Services of Public Economic Interest (SPEI)
The Act contains provisions for Public Authorities to provide subsidies for Services of Public Economic Interest (SPEI). These are essential services provided to the public and may include, for example, postal services, social housing, and certain transport networks, particularly in rural or less populated areas of the country. Without these subsidies, these services would not be supplied in an appropriate way or may not be supplied at all by the market.
When is a service considered to be an SPEI?
The public authority giving the subsidy must be satisfied that the amount of the subsidy is limited to what is necessary to deliver the SPEI services, with regard to:
- costs in delivering the SPEI services, and
- reasonable profits to be made in doing so.
SPEI subsidy requirements
Should a public authority wish to provide a subsidy to an enterprise for the purpose of the provision of a SPEI, the public authority must comply with certain substantive and procedural requirements in order to provide the SPEI subsidy. In particular, the public authority must:
- be satisfied that the subsidy is limited to what is necessary to deliver the service
- ensure that the SPEI subsidy is assessed against the Subsidy Control Principles
- ensure that the subsidy is provided in a transparent manner
- ensure that the subsidy is regularly reviewed (at least once every 3 years)
- comply with the duty to include information in the Subsidy Control Database.
When is public spending on an SPEI considered to be a subsidy?
Public authorities should consider the Four limb test and whether each limb has been met in order to identify it as a subsidy and use public spending on a SPEI.
In particular, the service provided in the public interest must entail an economic activity to be considered a SPEI.
SPEI Assistance (SPEIA)
SPEI subsidies may be considered to constitute SPEI Assistance (SPEIA) if the total amount of Minimal Financial Assistance (MFA) or SPEIA given to an enterprise does not exceed £725,000 over the applicable period.
Further information
- State aid and subsidy control after EU Exit
- UK Subsidy Control/State aid flow chart
- Four limb test - is it a subsidy?
- Minimal Financial Assistance (MFA)
- Streamlined Route
- Principles Route
- The Subsidy Control Act 2022
If you seek further advice and assistance please contact the Subsidy Control Advice unit