers.

Benefits for local authorities when using streamlined routes

One of the key benefits of the streamlined routes to local authorities is the reduced administrative burden involved, as a subsidy control principles assessment does not need to be carried out when using a streamlined route.

Further, using a streamlined route compliantly reduces a public authority’s exposure to legal challenge, as compared with a regular subsidy award. This is because, under section 70(2) of the Act, the Competition Appeals Tribunal (“CAT”) has jurisdiction to review the making of the subsidy scheme (such as a streamlined route), but not the later subsidies granted under it. It is difficult (though not impossible) to envisage anyone challenging the making of a streamlined route, given this would be a direct challenge to central government policy.

For subsidies awarded individually (i.e. not under a scheme/streamlined route), an “interested party” can apply to the CAT for a review of such a decision.  A public authority’s assessment against the subsidy control principles is not outside the full scope of scrutiny in this regard[11]. For example, one of the grounds of challenge in Bristol Airport v Welsh Ministers (the case currently awaiting judgment to be handed down by the Competition Appeals Tribunal (the “CAT”)[12]) is that Welsh Ministers wrongly misapplied the subsidy control principles. Utilising a streamlined route compliantly to award a subsidy removes this form of challenge risk.

However, it is still important to keep in mind that, even if the streamlined routes simplify compliance with the Act on the surface; granting subsidies under these routes still requires careful checks on eligibility, cost limits, and proportionality to ensure they meet the streamlined routes’ conditions. It should also be noted that the statutory guidance suggests that, where a subsidy does not “genuinely fall within the terms of the scheme” (or streamlined route, by that logic), it should be treated as an independent subsidy decision and challenged in the CAT as such. Compliance with the applicable conditions of the streamlined routes is therefore vital.

Also, public authorities should remember that a judicial review challenge may be brought against a subsidy awarded under a streamlined route on public law grounds – i.e. if the decision was not within the public authority’s powers, or was irrational, biased or otherwise unlawful on public law grounds.

It is hoped that the new Arts and Culture, and Community and Regeneration streamlined routes will help local authorities in supporting these sectors, and have widespread positive effects throughout local communities.

That said, streamlined routes still appear to be underused. At the time of writing, of the roughly 43,000 subsidies that have been awarded under schemes and published on the subsidy control database, only around 2% have been awarded under one of the Government’s streamlined routes. Of these, over 70% of have been awarded under the Research, Development and Innovation streamlined route.

It will be interesting to see whether the introduction of these two new routes will lead to an increase in the use of streamlined routes more generally. Given their introduction was rooted in the outcome of a public consultation, it is hoped that these two new routes will help address the specific market failures identified – but only time will tell.

Experts on your side

Sharpe Pritchard advise local authorities and utilities on all manner of subsidy control and competition matters. Our experts are on hand to guide you through the intricacies of the subsidy control regime. For further information or tailored advice, please contact us.

Beatrice Wood is a Junior Associate and Sophie Read is a Paralegal at Sharpe Pritchard LLP.

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[1] Subsidy Control Act 2022

[2] in sections 15 to 18 of the Act.

[3] in sections 10 and 11 of the Act.  

[4] as per section 12 of the Act.

[5] Community and regeneration Streamlined Route

[6] Community and Regeneration Streamlined Route Guidance

[7] Arts and culture Streamlined Route

[8] Research, Development and Innovation Streamlined Subsidy Scheme

[9] Energy Usage Streamlined Subsidy Scheme

[10] Local Growth Streamlined Subsidy Scheme

[11] The CAT’s jurisdiction is limited to assessing whether a subsidy decision was made within the authority’s powers, was fair and reasonable, and to assess whether it was consistent with the relevant principles and requirements of the Act. The Tribunal will not review the merits or effectiveness of a subsidy or subsidy scheme.

[12] We note there may be some delay to this judgment being handed down, given that on day 2 of the hearing, Welsh Ministers appear to have conceded the CAT should proceed on the basis the financial assistance in question is a subsidy (rather than a subsidy scheme, as was originally pleaded on day 1). The CAT therefore required a formal amendment to the Defence. Timings have shifted as a result.