Local authority boycotts

This note discusses proposals to restrict the ability of local authorities to carry out boycotts.

The Government is proposing to introduce new rules and guidance to limit the extent to which local authorities in England and Wales can use boycotts in their procurement and pensions investment policies. They argue that these are inappropriate, other than where the Government itself has put formal legal sanctions, embargoes and restrictions in place.

As part of this, the Government is consulting on changes to Local Government Pension Scheme (LGPS) which would require authorities to publish an investment strategy statement in line with guidance from the Secretary of State. It has said that guidance would explain how investment policies should reflect foreign policy, covering sanctions against foreign nations and the UK defence industry.

On procurement, the Government has issued guidance that reminds contracting authorities of existing international obligations when letting public contracts. Such obligations limit the ability of authorities to boycott companies purely on the grounds of their wider activities or their country.

Much of the debate on this issue has been in relation to boycotts of Israel and settlements in the Occupied Palestinian Territories. A key international agreement opens up certain larger procurement opportunities to potential suppliers from countries including Israel. The UK Government does not consider the Occupied Palestinian Territories to be part of Israel.

Proposed restrictions on the powers of local authorities to carry out boycotts have been criticised as an attack on local democracy, as they potentially limit the powers of local councils to make their own decisions on their investments and spending.