London Daily

Focus on the big picture.
Friday, Jul 10, 2026

UK government to allow councils to sever Russian contracts

UK government to allow councils to sever Russian contracts

Councils pushing to break ties had been prohibited from taking ‘non-commercial considerations’ into account

The UK government introduced legislation on Thursday to help councils, NHS trusts and other public bodies exit contracts with Gazprom and other Russian companies

Councils have been keen to withdraw from contracts amid concerns they were helping to fund Vladimir Putin’s regime. They had been prohibited from taking “non-commercial considerations” into account when procuring or terminating contracts, and they have a statutory duty to find the cheapest deal on behalf of the taxpayer.

Many councils had been forced to select Gazprom as a supplier because it offered the greatest value for money. They paid £29m to Gazprom from 2016 to 2021, data firm Tussell has said.

In March, the Cabinet Office asked central government to review all contracts with Russia and Belarus-linked firms and to consider terminating those contracts. This process has now been extended to local councils.

Councils including Merton and Telford and Wrekin have said they are keen to cut ties with Russia.

A government source said: “Local authorities are not obliged to terminate contracts, but our message is clear: Putin’s barbaric regime should not benefit from taxpayers’ money.”

The communities secretary, Michael Gove, will now write to all councils to make them aware of the changes.

The government has said any costs incurred from exiting contracts will have to be covered by existing budgets.

The west is attempting to choke off the Russian economy to damage Putin’s war coffers and fuel anti-war sentiment among the Russian public.

A Department for Levelling Up, Housing and Communities spokesperson said: “Businesses with links to Putin’s murderous regime should not benefit from taxpayers’ money.

“These measures will allow councils to terminate existing contracts – ensuring public money does not fund these organisations or Putin’s barbaric war machine.”

Research for the Guardian and Tussell shows that councils and NHS trusts have paid nearly £5m to Russian firms including Gazprom since the invasion of Ukraine under existing contracts.

NHS trusts – including Manchester University NHS foundation trust and the Southport & Ormskirk hospital NHS trust – have paid £3.2m. Councils including Portsmouth and Buckinghamshire have paid £1.6m.

Separately, a Treasury deadline to halt payments to Gazprombank and its subsidiaries for gas going from the UK to European Union countries is fast approaching. An original deadline of 21 April to halt payments was extended to 31 May last month. Many large Gazprom gas contract holders are based in the UK and help supply gas to the EU, which imports about 40% of its gas from Russia.

Gazprom’s UK arm is the largest non-UK supplier of gas to businesses and public bodies. Its market share was 22% before the invasion of Ukraine and it supplied gas to 178,000 sites, with contracts worth approximately £4bn, according to Capital Monitor estimates.

Newsletter

Related Articles

0:00
0:00
Close
Severe Heatwave Drives Dangerous Ground-Level Ozone Pollution Across Two Thirds of European Union
Westminster in Freefall as Farage's By-Election Gamble Triggers Broader Systemic Crises
Institutional Fractures and Political Volatility Reshape Britain's Domestic Landscape
Deadly Fire, Health Emergencies and Political Upheaval Shape a Volatile Global News Cycle
UK Energy Strategy Focuses on Storage and Offshore Wind to Support Renewable Transition
Regional Governments Gain Greater Role in Britain’s Infrastructure and Economic Strategy
Britain Strengthens Technology Sovereignty Through Tougher Artificial Intelligence Competition Rules
UK Government Expands Artificial Intelligence Use Across Public Services Despite Privacy Debate
UK Universities Warn of Financial Pressure After Sharp Fall in International Student Enrolment
Welsh Government Completes Rail Nationalisation With One Point Five Billion Pound Modernisation Plan
Northern Ireland Records Export Growth as Companies Benefit From Dual UK and EU Market Access
Greater Manchester Launches Two Billion Pound Plan to Convert Empty Commercial Sites Into Housing
National Grid Connects Europe’s Largest Battery Storage Facility in Yorkshire
UK Defence Ministry Plans Royal Navy Autonomous Fleet Deployment to Indo-Pacific
Scotland Approves Europe’s Largest Floating Offshore Wind Project Near Aberdeen
Competition and Markets Authority Blocks Forty Billion Pound Technology Deal Over AI Security Concerns
UK Launches Five Hundred Million Pound Artificial Intelligence Network for National Health Service Diagnostics
Bank of England Signals Possible Interest Rate Cuts After Inflation Falls Below Target
UK Government Unveils Major Wealth Tax Reform to Fund National Health Service Infrastructure Expansion
Flight Instructor Jumped to His Death — Student Landed the Plane: "You Know What You Need to Do"
The Physical and Electronic Barriers Disrupting Domestic Wireless Networks
France and Morocco Open World Cup Quarter-Finals as Collina Defends Refereeing
Prince Harry Suffers Major Court Defeat in Legal Battle Against Daily Mail Publisher
Bonnie Tyler, Welsh Singer Behind Total Eclipse of the Heart, Dies at 75
Barclays and PwC Report Examines Economic Opportunities from Financial Asset Tokenisation
Pound Sterling Strengthens as Investors Anticipate Further Bank of England Rate Increases
British Business Bank Invests Twenty-Seven Million Pounds in Kraken Technology Defence Expansion
UK Business Secretary Peter Kyle Backs State Investment Strategy Inspired by US Approach
UK Electricity System Issues Margin Notice as Heatwave Tightens Evening Supply Outlook
Labour Leadership Contest Opens as Andy Burnham Emerges as Expected Sole Candidate
Tech Pulse: The Future of AI and Screen Culture
Global News Briefing: Escalating Geopolitical Tensions and Corporate Shakeups
Global News Brief: Escalating Conflicts, Public Health Crises, and World Cup Drama
Rare Early Copy of US Declaration of Independence Found in British Archive
Cornish Language Revival Gains Momentum Through Schools and Community Programs
UK Authorities Face Criticism Over Prisoner Early Release Safeguards
Clacton By-Election Set After Nigel Farage Resigns Seat to Trigger Contest
Government Agencies Review Long-Term Fiscal Risks from Aging Population and Low Productivity
UK Heatwaves Expose Pressure on Public Transport and Housing Infrastructure
UK Government Prepares Welfare Review Amid Debate Over Personal Independence Payment Reform
UK Government Expands Rapid Endometriosis Testing Across NHS Services
Vistry Group Issues Profit Warning as UK Housing Market Faces Continued Pressure
Virgin Media Receives Record Twenty-Eight Million Pound Fine Over Contract Cancellation Failures
Office for Budget Responsibility Warns UK Public Finances Face Long-Term Pressure
UK Watchdog Warns Regional Income Gap Has Barely Narrowed in Three Decades
IMF Raises United Kingdom Growth Forecast as Inflation and Energy Pressures Ease
UK Government Launches Regulatory Reform Bill to Speed Up Commercialization of Innovation
Prince Harry Loses Privacy Lawsuit Against Daily Mail Publisher After High Court Rejects Claims
Federal Financial Framework Shifts as Treasury Launches Universal Savings Program for Minors
Jet2 Reports Strong Summer Travel Demand as Bookings Rise Seven Percent
×