Sanctioning Gazprom would legally protect councils, Salford mayor says

Gazprom currently supplies Salford City Council's non-domestic gas needs

Sanctioning Russian energy firm Gazprom would make it easier for councils to exclude it from the usual contract tendering process, a mayor has said.

Salford's Paul Dennett said the city council did not want to renew a deal with Gazprom but its option to bid for tender was "enshrined" in UK rules.

He has called on the government to clarify if councils can lawfully refuse to deal with state-owned firms.

The government said it would work closely with councils to support them.

Councils across England are seeking to cut ties with Gazprom in protest at the invasion of Ukraine.

On Thursday, Suffolk County Council said it would break away from its £10m contract with the firm, while Manchester City Council said it was "looking at alternative gas providers" for when its contract expires at the end of March.

Wealden District Council also told the BBC it was looking at its "options and obligations" and Telford and Wrekin Council said it was "urgently" looking to sever ties.

'Grounds for exclusion'

In a letter to Communities Secretary Michael Gove, Salford's Labour mayor said he fully supported the UK's ambitions to to use "sanctions and others financial measures" to "inflict devastating consequences" on Russia.

However, he said state-owned organisations were "woven inextricably" into the delivery of council services and their involvement in bidding for tenders was "enshrined in UK public procurement regulations".

He said financially, the partly state-owned firm scored "well ahead of the next-nearest rivals" when Salford City Council sought its supplier of non-domestic gas in June 2020.

While the authority did not want renew the deal in the summer, moral concerns "would seemingly not be considered legally relevant" in assessing the firm's "suitability for winning the next tendering exercise", he added.

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Pointing to the 1988 Local Government Act and the Public Contracts Regulations of 2015, he said the council did not believe that "any of the specified grounds for exclusion" would allow it to bar Gazprom, which meant that "legally, there may be no way to limit bids".

He asked Mr Gove if the government had "any intention to sanction Gazprom", as such a move would make it easier for councils to refuse to do business with the firm.

A government spokesman said it would "work closely with councils and other public bodies to ensure they are able to comply with the financial and investment restrictions on Russia and will engage with them on what support they need to do this".

He added that the UK was "in no way dependent on Russian gas supply".

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