Local authorities and others affected by subsidy control will be interested in the above judgment.
Durham Company Limited v Durham County Council concerned an alleged subsidy decision made by Durham County Council (the “Council”). Durham Company Limited (trading as “Max Recycle”) brought a challenge under section 70, claiming that the Council had failed to consider the subsidy control principles. Section 12 of the Act confers a duty on public authorities to consider the principles before awarding a subsidy. The alleged subsidy decision in question concerned the interrelation between the Council’s household and commercial waste collection operations.
Competition Appeal Tribunal refused the claimant, Max Recycle, permission to appeal. It was unanimously held that no subsidy arose. This follows the Council’s success in an earlier hearing which found that they had not breached the subsidy control rules in terms of how they structured their waste collection services.
𝗧𝗵𝗲 𝗧𝗿𝗶𝗯𝘂𝗻𝗮𝗹’𝘀 𝗳𝗶𝗻𝗱𝗶𝗻𝗴𝘀
Section 2 of the Act provides that a “subsidy” requires financial assistance which is “given… by a public authority” and which “confers an economic advantage on one or more enterprises”.
The Council was plainly the “public authority”, but Max Recycle could not identify any person, except the Council, who was the receiving “enterprise”. The Council conducted both household and commercial waste collection services as ‘Durham County Council’ (i.e. not through an arms-length company). Therefore, the alleged subsidy involved the Council awarding financial assistance to itself. The CAT was “in no doubt” that a public authority cannot subsidise itself. As such, the CAT ruled that there was no “subsidy”. The application was accordingly dismissed.
In2 the bargain 