Challenging a public authority's approach

Overly cautious interpretation of the subsidy control regime by some public bodies can create unnecessary barriers for voluntary organisations, particularly where activity has been designated as “economic” without clear justification. In some circumstances, the lack of consistency has led to grant funding being restricted.

If an organisation disagrees with a public authority’s decision, and how they are treating financial assistance in relation to subsidy control, it is important that they ask in writing for their reasoning.

Organisations may find citing the UK and Scottish Government Guidance if the authority’s conclusions are inconsistent with it, since the authority has a statutory duty to have regard to the Guidance.

Where a voluntary organisation believes it is delivering a service in the public interest that would not otherwise be provided, or would not be provided on the terms required, under normal market conditions, it may also wish to ask whether SPEI treatment has been considered.

If an organisation does not feel that the public authority reasoning fits with the legislation then they may wish to engage with their local Third Sector Interface or the subsidy control unit within the Scottish Government for advice or assistance, or, if necessary, to seek independent legal advice.

The 2022 Act provides a mechanism for subsidy control decisions to be challenged before the Competition Appeal Tribunal, however this only applies where a subsidy has been given (or where the challenger alleges that it has).

A decision to refuse to provide funding, whether on the basis that it is a subsidy or otherwise, can only be challenged in court by way of a judicial review.