The law governing Britain's £156 billion in subsidies lets the body handing out the money mark its own homework unless the sum tops £25 million. A rival finally took a £70 million decision to the tribunal, which found no subsidy had been given.
Estimated reading time: 8 minutes
In short. The Subsidy Control Act 2022 requires a public authority to check its own subsidy against the law's principles before handing over the money, and does not require anyone else to check that assessment unless the sum passes £25 million, a threshold raised from £10 million in August 2025. The public backstop, a database entry and a one-month window to challenge it, only starts running once the authority itself decides to log the payment as a subsidy at all. The one Competition Appeal Tribunal judgment to test that backstop against a large, disputed award found no subsidy had been given, then added, unprompted, that the challenge would have failed regardless for arriving months after the tribunal's own deadline. Three documented mistakes: four stars.
Since 4 January 2023, every public authority in the United Kingdom giving a grant, loan guarantee, tax break or other financial assistance worth more than £100,000 has been operating under a law that asks it to judge its own conduct, then publish the result so someone else can check the homework. Over £156 billion has been recorded that way in three years. Only a fraction of it has ever been checked by anyone other than the body that gave it.
A duty to mark your own homework
The Subsidy Control Act 2022 puts the assessment in the granting authority's own hands. Section 12(1) states that a public authority "must consider the subsidy control principles before deciding to give a subsidy, and must not give the subsidy unless it is of the view that the subsidy is consistent with those principles" [1] (section 12(1)). Nothing in that subsection, or anywhere else in Part 2 of the Act, requires an external body to confirm the authority's view before the money moves. The seven subsidy control principles in Schedule 1, covering proportionality, distortion of competition and net benefit, are a checklist the authority applies to itself.
Independent, pre-award scrutiny exists, but it is reserved for the subsidies furthest from the routine. The Competition and Markets Authority's Subsidy Advice Unit must be consulted before a "subsidy of particular interest" is given: one worth more than £25 million outside a sensitive sector, or more than £5 million within one [5]. That non-sensitive-sector figure was £10 million until 4 August 2025, when the Subsidy Control (Subsidies and Schemes of Interest or Particular Interest) (Amendment) Regulations 2025 substituted "£25 million" for "£10 million" in the threshold regulations [2] (regulation 2). The change shrank the pool of subsidies that must clear an outside check before the fact, at the same moment the database was recording the regime's biggest year yet: £86.3 billion awarded in 2025 alone, of a £156.6 billion three-year total, according to the sponsoring department's own subsidy database [6] (paragraphs 3.3, 3.5).
A backstop the scrutinised party switches on
For everything below that line, the only public check is the transparency database and a limited window to challenge what it shows. Section 33(1) requires a public authority to "ensure that an entry in the subsidy database is made in respect of... a subsidy given by the authority", normally within three months of the decision [1] (section 33(1), (3)). Section 70(1) then gives "an interested party who is aggrieved by the making of a subsidy decision" the right to apply to the Competition Appeal Tribunal for a review [1] (section 70(1)). Section 71 ties that right to a tight clock: Rule 98A, inserted into the Competition Appeal Tribunal Rules 2015, requires a notice of appeal "before the end of one month beginning with the relevant date", which for most subsidies is "the transparency date", the date the authority's own database entry was made [3] (Rule 98A(1), (4)(b)).
That design leaves a gap the Act itself does not fill: what happens when a public authority decides, rightly or wrongly, that it has not given a subsidy at all, and so never makes a database entry to start the clock. The Competition Appeal Tribunal confronted exactly that gap in 2026 and said so plainly: "the SCA gives no express guidance as to what time limits might be appropriate in such circumstances" [4] (paragraph 178). The regulator that oversees the regime has flagged the same blind spot from the other side: its first statutory review found "limited transparency or external oversight for 'no subsidy' decisions... making it difficult to assess consistency in classification" [6] (paragraph 4.13). The step that switches on outside scrutiny, in other words, is a step the scrutinised authority takes, or does not take, itself.
The one case that tested it
That gap has been tested once. The New Lottery Company, Northern & Shell and The Health Lottery Elm applied to the Competition Appeal Tribunal to review a July 2023 decision by the Gambling Commission allowing Camelot, then the National Lottery's operator, to retain £70.21 million in lottery revenue for marketing rather than paying it into the National Lottery Distribution Fund [4] (paragraphs 2-4). The Gambling Commission had never made a subsidy database entry for the decision, because it did not consider the arrangement a subsidy at all [4] (paragraph 178).
In its judgment of 26 February 2026, the Tribunal dismissed the application on the merits, holding that the arrangement was consistent with normal market conditions under the Commercial Market Operator principle and so did not confer a subsidy at all [4] (paragraph 145). It did not stop there. Having found no statutory clock had ever started, the Tribunal built one by analogy to Rule 98A, and applied it against the applicants: they had known of the decision since 15 January 2025, from Camelot's own annual report, yet did not send a pre-action request until 19 March and did not issue proceedings until 8 May [4] (paragraphs 175-176). Proceedings, the Tribunal held, "should have been issued on or before 15 February 2025"; issued instead almost three months late, "had the Applicants been entitled to relief, we would have been inclined to refuse it" [4] (paragraph 181). A well-resourced challenger, alert enough to spot a possible £70 million subsidy in a published annual report, still found the backstop's own deadline standing between it and a hearing on the merits.
It is not a one-off. The regulator's own review counts six applications to the Tribunal and judgments in three of them across the whole three-year review period, and names the reasons stakeholders gave for the low number: "potential barriers in applications to the CAT arising from the concerns about the subsidy database... the one-month time frame to bring a challenge, and the costs involved" [6] (paragraph 1.28-1.29).
The claims, tested
| The document's own words | What the evidence actually shows | Verdict |
|---|---|---|
| A public authority "must consider the subsidy control principles... and must not give the subsidy unless it is of the view that the subsidy is consistent with those principles" (s.12(1)) [1] | Independent CMA pre-award scrutiny is mandatory only above £25 million (raised from £10 million, 4 August 2025) or £5 million in a sensitive sector [2] [5] | For the vast majority of £156.6 billion recorded, the authority is the only judge of its own compliance |
| The challenge clock runs from "the transparency date", the date of the authority's own database entry (s.71, Rule 98A(4)(b)) [3] | The Tribunal itself found "the SCA gives no express guidance" for a decision the authority does not classify as a subsidy at all, so no entry is ever made [4] | The scrutinised authority controls the step that starts outside scrutiny |
| Section 70(1) gives "an interested party who is aggrieved" the right to a Competition Appeal Tribunal review [1] | In the one judgment testing this against a large disputed subsidy, the Tribunal found no subsidy existed, then ruled the claim would separately have failed for arriving months after its own deadline; six applications and three judgments in three years overall [4] [6] | The one full test of the backstop shows how easily its own deadline closes a case |
The mistakes, counted
Independent pre-award scrutiny is reserved for a small share of what the regime covers, and that share just got smaller (1). The mandatory CMA referral threshold outside sensitive sectors rose from £10 million to £25 million on 4 August 2025 [2], while the database recorded its highest annual total yet, £86.3 billion in 2025 [6] (paragraph 3.5). Below the threshold, the Act sets out no independent check before the money is given.
The Act does not say what happens when an authority decides, on its own, that it has not given a subsidy (2). Because the challenge window runs from a database entry the authority itself must make, a decision the authority does not classify as a subsidy never starts that clock through any route the statute names, a gap the Competition Appeal Tribunal had to fill by analogy rather than by reading the Act [4] (paragraph 178), a gap the CMA's own review confirms is a live problem, not a hypothetical one [6] (paragraph 4.13).
The one real test of the challenge backstop shows the deadline can close a case on its own (3). In New Lottery Company v Gambling Commission, the Tribunal ruled there was no subsidy, then went further to hold that a £70.21 million challenge would have failed regardless for arriving almost three months past the deadline it improvised for the case [4] (paragraphs 181-182).
Credit where due
The transparency database is real and, for a young regime, unusually open: 33,950 subsidies and £156.6 billion of value are on the public record for anyone to inspect, a level of visibility the pre-2021 EU state aid regime never gave outside observers in the UK [6] (paragraph 3.3, 3.5). Where mandatory CMA referral does apply, it is a genuine independent check, not a rubber stamp, and the regulator's own review is candid rather than self-congratulatory about the parts that are not yet proven: it states plainly that it is "too soon to conclude whether the arrangements for challenging subsidy decisions are operating effectively" [6], rather than declaring the low case count a sign of success. And the Tribunal, faced with a gap the Act left open, chose to fill it with a deadline rather than leave "no subsidy" decisions permanently unchallengeable, even if that same deadline cut the other way in the first case to test it.
Verdict
Four stars, from three documented mistakes. The Subsidy Control Act was never built to send every public subsidy to an outside referee, and it does not claim to; the CMA's Subsidy Advice Unit exists for the largest and most sensitive awards, and does its job there. But for the £156 billion recorded below that line, the only check written into the law is the authority's own view of its own conduct, backed by a challenge window that cannot even start running until the same authority agrees a subsidy was given at all. When that design was tested for the first time against a large, genuinely disputed award, the challenger lost twice over: on the substance, and on a deadline the Tribunal had to invent because the Act itself never said what should happen. A regime that records £156 billion in public money and has produced three judgments to show for it is not a scandal. It is a duty that, outside a narrow band at the top, still runs on the honour system.
Sources
- Subsidy Control Act 2022, legislation.gov.uk, The National Archives, sections 12, 33 and 70
- The Subsidy Control (Subsidies and Schemes of Interest or Particular Interest) (Amendment) Regulations 2025, legislation.gov.uk, The National Archives, made 10 July 2025, in force 4 August 2025
- The Competition Appeal Tribunal Rules 2015, Part 5A, legislation.gov.uk, The National Archives
- The New Lottery Company Ltd and Others v The Gambling Commission, [2026] CAT 14, judgment, Competition Appeal Tribunal, 26 February 2026
- Subsidy control rules: quick guide to key requirements for public authorities, GOV.UK
- Report on the effectiveness of the Subsidy Control Act 2022 and its impact on competition and investment in the UK, Competition and Markets Authority, 25 June 2026