State Aid - An Introduction Stephen Martin Scottish Government State Aid Unit

Compatible Aid Article 107(2) & (3) Guidelines and Frameworks Approved schemes General Block Exemption Regulation (GBER) De minimis

Article 107 (2) a) Aid of a social character b) Aid to remedy damage by natural disaster/exceptional occurrence c) Aid to compensate for division of Germany

Article 107 (3) (a) Economic development of areas with abnormally low living standards (b) Promotion of project of common European interest or serious disturbance to economy (c) Development of certain economic activities/areas (d) Promotion of culture/heritage (e) Other categories as specified by EC

Guidelines & Frameworks Research & Development & Innovation Regional Aid Environmental Protection Risk Capital Rescue & Restructuring Sale of Public Land and Buildings Services of General Economic Interest

Approved Schemes Property Development SME Investment Historic Environment Regeneration Credit Unions Renewables Obligation R&D&I

GBER Regional Investment SME Investment & Employment Consultancy & Trade Fairs Entrepreneurship Training Environmental Protection R&D&I Risk Capital Disadvantaged or Disabled Workers

GBER If providing aid under GBER, how should this be done? LAs are the lead partner in LAGs – body able to administer public funds Administratively, LAs should ensure any aid is compliant with GBER Overall responsibility for ensuring aid given compliantly should rest with Managing Authority All Scottish LAs have wide-ranging GBER cover

De minimis €200k over 3 year, rolling, fiscal period Limit per recipient, not per project Useful if no other cover Can be difficult to administer

Notification Commission carry out detailed assessment Considered on face of Treaty Benefits must outweigh distortions of competition & effect on trade. Can take > 6 months

Cumulation! If an undertaking involved in economic activity is receiving State aid from several sources, towards the same eligible costs, this aid must be cumulated; and The total amount of aid received by the recipient in respect of these eligible costs must not breach the appropriate State aid ceilings for the activity. LEADER funding must also be cumulated in these calculations.

If State aid is not considered? Aid can be halted Any illegal aid must be repaid, with compound interest, by the recipient Potential action from aggrieved competitors - possibility of recovery order and damages Undermines UK Government's commitment to tighter State aid control and reduction in aid

Summary Consider and assess State aid at an early stage in project applications Consult the Managing Authority if you are not sure, MA may consult SAU Ensure that there is State aid cover to provide your funding Be aware of the risks of implementing unapproved aid