London Daily

Focus on the big picture.
Monday, Aug 24, 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
Prime Minister Andy Burnham to Give Ukraine Classified Storm Shadow Blueprints for Domestic Missile Production
UK Graduate Job Vacancies Plunge 45% to Lowest Levels on Record
Iranian Hackers Shut Down British Power Plant for Four Days in Landmark Cyber Attack
Novak Djokovic Reveals Relentless Self-Doubt and Rejects Retirement in New Documentary
Trump Imposes 50% Tariffs on Canadian Goods After Bilateral Trade Talks Collapse
First Bus Bars Unaccompanied Under-Sixteens From Evening Services in Stoke-on-Trent
Lithium-Ion Battery Fires Cost UK Waste Sector About One Billion Pounds a Year
Reform UK Proposes Lower Social Housing Priority for Foreign-Born Naturalised Citizens
UK Government Deploys AI Drones in Crackdown on Illegal Waste Dumping
EU Biometric Border Checks Cause Disruption for British Travellers and Freight Operators
UK Expands Voluntary Drug Treatment Programme for Sex Offenders to Twenty Prisons
CrossCountry Cancels Most Services After Major Power Failure at Control Centre
Met Office Warns El Niño Could Bring Severe Autumn Storms and Higher Food Prices
Resolution Foundation Says UK Productivity Growth May Be Stronger Than Official Data Suggest
Andy Burnham Proposes Giving Regional Mayors Greater Planning Powers
UK Government Overhauls Planning Rules to Accelerate Housing Near Transport Links
Russia Withdraws Ambassador to Britain and Warns of Retaliation Over UK Drone Supplies to Ukraine
Iran-Linked Hackers Blamed for Cyberattack That Shut Down UK Power Plant
Andy Burnham Pledges UK Support for Long-Range Missile Production in Ukraine
Australia Combines Indigenous Fire Knowledge With Satellite Tech to Combat Catastrophic Wildfires
Father and Son Jailed in Scotland Over £900,000 Airport Cannabis Smuggling Operation
UK Fraud Reports Surge Sevenfold as Criminals Exploit QR Codes in Parking Meters and Phishing Emails
Brighton Thrash Aston Villa in Four-Goal Opening Half as Manchester City Trail Bournemouth
Erin Patterson Appeals Triple Murder Convictions After Hotel Mixed Sequestered Jury With Prosecution
Bank of England Maintains Close Watch on Banks Amid Global Economic Uncertainty
Warm Weather and Tourism Support UK High Street Spending During Summer
Westminster Faces Continuing Political and Administrative Fallout From Epstein Files Release
UK Invests in Domestic Defence Drone Manufacturing to Strengthen Military Supply Chains
Around Five Million UK Households Face Higher Mortgage Payments by 2028
Bluetongue Virus Cases Rise Across England, Wales and Scotland
UK Government Holds First National Day for Victims and Survivors of Terrorism
Historic Summer Droughts Threaten UK Harvests and Put Further Pressure on Food Prices
UK Economy Holds Up in Second Quarter Despite Global Energy and Geopolitical Pressures
UK Opens National Artificial Intelligence Safety Testing Facility
UK Government Finalizes Plans to Bring Remaining Regional Rail Services Into Public Ownership
Environment Agency Imposes Record Penalties on Water Companies Over Illegal Sewage Discharges
Great British Energy Announces Offshore Wind Partnership in North Sea
UK Government Tightens Planning Rules to Accelerate Housing Development
NHS Launches Digital Overhaul to Cut Elective Care Waiting Lists
Bank of England Signals Interest Rates May Stay Higher for Longer as Inflation Pressures Persist
The rise and fall of Hui Ka Yan, China’s richest man
Woke: Britain Considers Plain Packaging for Cigars as Specialist Shops Warn of Industry Collapse
Britain's Public-Service Productivity Remains Below 2019 as £80 Billion Output Gap Fuels WFH Debate
Mandelson Epstein Case in Jeopardy as U.S. Files Stay Out of Reach
Prince Harry and Six Others Ordered to Pay £9.5 Million After High Court Defeat
Bank of England Holds Interest Rate at 3.75% as Inflation and Energy Risks Persist
UK AI Security Tests Find Autonomous Agent Attempting Malicious Code Injection
UK Economy Grows 0.4% in Second Quarter Amid Global Pressures
UK Joins European Allies in Condemning Israeli Settlement Plans in West Bank E1 Area
Multiple People Killed in A66 Collision Near Middlesbrough Involving Police Vehicle
×