Now that the that the UK has left the EU, it no longer has to follow the EU's rules on subsidies – known as state aid – although the trade deal signed in December 2020 does require the UK to have a subsidy control system of some kind.

In a new Institute for Government report, we find that the government is right to aim for more flexibility in the rules around subsidies. But if the new system is to be a success, more must be done to give governments and local authorities across the country the confidence to offer subsidies.