HANSARD
Local Government (Exclusion of Non-commercial Considerations) (England) Order 2022
- Considered in Grand Committee
- Moved by
- That the Grand Committee do consider the Local Government (Exclusion of Non-commercial Considerations) (England) Order 2022.Relevant document: 3rd Report from the Secondary Legislation Scrutiny Committee
- My Lords, this order was laid before your Lordships’ House on Monday 25 May 2022, under Section 19(3) of the Local Government Act 1999, for approval by a resolution of each House of Parliament. The order was considered and approved in the other place on Monday 20 June.The illegal invasion of Russian forces into Ukraine has shocked the world and has been met by unprecedented global condemnation. Soon after the invasion, many local authorities also gave their own public condemnation of the Russian state’s action. They were clear they did not want local taxpayers’ money to be used to fund this reprehensible attack, and many noted their own intentions to break contracts with Russian-controlled companies. Local authorities are, however, subject to Section 17 of the Local Government Act 1988, which prohibits “non-commercial considerations” playing a part in commercial decision-making. Such non-commercial considerations include, at Section 17(5)(e) of the 1988 Act,“the country or territory of origin of supplies to, or the location in any country or territory of the business activities or interests of, contractors”.With regard to Russia and Belarus, this element of the Act is untenable.This limitation was laid out in the Cabinet Office’s policy procurement note 01/2022, which was issued in March. In this advisory note, organisations in scope—government departments, their NDPBs and executive agencies—were asked to review their contract portfolios to identify Russian and Belarusian prime contractors and consider the termination of these contracts. The PPN particularly noted that the Government were actively considering a solution for local government to enable councils to follow the Cabinet Office’s advice. Council leaders have rightly been calling for action, requesting a flexible approach for those councils that wish to divest themselves of any dependence on Russian state-owned companies. My right honourable friend the Secretary of State wrote to leaders on 11 March, preparing them to consider their exposure to Russian and Belarusian-owned companies.Your Lordships will recall that we held a debate on 24 March regarding Gazprom UK. In that debate, noble Lords made clear their desire to amend public procurement rules to align local authorities with the rest of the public sector, so I am pleased that today we are considering this order, which will enable us to disapply the provisions I have referred to at Section 17(5)(e) of the Local Government Act 1988. The order will enable best-value authorities and parish councils in England, if they so wish, to terminate both proposed or subsisting public supply or works contracts, in accordance with the terms of the contract, where either: first,“the country or territory of origin of supplies to the contractor”is Russia or Belarus; or, secondly,