During the Covid-19 pandemic, much of the focus has been on shoring up existing delivery and, where possible, extending arrangements if it is not possible to re-procure.
We never liked it anyway…
The difficulty with EU State aid law is the width of transactions captured. If the Government was proposing to subsidise our steel industry, so that it could survive and produce cheap exports, it is logical in a free single market (whether you agreed with it or not!) that State aid law would act to prevent this. However, State aid law went much further and State aid rules caused administrative and sometimes real barriers to sensible transactions between local authorities and community groups or making local authority investment activity much more of a headache. As many local authorities have found out when setting up housing development vehicles or carrying out regeneration activity, State aid law required the authority to demonstrate that it was carrying out these transactions as if it were a private investor, or find an exemption to the rules.
Welcome relief then?
So is this a victory for Brexit, reducing the regulatory burden and making authorities’ lives easier? Well, it may be in time, but do consider these three points:
- Authorities will still have to consider State aid law when making or receiving grants or investments until we actually leave the EU. Perhaps the Commission will look more closely at a number of UK transactions as part of the inevitable leaving process negotiations!?;
- After we leave, in the absence of any other deal, authorities will have to comply with the WTO rules on “Subsidies and Countervailing Measures”. These rules will have to be placed into direct effect on public bodies in the UK. The rules are narrower than the State aid rules and largely relate to the subsidy of exporting parts of the economy. How the Government achieves all the legislation necessary to translate the WTO rules into place in the time available is anyone’s guess.
- In certain parts of the economy, bi-lateral trade deals might affect how local authorities are able to subsidise or interact with certain parts of the economy, most likely in higher value manufacturing (i.e. steel).
Not all bad…
State aid law compliance is a series of hoops. There are very few situations where State aid law prevents a transaction entirely, but it usually influences the way that you can achieve your goals. The removal of the “hoop jumping” would be welcome, but in the meanwhile it will keep us all fit!
For more information
Please contact Richard Brooks.
The Prime Minister announced on Tuesday 22 September a new range of restrictions to protect us from the Covid crisis, some of which will apply to charities.
Following the end of the possession stay on 21 September, Helen Tucker & Rebecca Sembuuze from our housing litigation team discuss the most recent guidance, priority cases and what to expect in court.
Covid-19 has resulted, on the whole, in a marked co-operation between contracting authorities and their suppliers as everybody focuses on maintaining delivery as far as possible.
Employment Tribunal rules in favour of claimants in minimum wage case – has the interpretation of “working time” changed?
As we enter a recession, we have been here before, and a key question is what did we learn and how can we benefit from that learning?
It is anticipated that as lockdown restrictions ease, and particularly with children and young adults returning to education, cases of meningitis will start to rise.
As we continue to emerge from lockdown measures and deal with local measures and the short and long term economic impact of Covid-19, local authorities will need to re-assess how services will be delivered for years to come.
The Government first announced plans for a shared ownership right to buy in October 2019. At the time the sector raised concerns about the impact the plans would have on housing associations ability to borrow. An election and a pandemic later the Government announced, during the CIH Housing Festival last week, the return of the right to shared ownership as part of its Affordable Homes Programme (AHP).
Two final pieces of the possession jigsaw have been published on 15 September 2020. Mr Justice Knowles’ working group on possession proceedings has issued its guidance on the “overall arrangements” for possession proceedings.
To receive invitations to our events, as well as information and articles on legal issues and sector developments that are of interest to you, please sign up to Newsroom.