Under the Structural Funds Programmes (SFs), there may be State aid present in any of the awards made by public authorities – including the SFs themselves. Where this is the case, these awards must comply with EC State aid rules and the Managing Authority has ultimate responsibility for ensuring that this is the case.
First, the status - whether State aid or not - of all public monies involved in SFs projects needs to be considered. To do this the four key State aid tests need to be applied to both the public match funding and SFs (or, should a project for any reason not contain a public match funding element, then the SFs alone). Note that when paying out public monies as State aid, the public match funding and SFs element must be cumulated and respect the aid intensity limits of the relevant State aid scheme or block exemption regulation. It is important to note that these State aid limits may be less than the Structural Funds maximum intervention limit and that eligible costs, etc, under an appropriate State aid instrument may also differ from any generic, SFs eligibility criteria.
There may be State aid at different levels of a Structural Fund project. State aid therefore needs to be considered from the level of the initial grant recipient through to the level of the end beneficiary.
Where public monies do constitute State aid, then both the public match funding and the SFs element must comply with the EC’s State aid rules and be provided as compatible aid where possible. Public match funders and those paying out Structural Funds should satisfy themselves that, when an individual project funding award constitutes State aid, it is paid to the end beneficiary under an EC approved State aid scheme or in accordance with the EC's General Block Exemption Regulation, whichever is appropriate - and that full records of all individual awards are kept, which will be included in the annual reports that the State Aid Unit submits to the EC.
The Scottish Government is currently working with Structural Funds Partners to develop a new programme for the period 2014-2020 and new State Aid schemes to provide cover for these activities will be notified to the European Commission in due course. Details will be published here when available.
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