State aid: guidance

Guidance to help public sector bodies to understand and comply with state aid rules.

Please be aware, as of 01 January 2021, the EU State aid information on these pages is no longer applicable in the UK and should be used for reference only.

European Structural Funds and state aid

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 SFs 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 an SFs 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.

Furthermore they should ensure that full records of all individual awards are kept for inclusion in the annual reports that the State Aid Team submits to the EC.

The approved schemes covering the 2014 to 2020 Structural Funds programmes are:

1. European Structural and Investment Funds 2014-2020 SMART Growth (SA.43048)

2. European Structural and Investment Funds 2014-2020 Inclusive Growth (SA.43103)

3. European Structural and Investment Funds 2014-2020 Sustainable Growth (SA.43144)

More information:

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