The results of round three of the Levelling Up Fund have been announced, with 55 local projects provisionally awarded a share of £1billion of funding.
The projects have been selected from the high quality bids that missed out on funding in round two and the 2023 Spring Budget. Projects range in location and nature, including revitalising various town centres around the country, restoring heritage in Somerset, constructing an electronic and photonics park in Paignton, transforming transport links in Blackpool and the Plymouth and South Devon freeport. A full list of projects is available here.
The Department for Levelling Up Homes and Communities will support public authorities with the validation and onboarding process. Until the process is completed, including subsidy control checks, all funding is provisional.
In terms of subsidy checks, all public authorities receiving funding from round three and granting subsidies, or setting up subsidy schemes, for local projects need to comply with the Subsidy Control Act 2022. The Act provides that subsidies, financial or in kind, that confer an economic advantage on enterprises and are capable of affecting competition or investment, must comply with subsidy control principles.
In broad terms, subsidy control principles require public authorities to identify a policy objective to remedy a market failure or address an equity rationale. All subsidies and subsidy schemes must be proportionate to the policy objective and minimise impacts on competition and investment. Additional principles apply were the aims of the subsidy, or subsidy scheme, relate to energy and environmental matters. Further information is available on our subsidy control bitesize page.
Public authorities receiving funding from round 3 will also need to follow the public procurement process before awarding contracts, to implement the works and projects and carefully consider how to minimise risks and liabilities under the contracts awarded. It may also be necessary to negotiate access with landowners and occupiers and mitigate impacts on residents and businesses.
Ashfords has advised extensively on the distribution of grant funding under rounds one and two of the Levelling Up Fund, including procurement, contractual arrangements and negotiations to implement projects, as well as compliance with subsidy control.