UK Public Accounts Committee criticises NDA

30 November 2020

Sellafield siteThe UK House of Commons Public Accounts Committee (PAC) on 27 November published a report on “The Nuclear Decommissioning Authority’s management of the Magnox contract”.

The 18-page report said the Nuclear Decommissioning Authority (NDA) “acknowledges that it does not have full understanding of the condition of the 17 sites across its estate, including the 10 former Magnox power stations. Consequently, there is significant uncertainty about how long decommissioning will take and how much it will cost.”

NDA’s estate includes 17 sites, 12 of which (10 power stations and two research facilities) had been managed by Cavendish Fluor Partnership (CFP) under a contract awarded in 2014 (the Magnox contract). In 2018 PAC reported on the failure of the NDA’s procurement and management of this contract, which had cost the taxpayer around £122 million ($162m)and that a lack of commercial skills in the NDA, compounded by inadequate knowledge of the Magnox sites, were key causes of the failure. The NDA negotiated the termination of the Magnox contract with CFP in 2017, with a consequent additional £20 million cost to the taxpayer. In September 2019,  NDA brought the Magnox sites under the management of its wholly owned subsidiary, Magnox Ltd.

PAC said the cost of the long-term liability to decommission the UK’s civil nuclear sites now stands at £132 billion, although “this estimate is inherently uncertain”. NDA estimates it will cost between £6.9 billion and £8.7 billion to take the Magnox sites to the care and maintenance stage of decommissioning while the timetable for the work is estimated at 12-15 years.

“Past experience tells us that these estimates could increase further.” PAC acknowledges that the situation is complicated by “the historical legacy of decommissioning being an afterthought when the nuclear industry was established, and poor records of what hazardous materials are on the sites”. However, this was a significant factor in the failure of the Magnox contract, which damaged the NDA’s reputation and has cost the taxpayer over £140 million. This “continues to be a major barrier to making progress” as does the need to develop sufficient skills and capacity.

NDA has substantial assets in terms of land and employment opportunities that could be used to serve local communities, PAC said, while the Department for Business, Energy & Industrial Strategy (BEIS) “recognises that its oversight of the NDA has been weak in the past”. PAC welcomed welcome the Department’s and the NDA’s commitments to improve over the next 10 years. “We will hold the Department and the NDA to account for their progress in improving the transparency of the nuclear industry and making a success of the new delivery and governance approach”.

PAC concluded:

  • There remains significant uncertainty over the cost and timetable for decommissioning the Magnox sites and estimates continue to increase.
  • The uncertainty affecting the Magnox sites reflects a wider uncertainty about the costs and timetable of decommissioning the whole civil nuclear estate.
  • A shortage of the right skills within the Nuclear Decommissioning Authority and across the nuclear industry remains a significant barrier to progress.
  • For the new delivery model to work, it will be vital that BEIS exercises strong oversight of the NDA and implements the findings of forthcoming reviews into the failure of the original Magnox contract and the role of the Authority.
  • NDA is not doing enough to exploit its various assets, either for the benefit of local communities or the UK economy as a whole.
  • Public accountability is hindered by a lack of transparency about the scale and nature of the challenge of decommissioning and the performance of the NDA.

It recommended:

  • NDA should set out how it will develop a clearer means of reporting publicly on the level of uncertainty and risk across its sites. It should also set out how it will prioritise its work on its sites in order to decommission them in the safest and most efficient way.
  • NDA should exploit opportunities to reduce the time taken to decommission its sites, and should identify the impact of such reductions on the cost profile.
  • BEIS and NDA should take whatever steps are necessary to provide a firmer estimate of the cost of decommissioning the sites of the Advanced Gas-Cooled Reactors so that the public has a more reliable indicator of the scale of the public liability.
  • NDA and BEIS should make it a priority to progress their plans to find a location for a Geological Disposal Facility in order to reduce interim storage costs at Sellafield and elsewhere, and should confirm when they consider such a Facility might feasibly become available for the storage of waste.
  • Within six months of publication of this report, BEIS and NDA should publish a detailed plan for how they plan to meet the demand for skills across the UK nuclear industry over the next 5–10 years.
  • On publication of forthcoming reports, BEIS and NDA should set out publicly what has been learnt from them and how the reports are being used to inform the development of the new delivery and governance models.
  • In responding to this report, BEIS should set out clearly its rationale for relying on UK Government Investments to represent it on the NDA Board, rather than such oversight being provided directly by its own team which is dedicated to looking at the NDA.
  • NDA should develop a strategy for maximising the economic benefits of developing and, where appropriate, exporting its knowledge and assets to alleviate the burden on the taxpayer. These include the skills and experience of the UK nuclear industry, the decommissioning technologies it has developed, and the land and other physical assets the NDA holds.
  • NDA should be more transparent about its current and future plans with the local communities surrounding its 17 sites to strengthen public accountability and make clear the socioeconomic impact of its planned activities.

Photo: Sellafield, the UK's largest nuclear site


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