Select Committee · Public Accounts Committee

The Nuclear Decommissioning Authority’s management of the Magnox contract

Status: Closed Opened: 18 Sep 2020 Closed: 25 Mar 2021 8 recommendations 10 conclusions 1 report

In 2017 the NAO reported on the Nuclear Decommissioning Authority’s (NDA) failed 14-year, £6.2bn contract to decommission 12 Magnox nuclear energy sites, following a 2016 High Court ruling that the contract had been wrongly awarded. In March 2017, the NDA decided, based on legal advice, to terminate the 14 year contract it had awarded to … Show more

Reports

1 report
Title HC No. Published Items Response
Twenty-Eighth Report - The Nuclear Decommissioning Authorit… HC 653 27 Nov 2020 18 Responded

Recommendations & Conclusions

18 items
2 Recommendation Twenty-Eighth Report - The Nuclear Deco… Accepted

The uncertainty affecting the Magnox sites reflects a wider uncertainty about the costs and timetable...

The uncertainty affecting the Magnox sites reflects a wider uncertainty about the costs and timetable of decommissioning the whole civil nuclear estate. According to the NDA’s most recent estimates it will cost the UK taxpayer £132 billion to decommission the UK’s civil nuclear sites and the NDA estimates that the … Read more

Government response AI summary
The government agrees to reduce decommissioning time, noting ongoing efforts and a summer 2021 target for strategy definition. It also commits to prioritising a geological disposal facility, stating a process is underway with an expected operational date by the 2040s, and is exploring near-surface disposal …
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HM Treasury
3 Recommendation Twenty-Eighth Report - The Nuclear Deco… Accepted

A shortage of the right skills within the Nuclear Decommissioning Authority and across the nuclear...

A shortage of the right skills within the Nuclear Decommissioning Authority and across the nuclear industry remains a significant barrier to progress. In our 2018 report on the failure of the Magnox contract we were highly critical of the lack of skills—particularly commercial skills—in the NDA. There is also a … Read more

Government response AI summary
The government agrees with the recommendation and sets a target implementation date of Summer 2021. It commits the Department and NDA to work with the Nuclear Skills Strategy Group (NSSG) to review and potentially update the existing Nuclear Skills Strategic Plan, to meet the demand …
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HM Treasury
4 Recommendation Twenty-Eighth Report - The Nuclear Deco… Not Addressed

For the new delivery model to work, it will be vital that the Department exercises...

For the new delivery model to work, it will be vital that the Department exercises strong oversight of the Nuclear Decommissioning Authority and implements the findings of forthcoming reviews into the failure of the original Magnox contract and the role of the Authority. Under the previous delivery model of outsourcing … Read more

Government response AI summary
The government response describes actions to improve contract management, procedures, training, and information sharing, but does not address the specific request to publicly set out learnings from the Holliday report and tailored review.
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HM Treasury
5 Recommendation Twenty-Eighth Report - The Nuclear Deco… Accepted

The Nuclear Decommissioning Authority is not doing enough to exploit its various assets, either for...

The Nuclear Decommissioning Authority is not doing enough to exploit its various assets, either for the benefit of local communities or the UK economy as a whole. The UK was the first country to establish a civil nuclear power generation industry and is still a world leader in nuclear decommissioning. … Read more

Government response AI summary
The government accepts the recommendation for the NDA to develop a strategy for maximizing economic benefits from its knowledge and assets, setting a Winter 2021 target and committing to annual reporting on progress.
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HM Treasury
6 Recommendation Twenty-Eighth Report - The Nuclear Deco… Accepted

Public accountability is hindered by a lack of transparency about the scale and nature of...

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. Nuclear decommissioning will cost current and future generations of taxpayers’ substantial sums of money and has a significant impact on the lives of those who … Read more

Government response AI summary
The government agrees and commits to NDA making specific efforts in its Spring 2021 Business Plan to explain decommissioning work site-by-site with transparent dates and expenditure. Furthermore, the NDA will update its economic impact assessments during 2021 and report back to the committee.
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HM Treasury
1 Conclusion Twenty-Eighth Report - The Nuclear Deco… Not Addressed

On the basis of a report by the Comptroller and Auditor General, we took evidence...

On the basis of a report by the Comptroller and Auditor General, we took evidence from the Department for Business, Energy and the Industrial Strategy (The Department) and the Nuclear Decommissioning Authority (NDA) on the decommissioning of the UK’s Magnox power stations and other civil nuclear sites.1 Read more

Government response AI summary
The government response reiterates that the committee took evidence and published its report, without addressing any specific points from the committee's introductory paragraph.
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HM Treasury
7 Recommendation Twenty-Eighth Report - The Nuclear Deco… Accepted

An informed understanding of the sites is important to develop reliable estimates of the potential...

An informed understanding of the sites is important to develop reliable estimates of the potential costs and duration of decommissioning each site and to support decision- making about the most efficient ways to decommission them and the order in which they should be tackled. The NDA considers that reducing the … Read more

Government response AI summary
The government accepts the recommendation to reduce decommissioning time and cost, with a Summer 2021 target for new strategy definition. It outlines the NDA's ongoing efforts like the 'One NDA' approach and commits to future reporting in annual business plans.
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HM Treasury
8 Recommendation Twenty-Eighth Report - The Nuclear Deco… Accepted

There is also an opportunity to save taxpayers’ money by accelerating the programme to create...

There is also an opportunity to save taxpayers’ money by accelerating the programme to create a deep storage facility, known as the Geological Disposal Facility, to store highly radioactive waste that is currently held at interim facilities at Sellafield and the sites of former power stations elsewhere in the UK. … Read more

Government response AI summary
The government accepts the recommendation, stating that progressing the geological disposal facility is a priority, with a process underway and an expected operational date by the 2040s. It is also exploring near-surface disposal options for less hazardous waste.
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HM Treasury
9 Recommendation Twenty-Eighth Report - The Nuclear Deco… Accepted

While the cost of decommissioning represents a substantial liability for the UK taxpayer, the NDA...

While the cost of decommissioning represents a substantial liability for the UK taxpayer, the NDA was keen to point out that it also raises substantial income—around £800m a year—through commercial opportunities including the export of advice, skills and technologies to other countries with nuclear sites to decommission. The NDA has … Read more

Government response AI summary
The government accepts the recommendation to maximize economic benefits from NDA assets, setting a Winter 2021 target. It states NDA's forthcoming strategy will address international opportunities and collaboration, with progress to be reported annually.
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HM Treasury
10 Conclusion Twenty-Eighth Report - The Nuclear Deco… Not Addressed

The NDA told us about some notable achievements in relation to the decommissioning of the...

The NDA told us about some notable achievements in relation to the decommissioning of the Magnox sites to date: for example, all 26 Magnox reactors have now been defueled, and all the fuel taken to Sellafield for safekeeping, thereby reducing by over 95% the radioactivity on the Magnox sites;18 and … Read more

Government response AI summary
The government response is an incomplete reproduction of the committee's own text and does not provide any governmental stance or additional information.
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HM Treasury
11 Conclusion Twenty-Eighth Report - The Nuclear Deco… Not Addressed

The NDA owns and occupies substantial amounts of land that could be returned to communities...

The NDA owns and occupies substantial amounts of land that could be returned to communities or exploited for commercial or socially beneficial use, and could provide employment in nearby communities. For example, at its Harwell site the NDA said it had been able to excavate and give 50 acres of … Read more

Government response AI summary
The government response restates the committee's observation about the NDA owning substantial amounts of land with potential for community or commercial use.
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HM Treasury
12 Conclusion Twenty-Eighth Report - The Nuclear Deco… Not Addressed

In our 2018 report on the Magnox contract we identified that lack of commercial capability—including...

In our 2018 report on the Magnox contract we identified that lack of commercial capability—including getting rid of the post of Commercial Director—contributed to the organisation being unable to manage the original Magnox contract effectively.22 The NDA informed us about a number of areas in which it has made improvements … Read more

Government response AI summary
The government response restates the committee's finding about past lack of commercial capability and the NDA's subsequent improvements in strengthening its executive team.
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HM Treasury
13 Conclusion Twenty-Eighth Report - The Nuclear Deco… Not Addressed

The Department and the NDA pointed to the increasing importance of developing skills across the...

The Department and the NDA pointed to the increasing importance of developing skills across the industry. The NDA is taking steps to increase training opportunities to further develop technical skills that are in short supply in the UK and which are in high demand from the private sector and from … Read more

Government response AI summary
The government response is an incomplete reproduction of the committee's own text and does not provide any governmental comment or additional information.
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HM Treasury
14 Conclusion Twenty-Eighth Report - The Nuclear Deco… Not Addressed

The Department acknowledged the improvements which the NDA has made in developing its own skills...

The Department acknowledged the improvements which the NDA has made in developing its own skills and capability.25 The Department also told us that, to improve its capability to oversee the NDA’s activities, it had so far been able to retain high quality staff with relevant experience, despite the challenges of … Read more

Government response AI summary
The government response is an exact reproduction of the committee's text, providing no governmental comment or additional information.
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HM Treasury
15 Conclusion Twenty-Eighth Report - The Nuclear Deco… Not Addressed

In September 2019, the NDA’s Magnox contract with CFP ended following a two- year run...

In September 2019, the NDA’s Magnox contract with CFP ended following a two- year run off period, and the 12 sites transferred to the NDA under the management of its subsidiary, Magnox Ltd.27 Under the previous model, the NDA essentially outsourced management and oversight of nuclear sites to the private … Read more

Government response AI summary
The government response restates the committee's description of the Magnox contract ending in September 2019 and the subsequent transfer of sites to Magnox Ltd.
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HM Treasury
16 Conclusion Twenty-Eighth Report - The Nuclear Deco… Not Addressed

We asked the Department if it believed it now had sufficient oversight and governance arrangements...

We asked the Department if it believed it now had sufficient oversight and governance arrangements in place to oversee what the NDA is doing. The Department admitted that under its previous governance regime it had missed some of the issues that led to the failure of the Magnox contract, but … Read more

Government response AI summary
The government response restates the committee's account of the department's perspective on its current oversight and governance arrangements for the NDA, including past issues and reported transformations.
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HM Treasury
17 Conclusion Twenty-Eighth Report - The Nuclear Deco… Not Addressed

We asked the Department about the progress of the Holliday inquiry into the failure of...

We asked the Department about the progress of the Holliday inquiry into the failure of the Magnox procurement and contract which was launched in 2018, and of the Department’s ‘Tailored Review’ of the role and governance of the NDA. The Department committed to ensuring that these reports are completed and … Read more

Government response AI summary
The government response is an incomplete reproduction of the committee's own text and does not provide any governmental stance or update on the commitments mentioned.
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HM Treasury
18 Conclusion Twenty-Eighth Report - The Nuclear Deco… Not Addressed

The public is not fully aware of the challenges of nuclear decommissioning and given past...

The public is not fully aware of the challenges of nuclear decommissioning and given past problems in the industry, the public image of the sector requires some improvement.33 28 Qq 89, 90 29 Qq 55 - 57 30 Q 69 31 Qq 53–54, 32 Q 86, PAC report, recommendation 6. … Read more

Government response AI summary
The government response is an incomplete reproduction of the committee's own text and does not provide any governmental response to the observations made.
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HM Treasury

Oral evidence sessions

1 session
Date Witnesses
5 Oct 2020 David Peattie · Nuclear Decommissioning Authority, Kate Ellis · Nuclear Decommissioning Authority, Sarah Munby · Department for Business, Energy and Industrial Strategy View ↗

Who gave evidence

3 witnesses
WitnessOrganisationSessions
David Peattie · Group Chief Executive Officer Nuclear Decommissioning Authority 1
Kate Ellis · Commercial Director Nuclear Decommissioning Authority 1
Sarah Munby · Permanent Secretary Department for Business, Energy and Industrial Strategy 1

Correspondence

3 letters
DateDirectionTitle
26 Oct 2021 Correspondence from David Peattie, Group Chief Executive Officer, NDA, re PAC o…
10 Sep 2021 Correspondence from Sarah Munby, Permanent Secretary, Department for Business, …
19 May 2021 Correspondence from Sarah Healey, Permanent Secretary, Department for Digital, …