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Fisa de lucru State Aid Glossary

Accountability The obligation of one person or body to answer for the performance or the duties assigned usually to the line with a delegated authority or financed by another body. Aid intensity ceilings These are limits set by the Commission on the level of regional (and related) aid permitted (as a percentage of the eligible costs) that may be given to an undertaking. They can relate to the assisted areas map, which shows the level of aid permitted in different regions of the UK. Approval When member states notify the Commission of their intention to give State aid in a particular way, they seek approval that the aid mechanism is in line with the Commission’s interpretation of the State aid rules. An approval will set out the terms and conditions of the aid mechanism on which a scheme may be based. Block Exemption A Commission Regulation which sets out the circumstances where certain aid can be granted without prior Commission approval. Where an aid measure complies with the conditions set out in a Block Exemption Regulation only a summary information sheet must be submitted to the Commission when the aid is granted. The Block Exemptions also contain additional annual reporting conditions.” Clawback This is when some or all of the grant is repaid to the body who awarded it. The award of a grant typically contains a clawback condition, which means the public sector can recoup aid if it finds that the recipient has not kept to the terms and conditions of the award. It can also recover the aid if the award turns out to have been more than the minimum necessary. For example, clawback may occur where actual values and/or costs differ from those identified in the appraisal Cumulation rules Where aid is granted concurrently under several aid schemes, the cumulation rules stop the total value of all the aid exceeding the aid intensity ceilings. The rules can be found at:

European Commission State Aid site
Dereliction aid approval This approval allows aid to be given to restore derelict land where market failure prevents this from taking place. For State aid purposes, derelict land can include land which is polluted. Environmental Regeneration approval This approval allows aid to be given to improve the environment by reclaiming derelict or potentially derelict land and providing a cover of vegetation. Subsequent uses of the site may include public open spaces, nature conservation areas and playing fields. The approval does not cover support for redevelopment of land for ‘hard end’ uses, such as office and commercial buildings, or housing. Gap funding Gap funding means public support, e.g. a grant, which fills the gap between development costs and end value, to make a project economically viable. It is typically applied to projects in areas that are experiencing deprivation and/or market failure. GOs Government offices: one for each English region. They are the link between the Regional Development Agencies and central government. Their responsibilities include collating information from RDAs on their use of the land and property State aid approvals Historic environment regeneration approval This approval allows aid to be given to support the repair, restoration and rehabilitation of designated historic buildings, conservation areas, ancient monuments and historic parks and gardens Housing gap funding approval This approval allows aid to be given, in England, to support the provision of owner-occupied and private rented housing. See also ‘gap funding’ above Initial investment An investment in fixed capital relating to the setting-up of a new establishment, the extension of an existing establishment, or the starting-up of an activity that involves a fundamental

diversification or modernisation). is available for the negotiation of the sale Medium-sized enterprise Medium-sized enterprises are defined as organisations that have fewer than 250 employees and have either: an annual turnover not exceeding 40 million euros. It is the most widely used benchmark or reference rate for short term interest rates and is used to set a level of interest (as a percentage) when the public sector offers a loan to an undertaking. . not having an industrial or commercial character. or an annual balance sheet total not exceeding 27 million euros and less than 25% of the company is owned or controlled by a non-SME or combination of non-SMEs NDPBs Non-departmental public bodies such as the Housing Corporation. or regional or local authorities. managerial or supervisory boards. Joint venture In this guide. and has a legal status financed. where the partnership combines the resources (such as finance or particular commercial expertise) of public and private sector bodies. or other bodies governed by public law subject to management supervision by public bodies with administrative. Large-sized enterprise Large-sized enterprises are defined as organisations that have more than 250 employees and have either: an annual turnover exceeding 40 million euros. Notification A Member State notifies the Commission of its intention to give State aid in a particular way in order to clarify that the aid mechanism is in line with the Commission’s interpretation of the State aid rules. etc. English Partnerships. in the London interbank market. in marketable size. Once created. Initial investment does not include plant and machinery. regional or local authorities or by other bodies governed by public law. by the state. prudently and without compulsion”. See also approval and scheme Public sector organisation The Commission defines this as any body that: is established for the specific purpose of meeting needs in the general interest. PPPs are treated as entirely commercial organisations. Marketvalue The new edition of the RICS ‘Red Book’ defines market value as: “The estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably. having regard to the nature of the property. that market conditions permit orderly disposal and that a normal period. more than half of whose members are appointed by the state. The assumptions are that the property is publicly exposed to the market. for the most part. or an annual balance sheet total exceeding 27 million euros and more than 25% of the company is owned or controlled by a non-SME or combination of non-SMEs LIBOR (London InterBank Offer Rate) The LIBOR is compiled by the British Banking Association and is the rate of interest at which banks borrow funds from other banks.change in a product or process of an existing establishment (through rationalisation. Publicprivate partnerships (PPPs) A PPP is an example of a joint venture. a joint venture is where a public sector organisation enters into a contract with either another public body or a private organisation to deliver a particular project or service.

It does not usually include public sector organisations (but see above). An undertaking can be a commercial organisation that is trading within a Member State – or with other Member States – in a competitive market. and have either: an annual turnover not exceeding 7 million euros.g. It acts as a proxy for a “commercial” rate of interest in soft loans from Public Sector Organisations. decontamination and demolition works Small enterprise Small enterprises are defined as organisations that have fewer than 50 employees. Scheme A State aid notification to the Commission sets out conditions under which aid may be granted and which organisations will administer the aid. or an annual balance-sheet total not exceeding 5 million euros and less than 25% of the company is owned or controlled by a non-SME or combination of non-SMEs SME Small or medium-sized enterprise – see separate sections above on each Special purpose vehicles These are typically public/private partnerships set up to deliver a particular outcome. A Commission approval will refer either to an “aid scheme” or an “individual aid” to a single recipient Site preparation Site preparation includes site investigation. RDA and local businesses Undertakings An undertaking. is one that carries on an economic activity. usually housing associations. for the purpose of the EC Treaty.RDAs Regional Development Agencies are organisations set up to deliver the government’s regeneration strategy. registered with and monitored by the Housing Corporation. . The current UK reference rate can be found at European Commission's State Aid website RSLs (Registered social landlords) Landlords. reclamation. Reference Rate The Reference Rate is a rate of interest calculated by the Commission for each Member State annually. The RDAs are funded by central government but manage their budgets independently. They are treated as public sector bodies for the purposes of State aid. recipients of social security benefits). Nor does it include individuals who are receiving aid for a non-commercial purpose (e. improvement. Urban Regeneration Companies are a good example – usually including the local authority.