Agenda item

To create a subsidy scheme for directly allocating grant funding from Tendring District Council to Citizens Advice Tendring (CAT) as part of the core funding under a Service Level Agreement (SLA) and the Mental Health Hub. An approved Subsidy Scheme will ensure the Council is compliant with the Subsidy Control Act 2022 by providing justification for direct granting funding to CAT should the funding fall under the new legal definition of a subsidy.

 

To agree an updated SLA with CAT for 2023/24 and to provide funding in relation to the Mental Health Hub.

RESOLVED that -

 

(a)    the Addressing Health Inequalities – Advice, Support and Mental Health Subsidy Scheme for 23/24, assessed as being consistent against the Seven Principles as set out in Appendix A to item A.3 of the report of the Leader of the Council & Portfolio Holder for Corporate Finance and Governance, be approved;

 

(b)    the Assistant Director (Partnerships), in consultation with the Leader of the Council and the Monitoring Officer, be authorised to finalise the administrative requirements for the production of the Subsidy Scheme in accordance with the Act and Statutory Guidance, prior to any awards;

 

(c)    subject to (a) and (b) above, Citizens Advice Tendring be awarded direct grant funding of £144,000 and £28,000 for 2023/24 and notification of such is published on the Government’s database;

 

(d)    a Service Level Agreement with Citizens Advice Tendring (CAT) from 1st April 2023 until 31st March 2024 be entered into on the terms and conditions as set out in the updated agreement shown in Appendix B to the aforesaid report; and

 

(e)   a review of grant funding across the Council be approved and a report following the review considering the options available during 2023/24 be presented to Cabinet in readiness for 2024/25.

 

Earlier on in the meeting, as reported under Minute 16 above, and in the interests of transparency and for the public record, Councillor Placey (Partnerships Portfolio Holder) had stated, in relation to this matter that she had, until recently, been the Chairman of the Trustees of the CAT.

 

Cabinet considered a report of the Leader of the Council & Portfolio Holder for Corporate Finance and Governance (A.3), which sought:-

 

(i)     to create an Addressing Health Inequality – Advice, Support And Mental Health Subsidy Scheme 2023/24 and grant funding directly to Citizens Advice Tendring (CAT) as part of the core funding under a Service Level Agreement and the Mental Health Hub; 

 

(ii)    an approved Addressing Health Inequality – Advice, Support and Mental Health Subsidy Scheme which would ensure that the Council was compliant with the Subsidy Control Act 2022 by providing justification for direct granting funding to CAT should the funding fall under the new legal definition of a subsidy; and

 

(iii)   to agree an updated Service Level Agreement (SLA) with Citizens Advice Tendring (CAT) for 2023/24 and to provide funding in relation to the Mental Health Hub.

 

Cabinet was reminded that the Subsidy Control Act 2022 (“the Act”) had come into force in January 2023 and set out the UK’s subsidy control rules for public authorities.  A ‘subsidy’ was where a public authority provided support to an enterprise that gave them an economic advantage, meaning equivalent support could not have been obtained on commercial terms.  Subsidies could give recipients an unfair advantage over their competitors or be an inefficient use of public money if they did not bring about net positive change.

 

Members were informed that the Council was held responsible to consider the effect of the funding that they would award.  Subsidies should only be given in the public interest to address a market failure or equity concern, and if awarded, should be done in a way that minimises any negative impact on competition and investment to help ensure that public money was used in an effective and efficient way.

 

The Government’s introduction to subsidy control stated: “To minimise these risks and increase the likelihood that subsidies achieve positive outcomes, the UK subsidy control regime regulates subsidies given in the UK to prevent any excessively distortive or harmful effects.  The regime is designed to be flexible, to allow public authorities to support business growth and innovation, promoting competition and investment in the UK. Under the regime, public authorities can deliver subsidies that are tailored to local needs to deliver their strategic priorities.”

 

It was reported that the UK subsidy control statutory guidance, issued by the Secretary of State under Section 79 of the Act, in November 2022 and updated in June 2023, explained public authorities’ legal obligations under the regime and provided a framework for designing and giving subsidies in a way that was consistent with the Act.  In Chapter 3, the guidance advised that, if a financial assistance measure met the legislation definition of a subsidy, it would need to be assessed against the seven subsidy control principles.  Subsidy schemes must be assessed against the subsidy control principles and could not be made unless the public authority decided the scheme was consistent with the principles.

 

The seven subsidy control principles (“the Principles”) were:

Principle A: Common Interest

 

Subsidies should pursue a specific policy objective in order to remedy an identified market failure or address an equity rationale (such as local or regional disadvantage, social difficulties or distributional concerns).

 

Principle B: Proportionate and Necessary

 

Subsidies should be proportionate to their specific policy objective and limited to what is necessary to achieve it.

 

Principle C: Designed to change economic behaviour of beneficiary

 

Subsidies should be designed to bring about a change of economic behaviour of the beneficiary. That change, in relation to a subsidy, should be conducive to achieving its specific policy objective, and something that would not happen without the subsidy.

 

Principle D: Costs that would be funded anyway

 

Subsidies should not normally compensate for the costs the beneficiary would have funded in the absence of any subsidy.

 

Principle E: Least distortive means of achieving policy objective

 

Subsidies should be an appropriate policy instrument for achieving their specific policy objective and that objective cannot be achieved through other, less distortive, means.

 

Principle F: Competition and investment within the UK

 

Subsidies should be designed to achieve their specific policy objective while minimising any negative effects on competition and investment within the United Kingdom.

 

Principle G: Beneficial effects should outweigh any negative effects

 

Subsidies’ beneficial effects (in terms of achieving their specific policy objective) should outweigh any negative effects, including in particular negative effects on competition and investment within the United Kingdom, and international trade and investment.

 

Cabinet was advised that the direct funding Tendring District Council proposed to grant to Citizens Advice Tendring (CAT) was considered a ‘subsidy’ for the reasons set out within the report, and consequently, had been assessed against the Principles using the recommended framework and template, as set out in Appendix A to the Leader’s report.  To be able award any financial assistance directly to CAT, Cabinet must be satisfied that the proposed Scheme was consistent with the Principles.

 

Members were informed that the Addressing Health Inequality – Advice, Support and Mental Health Subsidy Scheme 2023/24 (“the Scheme”) would seek to provide a comprehensive advice and support service and a Mental Health Hub provision, which was freely accessible to residents via trusted providers on a competent basis delivering a wide range of support to an appropriate quality standard.   The Scheme would operate for one year.

 

It was felt that this Scheme met the Principles, as it sought to achieve a policy objective within the Council’s Corporate Plan i.e. to deliver health and wellbeing for effective services and improved public health; it was proportionate to deal with increasing demand for services by a local trusted organisation and it would positively affect the recipient’s activity to ensure they continued to provide a comprehensive advice and a Mental Health Hub service.

 

It was also considered that, without funding, the recipient would not be able to meet the demand for services to the public and it was an appropriate policy instrument as the Council did not provide such services, and this activity would be delivered by a competent, trusted and accessible organisation.  It was not considered that the subsidy would have a negative effect on competition, as there were specific requirements around comprehensive, competent local free and impartial provision by a trusted organisation, which residents were happy to regularly access.  The benefits outweighed any negative effects as there was increasing demand for the service to help address health inequalities in an area of high deprivation and there were specific requirements needed for delivery of this provision.

 

Cabinet was made aware that the Subsidy Control Act 2022 imposed transparency obligations on public authorities awarding subsidies to promote accountability and enable the public to see how money was spent.  Public authorities must ensure that the details of subsidies they awarded, or subsidy schemes they made, were uploaded to the UK subsidies database (GOV.UK - Public user search page (beis.gov.uk)). It was therefore recommended that the Addressing Health Inequality – Advice, Support and Mental Health Subsidy Scheme 2023/24 be approved using the completed subsidy control assessment as evidence. Subject, to its approval, the proposed funding for CAT would then be awarded, and published on the UK subsidies database on behalf of Tendring District Council in order to be compliant with the Act when granting the funding.

 

Members were assurred that any grant of funding to CAT would be consistent with previous years, in that it was supported by an annual Service Level Agreement, also agreed by Cabinet.  This arrangement supported the provision of free, confidential and impartial advice to residents across a wide range of issues.  Since 2013/14, the core grant awarded each year had been £144,000, payable in two instalments of £72,000.

 

That funding would also support a Mental Health Hub that CAT had operated for a number of years which was a single point of access for a holistic assessment and intervention for vulnerable residents who had poor mental health. The Hub provided a broad range of support for those who attended including an opportunity for volunteering which might help lead to employment. In order to grant this funding, TDC must ensure that in doing so it would be compliant with subsidy control regulations.

 

Data produced by CAT showed that during the past year, although client numbers had remained the same, the number of issues dealt with by telephone and email had risen by 57% (8765 to 13,739) as people arrived with multiple and complex issues for example around energy and the cost of living crisis and the ongoing effects of the pandemic. In addition, 4000 residents had chosen to drop-in at their face-to-face venues.

 

CAT had also operated the Mental Health Hub (“the Hub”) for eight years, which was a single point of access for a holistic assessment and intervention for vulnerable residents who had poor mental health.  The Hub was funded by Tendring District Council, Essex County Council, the Police, Fire and Crime Commissioner and the Integrated Care Board.  The lead commissioner was the Integrated Care Board and they provided and held the Service Level Agreement on behalf of all the other funders.  The contribution from Tendring District Council was £28,000 per year.

It was acknowledged that the Act might have wider implications across the Council and therefore, it was recommended that the Council undertook a review during 2023/24 of all of its grant funding to establish whether it wished to produce a wider Subsidy Scheme covering a range of initiatives and functions and to consider alternative options.

 

In order to:-

 

(1)    ensure that the Council is following its legal obligations under the Subsidy Control Act 2022 and statutory guidance;

 

(2)    enable CAT to continue to support Tendring residents and offer value for money; and

 

(3)    enable a review to be undertaken of all grant funding and present options for consideration.

 

It was moved by Councillor M E Stephenson, seconded by Councillor Baker and:-

 

RESOLVED that -

 

(a)    the Addressing Health Inequalities – Advice, Support and Mental Health Subsidy Scheme for 23/24, assessed as being consistent against the Seven Principles as set out in Appendix A to item A.3 of the report of the Leader of the Council & Portfolio Holder for Corporate Finance and Governance, be approved;

 

(b)    the Assistant Director (Partnerships), in consultation with the Leader of the Council and the Monitoring Officer, be authorised to finalise the administrative requirements for the production of the Subsidy Scheme in accordance with the Act and Statutory Guidance, prior to any awards;

 

(c)    subject to (a) and (b) above, Citizens Advice Tendring be awarded direct grant funding of £144,000 and £28,000 for 2023/24 and notification of such is published on the Government’s database;

 

(d)    a Service Level Agreement with Citizens Advice Tendring (CAT) from 1st April 2023 until 31st March 2024 be entered into on the terms and conditions as set out in the updated agreement shown in Appendix B to the aforesaid report; and

 

(e)   a review of grant funding across the Council be approved and a report following the review considering the options available during 2023/24 be presented to Cabinet in readiness for 2024/25.