What is State Aid?
State aid is taxpayer-funded resources to provide assistance to one or more organisations.
What’s special about State Aid?
Public funding should not be used to distort the market by giving individual organisations an unfair advantage.
State aid requires us to have a consistent policy on how we select partners. We should not break any state aid rules, especially if payments to individual organisations are below the de minimis level of 200,000 euros over 3 years.
Why does State Aid apply to CAST and Catalyst?
Our main funders, particularly DCMS and NLCF, require us to follow state aid rules and this is part of our grant agreement with each of them.
What does this mean for me?
We need to ensure that the charities who are in receipt of the support and services you are providing are not in breach of any state aid rules, and so we need to be aware of the value of the service you are providing. We therefore expect the price you are charging us to be a reasonable one based on market forces, and so it is neither set at an artificially low figure in order to try to win the application, nor an artificially high figure which is more than you would normally charge for the same work. Please therefore ensure that the price you charge for this work is no different to the price you would charge any other charity.
What does this mean for CAST and Catalyst?
We must ensure that our procurement process for grantees and contractors is transparent and rigorous. Generally, the way to do this is to ensure that multiple organisations have the opportunity to receive grants and contracts from us.
For all recipients of our funding we must document how they were selected, and if this was done without competition we must note the reasons for selecting this specific organisation. We should be doing this for both grantees and service providers to ensure that public funding is not distorting the market by providing unfair advantages to specific organisations.
This is particularly important where the recipients of our funding are involved in trading, as this would be unfair to their competitors.
Where we continue to support the same organisation because it is considered to be “the best” in its field, we should consider how we can help other organisations join that field.