The UK's post-Brexit subsidy control regime, as underpinned in the Subsidy Control Act 2022 (the 2022 Act), has now been in place for more than three years. Since then, the Subsidy Advice Unit of the Competition & Markets Authority has produced many (non-binding) analyses of subsidies to which it has been referred by awarding authorities, either on a voluntary basis or a mandatory basis. Those provide a useful insight for authorities as to the legal and technical requirements that must be satisfied for a proposed subsidy to comply with the requirements of the 2022 Act.
There has, however, been far less formal guidance (and fewer binding decisions) from the Courts about the scope of public authorities' rights and obligations under the 2022 Act. The 2022 Act entitles a party that is aggrieved about the granting of a subsidy to apply to the Competition Appeal Tribunal (CAT) for a review of the decision. That right has only been exercised on a few occasions; on 24 July 2025, the CAT issued its 2nd judgment concerning the application of the 2022 Act.
There have been just four cases lodged with the CAT concerning subsidy control with status as follows:
- The Durham Company Limited v Durham County Council - judgment issued 27 July 2023
- Mr Aubrey Weis v Greater Manchester Combined Authority - judgment issued 24 July 2025
- National Lottery v Camelot - in process.
- Bristol Airport v Welsh Ministers - in process.
The second of these, the Greater Manchester Combined Authority (GMCA) judgment, will be helpful to those in the public sector involved in providing loan finance and also of interest to those in receipt of such funds. The case focuses on whether GMCA met its obligations under the 2022 Act in lending two separate loans, amounting to £140 million. The lending was related to development of new housing, a sector of significant focus across the UK.
In particular, the GMCA had concluded that the loans it provided did not constitute a subsidy on account of being made on a commercial basis in line with the Commercial Market Operator principle (CMO). Section 3(2) of the 2022 Act confirms that when this principle is met there is no subsidy. Mr Weis challenged that the loans were not made on a CMO basis, and in accordance with the 2022 Act and associated statutory guidance. In addition to the 2022 Act, the case considers the application of the Subsidy Control (Gross Cash Amount and Gross Cash Equivalent) Regulations 2022 (the 2022 Regulations). The CAT ruled in favour of GMCA. The judgment is extensive, running to some 98 pages, see our initial observations on the judgment below.
Initial Observations
The judgment follows on from the Durham Waste case as a second useful insight into how matters under the 2022 Act will be dealt with by the CAT and in particular how the CMO principle is applied.
Ultimately, the CAT agreed that GMCA's loans had been made on a CMO basis, in accordance with the 2022 Act and in line with the statutory guidance, with summary comment within the judgment being:
"(para 221) Underlying the application is an allegation that because of a possible cost relationship with Mr Whitaker, the Renaker Group was being provided with loans at unduly favourable rates. The Tribunal is satisfied that this is clearly not the case, The 2024 Renaker Loans went through a proper process and the terms and rates considered by persons with significant experience in development loans. The Tribunal has carefully scrutinised all the material and submissions and is satisfied that there was no subsidy in this case".
As further comment, the Tribunal's judgment did indeed carefully scrutinise all areas and the judgment presents a useful analysis of:
- the governance and commercial check and diligence processes used by GMCA and their adequacy for ensuring appropriate and robust decision taking/subsidy control compliance;
MFMac Comment: The specific processes adopted and observed by GMCA will no doubt be of interest to many public authorities in the context of considering the adequacy and robustness of their own processes.
- the legal background to and parameters by which the CAT will analyse the compliance of public authorities when examining matters of subsidy control;
MFMac Comment: Of interest, the judicial review parameters of decision making come to the fore, with the judgment ultimately reflective of GMCA being in a position to evidence the rationality of its approach, processes and decision:
"(para 203) The Tribunal does not consider that in all the circumstances the GMCA had failed to have regard to the Guidance. They could have done more, but in not doing so, this did not constitute a breach of duty as in not taking specific steps suggested in the Guidance as the approach taken was rational and the rates adopted were justified and by no means appear to be low and unduly favourable rates outside those that other commercial lenders would most probably be willing to lend at."
- the case law backdrop to the area of CMO and how the provisions of the 2022 Act and the statutory guidance are to be interpreted; and
- the application in practice of the 2022 Regulations alongside the 2022 Act.
In short, a must-read judgment for those involved in ensuring compliance with the 2022 Act within public authorities, particularly where administering loans and/or relying on the CMO principle.
The judgment will also be useful for the understanding of developers interacting with public authorities, particularly those involved in the areas of housing and regeneration.
