State Aid is a European Commission consideration of public assistance given to undertakings on a discretionary basis and having the potential to distort competition and affect trade between Member States of the European Union. An undertaking is defined as any entity, regardless of its legal status, which is engaged in economic (commercial/competitive) activity relating to a market in comparable goods or services. A grant reduces an undertaking’s current expenditure, and so can be regarded as State Aid.
On 19 March 2020, the European Commission announced a temporary framework to enable Member States to further support the economy in the COVID-19 outbreak.
This temporary framework allows aid to be granted to undertakings facing difficulty as a result of the COVID-19 outbreak, and extends the limit of support to €800,000 in the form of grants, repayable advances and tax or payments advantages (aid to the fishery and aquaculture sector should not exceed €120,000 per undertaking, and should not exceed €100,000 per undertaking in the primary production of agricultural goods).
The UK Government submitted a UK-wide umbrella scheme COVID-19 Temporary Framework for UK Authorities’ which was approved under the Temporary Framework allowing UK public authorities to grant aid as quickly and as flexibly as possible. Full details can be found in this guidance for local authorities and other public bodies which provides full details on this. Local authorities should ensure that the applicable conditions are met, including obtaining the information required for transparency reporting purposes.
Support under this framework should only be offered to properties that can demonstrate they were not in financial difficulty on 31 December 2019. Councils must therefore ensure they hold this information from grants applicants. See paragraph 18 of regulation (EU) No 651/2014 of 17 June 2014 for the definition of a “firm in difficulty”.
The Temporary Framework covers aid granted until 31 December 2020.