What is State Aid?
What's on this site
The State aid rules were put in place to protect the free market by ensuring that state resources do not distort competition or give an unfair advantage. State aid is considered to be any advantage given by a State to an undertaking in their domestic economy where such an aid may benefit particular industrial sectors or individual undertakings and affect trade in the European Union. The European Commission considers that such aid is contrary to the notion of the European Single market and prohibits it.
How do you know if aid is present?
There are four tests that must be met for State aid to be present
Aid is granted by a Member State or through a State resource;
The aid favours certain undertakings or production of certain goods;
It is aid which distorts or threatens to distort competition: and
The aid affects trade between Member States.
If these four tests are met, the relevant support is State aid which must be notified to the European Commision if it is not already specifically approved or exempted from the notification.
Who does it affect?
Any support provided by an arm of the government, as well as direct support from central government, can be classed as State aid. Thus, any grants or other forms of support from Government Offices, Regional Development Agencies, NDPBs, English Partnerships, Urban Development Corporations, Local Authorities or other public institutions funded by State resources are potentially State aid.
Implications for land and property transactions
The European Commission considers that the property industry can operate internationally, across European Community borders. This means that any project a property developer enters into with public sector support could be subject to State aid rules as it is capable of affecting trade between Member States.
What we do
DCLG's State aid team leads on State aid rules as they impact on DCLG's policy responsibilities, in particular regeneration, redevelopment of land and property and housing. For other queries contact the Department for Trade and Industry (DTI).
