13 July 2020
- SHG to introduce new Subsidies Policy from 1 August
- Policy will provide an overarching framework for Government subsidies
- Rigorous and robust process of appraisal before a subsidy is approved
St Helena Government (SHG) will introduce a new Subsidies Policy from 1 August 2020, having been approved by Executive Council on Tuesday, 7 July.
SHG provides a number of subsidies within the community and in 2019/20 spent almost £7 million on various subsidies. The new Subsidies Policy will provide an overarching framework for Government subsidies and will be used across the organisation in developing individual subsidies. Individual subsidies developed and approved under the Policy will need to clearly set out their intentions, aims and objectives.
The Subsidies Policy will:
- Ensure a fair, clear and consistent approach to the determination, allocation and award of subsidies
- Define the Governance arrangements for any subsidy approved
- Ensure that the policy intention behind any subsidy is clearly articulated to key stakeholders
- Ensure the provision of all financial support through subsidies is consistent within the intervention principles and any other requirements of the Policy
- Ensure that the subsidies are targeted and are directed to the right sector, organisation or people within the community who need access to a particular set of goods or services.
Deputy Financial Secretary, Nicholas Yon, said:
“The aim of having in place an overarching Subsidies Policy is to ensure that there is a robust framework within which these financial interventions can be considered. SHG is moving away from a subsidy being defined by the organisation to which that subsidy is given towards a model whereby the subsidy is defined by the outcome to which that subsidy aims to achieve.
“This change ensures the availability, affordability and access to specific commodities and services and will advance and further the strategic objectives and long term goals of SHG and the Island.”
Before any subsidy is approved there will be a rigorous and robust process of appraisal where the subsidy must:
- Support the achievement of one or more of the national goals of the Ten Year Plan or one or more of the goals under the Sustainable Economic Development Plan
- Stimulate growth and sustainability in a particular sector with measurable economic or social benefits
- Be accountable for deliverables and transparent in their application and use of public funds
- Have clearly defined timeframes and an Exit Strategy agreed
- Be targeted to the people or sectors that really need it.
The SHG Subsidies Policy 2020 is now available on the Public Information, Reports and Policies page of the SHG website: https://www.sainthelena.gov.sh/government/public-information/
Notes to Editors
SHG will only provide financial intervention in the form of a subsidy when there are:
- Missing or incomplete markets – where goods and services are not provided by the private sector leading to a failure to meet a need for a public good
- Negative externalities – where one or more consumer or producer causes an effect on third parties
- Monopoly power – if a producer has control over 70% of the market and there is a risk of abuse of power through, for example, eliciting overly high prices
- Unstable markets – when markets become unstable and the Government deems market stability important to achieve economic development goals.
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13 July 2020