When Has A Subsidy Been Granted? Insights From Recent Cases

As with any new legislative regime, there are a number of key questions surrounding the interpretation and scope of the Subsidy Control Act 2022 (the Act) and the ability to challenge subsidy decisions of granting bodies. Recent judgments are now addressing a number of these issues, as discussed below. 

The Act came into force on 4 January 2023. One of the key changes it introduced was the emphasis on private enforcement to ensure that subsidies are properly awarded. Under the Act, subsidies no longer require formal approval from an external body. Instead, granting bodies can self-assess whether a subsidy has been granted and if so, whether it is appropriate to provide the subsidy following a “principles assessment”. Large subsidies must be referred to the Subsidy Advice Unit, but ultimately it is still for the granting body to determine how to proceed following that referral process. Third parties can challenge alleged breaches of the Act by bringing a claim before the Competition Appeals Tribunal (the CAT).

Although there have been a relatively small number of cases under the Act, some recent challenges have provided important guidance on what measures should be considered a subsidy, when a subsidy decision may have been taken, and therefore when any challenge can be brought. We have summarised some of these key developments below. 

What is the scope of the CAT’s authority to determine whether a subsidy has been granted?

One of the first subsidy cases to be decided by the CAT was Weis v Greater Manchester Combined Authority(on which see our previous article). In that case, the CAT found that no economic advantage had been conferred upon a property developer by the Greater Manchester Combined Authority (GMCA), as the terms of the loans it had granted were deemed to satisfy the Commercial Market Operator (CMO) principle.

In reaching this decision, the CAT reiterated that the standard of review to be applied when reviewing the decisions of granting bodies under the Act is that applied in UK judicial review proceedings, i.e. whether there has been a manifest error or procedural unfairness, or the decision was otherwise irrational. It was not for the CAT to conduct a full merits review of the decision itself. 

This CAT decision was appealed and is the first case to reach the Court of Appeal under the Act. Although the grounds of appeal were narrowly focused, the Court of Appeal ruling provides important guidance on the UK’s developing subsidy control framework and the remit of the CAT. 

In summary, the grounds of appeal did not directly challenge the application of the CMO principle, but instead challenged the approach taken by the CAT in assessing whether the Act had been breached. In particular, Mr Weis argued that the CAT had erred by first considering whether the loans by the GMCA constituted a subsidy (a prerequisite to considering the lawfulness of any subsidy “decision”), and that the CAT was “not entitled to decide for itself whether the Loans constituted a subsidy but was confined to conducting a review of the Decision on domestic public law principles.”¹

The Court of Appeal’s judgment focused primarily on this first ground of appeal, ultimately holding that “as a matter of statutory construction, it is for the CAT itself to determine whether the public authority has given a subsidy before it has jurisdiction to review whether that decision was lawfully made.” The Court of Appeal did not consider that the CAT was limited to judicial review principles when making that assessment. Rather, it is only once the CAT is satisfied that a subsidy has been granted (and that it has jurisdiction to review the decision), that judicial review principles apply to the subsequent review of the decision to grant the subsidy. Having determined that key jurisdictional question, the Court of Appeal concluded the other grounds of appeal fell away. 

When is a subsidy decision taken and when does time start running for an appeal?

Prior to the Weis hearing in the Court of Appeal, the CAT issued its decision in Thomas v Durham County Council. In Thomas, the key question was when a subsidy “decision” had been taken, as that in turn dictated when a challenge could be brought. 

The CAT confirmed, by reference to the Act, that there exists a clear distinction between the “decision” to give an individual subsidy and the actual “giving” of the subsidy. Whilst the decision to give and the giving of the subsidy may in theory take place at the same time, this will not always be the case. The CAT concluded the following. 

• The “decision” to give a subsidy is a formal and final decision made by a public authority to grant a subsidy (acknowledging that further administrative steps may be necessary in order to embody the decision in an enforceable agreement).
• The “giving” of a subsidy occurs at the point at which there is a grant of an “enforceable right” to the financial assistance, and not necessarily at the transfer of funds, which may in fact take place at a later stage. 

The CAT also confirmed that a provisional, or “in principle”, decision to grant a subsidy does not amount to a reviewable decision. This is because it is only once a final decision is taken that the terms applicable to the measure will be confirmed, and an assessment as to whether it constitutes a subsidy or meets the CMO principle can be undertaken.

Applying these principles to the facts, the appeal was struck out for lack of jurisdiction. The challenge had been brought too soon. In contrast, in Weis,the parties agreed to a stay until the “final decision" had been taken. 

The question of when a subsidy decision has been taken may not be a point most potential appellants focus upon. However, it is vital to approach this gating question carefully, as challenges to subsidy decisions must be brought within a month from the “relevant date”. In most cases, this begins to run on the date on which the applicant was, or should have been, aware of the decision. 

An appellant that brings its challenge too early is at risk of strike out on the basis that no final decision has been taken (as per Thomas), but if they leave it too long, the challenge is vulnerable to being struck out on the basis that the time limit has expired. Those considering bringing a challenge need to be alive to this dilemma, and may wish to make use of their right to request pre-action information from the public authority (under section 76 of the Act) to better understand whether and when a reviewable decision has been taken. 

The Court of Appeal in Weis was referred to the CAT’s decision in Thomas, but the latter was not given any further consideration in the Court of Appeal judgment.

When is a subsidy established by primary legislation and therefore immune from challenge? 

Shortly after the decision in Thomas, the CAT handed down its judgment in the Zenobē Energy Limited v Gas and Electricity Markets Authority (GEMA) appeal. Zenobē concerned a challenge to an alleged subsidy decision, raising the same issue on timing as considered in Thomas, as well as providing guidance on when a subsidy should be considered to be established by primary legislation and therefore immune from challenge. 

The appeal related to GEMA’s cap and floor scheme, which was designed to encourage investment in certain long-term energy storage assets, by providing a guaranteed minimum revenue stream and a limit on revenues for certain qualifying projects. This scheme had a statutory footing in section 10P of the Electricity Act 1989, which empowered GEMA to establish and operate a scheme to achieve such investment goals. Zenobē argued that certain documents published by Ofgem in September 2025, which included various assessment, project, and financial frameworks (the September Documents), and an open letter published by Ofgem in February 2026 (the February 2026 Letter) constituted a subsidy decision, and that GEMA’s decision to establish the subsidy scheme did not comply with the Act.

Similarly to Thomas, the CAT held that, on the facts, the September Documents were merely preparatory documents and publications that acted as a “step in the development of the scheme, not the making of the scheme itself.”² Within the September Documents, the CAT did not identify a formal and final decision to grant a subsidy, and instead considered that there were various “significant decisions” in relation to the scheme that had yet to be made, including determining the capacity to be supported and the terms of any licence conditions. Accordingly, it followed that there was no subsidy to be challenged under the Act. For similar reasons, the CAT also considered that the February 2026 Letter did not constitute a subsidy decision.

Furthermore, after the September Documents were issued, but before the February 2026 Letter was published, the Planning and Infrastructure Act 2025, which included provisions directing Ofgem/GEMA to implement the scheme, received Royal Assent. The Act (at section 78 and Schedule 3) expressly disapplies the general right to challenge a subsidy before the CAT in circumstances where the subsidy is made by means of an act of Parliament.

The claimants argued that, as the Planning and Infrastructure Act gave discretion as to how the scheme should be implemented, the scheme was not “made” by an act of Parliament. The CAT disagreed. It considered that the claimants' interpretation would make the fulfilment of a duty imposed by Parliament on a public body contingent on the public body’s view as to whether it is consistent with the subsidy control principles. The public body could find itself in a situation where it concludes that it must not implement the scheme – contrary to the policy decisions of Parliament. Accordingly, the CAT concluded that the scheme did fall within the section 78 exception, and that the CAT did not have jurisdiction to review the February 2026 Letter.

Conclusion

The first wave of subsidy appeals has primarily focused on procedural issues relating to the ability to challenge decisions under the Act, and underscores that successfully challenging a subsidy requires a careful assessment of how the facts fit within the CAT's procedural framework. A successful appellant must identify if and when a subsidy “decision” has been taken, act within the tight one-month limitation period from the relevant date, and take account of factors that may result in the decision falling outside the CAT's jurisdiction altogether (e.g. on CMO grounds, or where the scheme is established by primary legislation).

On the other hand, public authorities should ensure that their decision-making processes clearly distinguish preparatory steps from final subsidy decisions, and that robust assessments under the Act are undertaken at the appropriate stage. This remains a developing body of case law, which should be kept under review. 

Footnotes

1. Weis v Greater Manchester Combined Authority [2026] EWCA Civ 825, paragraph 59.

2. Zenobē v Gas and Electricity Markets Authority [2026] CAT 53, Paragraph 78. 

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