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Levelling Up Fund: Subsidy Control options increased by DLUHC Subsidy Scheme

24 January 2023

The Government has announced that 111 projects have been successful in bidding for the second round of the Levelling Up Fund and will share £2.1bn of public funding.  DWF provided specialist support to circa 20% of the successful bids.  

The £4.8 billion Levelling Up Fund is the Government's flagship regeneration initiative, providing grants to support capital investment projects across the United Kingdom.  The Government had set this up as a challenge fund, whereby public authorities bid in to the fund to secure investment. 

The Government has announced that 111 projects will now receive Levelling Up Fund awards. The fund was highly competitive with 525 applications received.  Unsuccessful bids will be able to bid in for the third round of the Levelling Up Fund, when £1bn is expected to be available.  The successful bids include projects as diverse as the new Eden Project North in Morecambe, road access improvements around Dover, improved leisure facilities in Enniskillen, an innovative AI campus in Blackpool, rail improvements in Cornwall, works to regenerate the Lower Swansea Valley and the construction of the prestigious Gateshead Quays arena and conference centre.

Subsidy Control was one of the fund criteria and all bids were evaluated for compliance. Since the bids were submitted, Subsidy Control law has changed as a result of the Subsidy Control Act 2022 coming into force (our introduction to the new rules can be found here).  

However, shortly before the new regime came into force DLUHC published a £3.1 bn Levelling Up Fund Scheme.  By adopting and publishing this scheme prior to the new provisions of the Subsidy Control Act 2022 taking effect, DLUHC enabled it to be classed as a legacy scheme and thereby the expectation will be that by using the scheme, the new rule from the Act on notifying subsidies in excess of £10m to the CMA may be avoided (NB. the scheme covers particular Levelling Up Fund subsidies up to £20m in value).  

We anticipate that DLUHC will seek to process many, but not all, of the awards under this scheme. This will be the case where the specific project satisfies the relevant conditions of the scheme and the scheme has satisfied the Subsidy Control requirements that were in place when the scheme was established.

DWF Law LLP is a leading law firm for Public Sector matters with offices in Newcastle, Manchester, London, Liverpool, Leeds, GlasgowEdinburgh, Bristol, Birmingham and Belfast.

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