Councils, NHS trusts and a university in Greater Manchester are caught up in Russian deals worth millions of pounds, it has been revealed.
As Russian bombs rain down on Ukraine, and the resulting humanitarian crisis worsens, the UK's links to Russia have come under the spotlight.
Much of the focus in the UK has centred on Vladimir Putin's allies in London, but tough questions are also being asked here in Greater Manchester.
READ MORE:
Several organisations across the region are currently tied into contracts with the Russian gas giant Gazprom, prompting scrutiny over how they became entangled in a chain some claim stretches all the way to the Kremlin.
Formed in 1989 during the fall of the Iron Curtain, Gazprom was privatised in 1993, but the Russian government still owns more than half of its shares.
Among major recent contracts won by the company is a £3.6m deal to supply gas and electricity to the University of Manchester. A spokesperson for the university said it was "actively reviewing" the contract and would be looking to cut ties with Gazprom.
Another of the organisations most reliant on the state-owned firm is Stockport Council, which has a three-year deal worth £2.5million.
According to the council's website, it ends this autumn but bosses say they are “seeking clarity from the Government as to what steps we can take as we move forward”, adding that they are “exploring” their options and will begin a retendering exercise “at the earliest opportunity”.
Meanwhile, Salford City Council has a deal with Gazprom worth £1.8m over two years, which is up for renewal in June.
The M.E.N. reported in June 2020 that Salford awarded Gazprom a contract to supply the city’s schools, libraries and leisure centres for two years.
He added that Salford City Council did not want to renew the deal and was "fully supportive" of economic sanctions against Russia. However, he urged a “flexible approach” for councils who “should wish to divest of our dependence on Russian state-owned companies”.
Mr Dennett wrote: “Our contract will be up for renewal in June, and I do not wish for public money to be spent towards the income of the Russian state during the present military crisis in Ukraine.
“However, at present under the current round of sanctions and/or rules, such considerations would seemingly not be considered legally relevant in assessing Gazprom’s suitability for winning the next tendering exercise (or not).”
Manchester City Council has paid at least £1.18m to Gazprom this financial year, according to spending records published on the authority's website.
A council spokesperson said the current contract is due to expire at the end of the month, adding that it was “looking at alternative gas providers”.
The town hall first signed a £3.6m, one-year deal with Gazprom, back in 2018.
The deal saw the company supply gas to more than 350 public sector buildings, including leisure centres, offices and the majority of Manchester’s schools.
Other councils in Greater Manchester also had access to Gazprom supplies as part of the contract. Bolton Council claims the £60,695 it has paid to the energy firm this year came under the terms of such a deal.
Manchester City Council has already moved to cut ties with Russia, having suspended a 'friendship agreement' with St Petersburg following the country's invasion of Ukraine.
The agreement with Russia's second largest city - home to about 4.6 million residents - was Manchester's "oldest formal link" and dates back to an agreement signed in 1962.
Gazprom has also received almost £2m from NHS trusts across Greater Manchester over the last 12 months.
Bolton NHS Foundation Trust were the top spenders at £738,095, according to public procurement data providers Tussell.
Figures also show that Manchester University NHS Foundation Trust paid the energy giant £631,941 while Wrightington, Wigan and Leigh NHS Foundation Trust Bolton NHS Foundation Trust splashed out £347,515.
Meanwhile, Tameside and Glossop Integrated Care NHS Foundation Trust spent just over £200,000 on Gazprom services.
All four trusts have been approached for comment on whether they intend to cut ties with Gazprom, which is the largest commercial gas supplier in the UK.
Total public sector spend in the UK with Gazprom between 2016 and 2021 was £107 million, according to Tussell.
The organisation said its analysis showed that of this figure, £77 million or 72pc came from the NHS and £29m or 27pc from local authorities.
Since the extent of the UK's reliance on Gazprom has come to light, the GMB union has called for a ban on public sector contracts being awarded to the firm.
Gary Smith, GMB General Secretary, said: “Serious questions need to be asked about how Greater Manchester's schools and hospitals have become entangled in the energy supply chain that fuels Putin’s war machine."
Mr Smith described the contracts - which predate the Russian invasion of Ukraine - as 'an indictment of the failure of UK energy policy to prioritise affordable and secure supply'.
“There should be no new public sector contract awards to Gazprom, and we need an urgent government review into whether alternative suppliers can take on existing contracts," he added.
Gazprom's presence in Greater Manchester has not come about overnight.
Gazprom Marketing & Trading, the energy giant's global trading business, has had an office in Manchester city centre since entering the UK market 15 years ago.
It moved into its current base at the city's First Street development back in 2017, where it employs more than 280 people.
Gazprom's landlord at the No 8 First Street development was Greater Manchester Property Venture Fund - part of the Greater Manchester Pension Fund - until last year, when the building was sold to an Israeli property firm.
Gazprom Marketing and Trading Limited has operated in the UK since 1999. Over the last five years, it has paid a total of £1.2 billion in dividends back to its parent firm, company documents reveal.
Away from the energy supply market, the Greater Manchester Pension Fund has announced it intends to freeze all investments linked to Russian-based companies amid the invasion of Ukraine.
The fund, which is run by Tameside council, has more than 375,000 members and is the largest local government pension scheme in the UK.
It manages a fund of nearly £30 billion, which is invested across a broad spread of assets including public equity, bonds, property and alternative assets.
The fund states it has no direct Russian holdings due to ‘significant’ environmental, social and governance risks of investing in the country’s companies.
However around 0.2.pc of the GMPF’s portfolio is connected to Russian holdings.
Following the invasion of Ukraine, the fund’s investment managers have frozen all existing indirect holdings in Russian-domiciled investments.
They say they recognise the ‘current lack of market for selling these assets and the fiduciary duty to act in the best interests of the fund’s members and the taxpayer’.
The decision comes after the Local Government Pension Scheme Advisory Board advised local government pension funds to consider the implication of sanctions targeting Russia on their portfolios.
A Government spokesperson said: “We will 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.
“The UK is in no way dependent on Russian gas supply and our highly diverse sources of gas supply and a diverse electricity mix ensures that households, businesses, and heavy industry get the energy they need.”
A spokesperson for Gazprom said: "We do not comment on commercial matters or contractual arrangements with individual customers."
READ MORE: 'Incredible' Manchester welcomes Ukrainian journalist who fled Kyiv with food, flowers and hugs
