Councils will be allowed to terminate contracts with companies that have “strong links to the states of Russia and Belarus”, according to draft secondary legislation.
The legislation was laid in Parliament last week and seeks to give local authorities exceptions to section 17 of the Local Government Act 1988.
The section prohibits councils from considering non-commercial considerations in their procurement decisions, including the termination of contracts.
The new legislation is part of the government’s response to the Russian invasion of Ukraine.
Michael Gove, Secretary of State for Levelling Up, said in a letter to council leaders: “As we have done since the invasion of Ukraine, this is another area in which the United Kingdom – both in central and local government – can demonstrate unified action the Russian and Belarusian regimes.”
Many councils have contracts with Russian-owned oil and gas company Gazprom. Merton Council confirmed the cancellation of its £1m agreement with the supplier back in March.
Cllr Ross Garrod, leader of Merton Council, told Room151: “We welcome the government’s move to introduce legislation allowing councils to exit contracts with morally questionable companies, an issue we first highlighted in March.
“Merton was able to escape its deal with Gazprom without incurring any potential legal costs, but other councils were less fortunate.
“Our intention in calling for a change in the law was to safeguard us and other local authorities from similar situations in the future, and we’re happy to see that the Secretary of State has acted on this.”
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