On 12 November 2025, the Competition and Markets Authority (CMA) published updated guidance (the Guidance) on the operation of the subsidy control functions of the Subsidy Advice Unit (SAU). This incorporates key changes from the consultation draft, which was published in 2022, and reflects feedback from stakeholders as well as the CMA's own learnings from the first years of the operation of the Subsidy Control Act (the Act). Overall, the Guidance seeks to make the SAU's process more transparent and predictable for public authorities.

Background

The CMA began consulting on the draft Guidance in 2022, around the time that the Act come into force.

The SAU evaluates subsidies that public authorities propose to grant, providing a non-binding advisory report on their compliance with the Act. Not all proposed subsidies require review; the mandatory regime captures those over £25 million, or £5 million where related to a sensitive sector, or where a subsidy is intended to rescue a failing firm or to allow a business to relocate their activities. Public authorities wishing to grant subsidies falling outside of the mandatory regime but meeting lower thresholds can voluntarily apply for an opinion.

The SAU is also tasked with monitoring the operation of the UK's subsidy control regime.

The updated Guidance also coincides with the SAU's 100^th referral report, which was published earlier this month.

The Guidance

The Guidance aims to provide information on the subsidy control functions of the SAU, including on timescales and procedures, and explain how the SAU exercises its functions.

The Guidance contains updates in five key areas.

1. Acceptance

The Guidance includes more detail on the requirements for the SAU's acceptance of referrals. The additions provide useful information for public authorities and their advisors, such as how to prepare a non-confidential summary of the subsidy which can appear on the CMA's website. There is also now a Referral Submission Checklist, which lists what the public authority's assessment should include and what evidence should be submitted alongside it.

2. Pre-referral discussions

Pre-referral discussions have become increasingly important in the SAU's process. The draft Guidance already made clear that voluntary pre-referral discussions are "not for the SAU to advise the public authority on the design of subsidies and schemes […] whether measures qualify as a subsidy, or meet the conditions for referral." It also noted that the public authority should contact that SAU in good time to initiate discussions, especially for measures which are complex or novel in nature.

A welcome addition to the Guidance around pre-referral discussions is the acknowledgement that it may be useful for the authority to have a 'teach-in' with the SAU, to provide background to the relevant industry or help the SAU understand complex concepts. This may be familiar to parties who have undergone merger control pre-notification with the CMA, and is a positive step in ensuring that misapprehensions are dispelled early in the process and do not colour the final report.

The SAU, however, continues to exclude the possibility of discussing whether measures qualify as subsidies. Affording public authorities with a route to obtain comfort that a measure is not a subsidy therefore remains a key area that the Act and the associated regime overlooks.

3. Interpreting the SAU's report

Within the new section, 'Actions to follow SAU report' two important additions are made:

a) After the SAU has released its report, "it is the public authority's responsibility to decide whether any changes are to be made to the [public authority's] Assessment..."

While seemingly obvious, it is worthwhile clarifying that the party ultimately responsible for the lawfulness of the subsidy is the granting public authority. This clarification sits alongside the guidance already in the draft noting a public authority must not actually grant the subsidy until a statutory cooling off period has elapsed. Indeed, the new Guidance goes further, and explicitly recommends that "public authorities use the cooling off period to consider the advice" in the report, including whether any changes are needed to the subsidy.

b) The SAU "remains available" to liaise with the public authority following the report's publication, but "will not consider any amended referrals and will not amend its report following publication".

While there are limits, public authorities should, therefore, be able to seek clarification over aspects of the SAU's report and understand what they should amend to bring the design of their subsidies into maximum compliance. Allowing for this should also mitigate the risk of unnecessary challenges before the Competition Appeal Tribunal.

4. Analytical framework

The Guidance now more comprehensively lays out the factors which the SAU considers as part of its review, complementing the Statutory Guidance which already accompanies the Act.

The draft Guidance already laid out the steps in the SAU's assessment and the policy principles underlying them.

However, the new Guidance elaborates on the questions that the SAU will use to make its assessment. For example, it is now clear that the SAU must ask whether the policy objective is specific to the subsidy that is being granted. In a case where the public authority relies on an equity rationale argument, the SAU must also now ask whether the assessment clearly identifies the group affected by the inequity. A number of additional questions have been added across the SAU's steps and principles.

Overall, this development should make the SAU's review more predictable, and may allow public authorities to address such questions upfront in their assessment.

5. Confidential information

The draft Guidance had extensive information on the SAU's processes and obligations related to confidential information. The CMA made it clear, for example, that it has an obligation to protect confidential information relating to business and individuals, but also must ensure that "public authorities understand the reasons for its evaluation". Through this, the draft Guidance had already allowed for public authorities and third parties to make representations as to why certain information should not be disclosed in a final report.

The key update relates to representations that parties must make when providing reasons for marking information as confidential. The draft Guidance had noted that submissions "must include sufficient explanation for the claim, including the nature, magnitude and likelihood of any harm that may be caused by its disclosure […]". However, the Guidance now includes an instruction that such descriptions must be "specific" to each statement over which confidentiality is claimed. Parties will already be aware from their dealings with the SAU that marking whole documents as confidential is not acceptable; being as specific as possible upfront about confidentiality will streamline the publication process. This also aligns the SAU's approach to that of other departments in the CMA, for example in markets, mergers, and antitrust.

Conclusion

Overall, the final Guidance contains improvements which should allow public authorities to predict the questions which the authority will ask, and perhaps even make better use of the process (including through pre-referral and post-report discussions). It remains to be seen whether these improvements result in practical benefits for parties. It will also be interesting to see, when further challenges are brought before the Competition Appel Tribunal, whether the Guidance results in more effective reports and, therefore, more robust subsidies.