The Lifeline Project was a well-regarded charity. Failure to carry out the targets within the contracts led the charity into insolvency and resulted in a personal, 7-year disqualification order.
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.
On 23 July, trainees from Anthony Collins Solicitors will host an ‘experience day’, which will involve various activities and presentations, with lawyers and non-lawyers from across the firm.
The Office of the Immigration Services Commissioner (OISC) has launched a new scheme specifically for charities and not-for-profit organisations who want to advise EU citizens on UK settlement.
In the second part of our series on contract management pitfalls, we look at the risks and opportunities presented by payment mechanisms in construction contracts.
Under most construction contracts, the contractor takes on the ground conditions risk. However, a recent case has demonstrated that the risk can fall on the employer.
The UK Government has been consulting on how it should promote social value in its procurements. Here is our response that we submitted to the consultation...
The Tenant Fees Act 2019 came into force on 1 June 2019.
A recent case in the Court of Appeal will no doubt bring a sigh of relief for employers, but a corresponding sigh of disappointment may be uttered for equality and gender balance in the workplace.
This briefing assists response to the consultation paper by outlining the consultation questions, providing some background information and prompting some thoughts and potential answers.
A report published on 29 May by the Institute for Fiscal Studies (IFS) has found that since 2009-10, local government spending on services has fallen on average by 21% in real terms.
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.