Audit Office sees improvements at Sellafield

22 June 2018

The UK National Audit Office (NAO) says the Nuclear Decommissioning Authority has improved its performance at the Sellafield nuclear site, but still has a long way to go in decommissioning and cleaning up the facility, according to a new report, “The Nuclear Decommissioning Authority: progress with reducing risk at Sellafield”, published on 20 June.

NDA’s total expenditure 2017-18 was GBP3.3bn ($4.3bn), including GBP1.2bn in revenue, and 61% of this was spent at Sellafield. NDA is responsible for operating, decommissioning and cleaning up 17 nuclear sites under the 2004Energy Act, and eight of the 10 most hazardous facilities are at Sellafield. The estimated undiscounted total cost of the NDA’s clean-up mission up to 2120 is GBP121bn, of which Sellafield accounts for GBP91bn.

There has been a 70% reduction in radioactive content in the pile fuel storage pond at Sellafield since nuclear fuel was removed in March 2016. There are 14 major projects at Sellafield with expected lifetime costs of more than GBP100m each or that are novel or contentious and the total expected spend on major projects currently in design or under construction is GBP6bn. Sellafield Limited’s spend on major projects in 2017-18 was GBP483m and the sunk costs of three major projects cancelled since 2012 after NDA found more cost-effective strategies is put at GBP586m.

The report’s key findings noted that NDA’s estimate of the total future decommissioning costs has stabilised after rising for 10 years, but remains uncertain.  The NDA considers that the estimate increased because it had developed a better understanding of the scale and nature of the risks and challenges at the site. Since 2015-16, the NDA has made progress in meeting significant milestones in reducing high hazards in its legacy ponds and silos. Progress on the pile fuel cladding silo programme means it is now expected to be emptied by 2030, six years earlier than suggested in 2015. However, an analysis of all four legacy pond and silo programmes show that NDA delivered less work than the NDA expected since 2011-12. 

Nevertheless, NDA has reduced expected delays in delivering most of its major projects. In 2017-18 most projects delivered their schedule of work continuing an improving trend that started in 2014-15. The NDA expects its major projects to cost more than originally estimated, but less than expected in 2015. Nine projects under construction or recently completed were then expected to cost 60% more than had been budgeted at the design stage. In 2018, this has been reduced to 29% more than budgeted (GBP913m over budget). This is partly attributed to the new management model introduced in 2016, which replaced the ‘fee-earning pressure’ of the previous model with a focus on progress towards reducing high hazard and risk. A more integrated approach to risk assessment has also helped.

As to future progress and challenges, the NDA and central government agree faster progress with reducing high hazard at Sellafield is not constrained by funding. The Treasury does not limit funding available to the NDA to reduce risks deemed ‘intolerable’ by the Office of Nuclear Regulation. However, progress is constrained by other factors including non-financial constraints such as the physical limitations of the site; management capacity for decision-making; transport links to and from Sellafield; and workforce productivity. NAO identified two further factors that pose risks to NDA’s mission and which undermine accountability: the governance and assurance system around the NDA is not optimised and is complex; and there is a lack of clarity and agreement about the NDA’s role, which has increased following the 2016 decision to bring Sellafield into the NDA as a wholly owned subsidiary. This has led to some confusion about roles, lengthy assurance processes, and delays in sanctioning decisions. 

Overall, NAO concluded that work to reduce risk and high hazard at Sellafield has taken an encouraging turn for the better. While delays and cost overruns are still evident for major projects, NDA has made progress with reducing these since the previous report in 2015. “To sustain progress in the near term, the NDA and central government will need to clarify the NDA’s role and to find the right balance between scrutinising decisions and enabling the leadership at Sellafield to exercise its legal duties, professional expertise and maintain motivation.” 

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