UK councils warned of 'severe penalties' of fossil fuel divestment

Critics say central government guidance forbidding local authorities from divesting is financially risky, politically unacceptable and open to legal challenge

Local authorities have been warned that they will face "severe penalties" if they divest from fossil fuel holdings or boycott oil, coal or gas firms in procurement tenders, the UK government has said.

Local councils, government agencies and public sector bodies must adopt environmental and social policies consistent with central government, says the guidance sent out by the Department for Communities and Local Government (DCLG).