Twenty-Eighth Report - The Nuclear Decommissioning Authority’s management of the Magnox contract

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 … Read more 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 shortage of technical skills in the pipeline. Since then, the NDA has increased its focus on recruiting experienced staff to its own executive team and to the leadership of its subsidiaries which manage the sites on a day to day basis. But recruiting the right skills remains a significant challenge, particularly with the NDA and its subsidiaries competing with the private sector for the same people. It is encouraging that the NDA and the Department are attempting to meet the skills challenge with, for example, the introduction of the nuclear graduate scheme to increase capacity in the sector as a whole. It is also encouraging to hear that 46% of the latest cohort to the scheme were women. The Department says that it has made its own improvements in capacity and capability to oversee the NDA’s activities but, as we often see, salaries in the civil service mean that the Department risks losing skilled staff to private sector organisations in the industry. Recommendation: Within 6 months of publication of this report, the Department and the Nuclear Decommissioning Authority 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. Show less

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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 … Read more 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 the decommissioning of nuclear sites to a ‘parent body organisation’ from the private sector, the Department was a further step removed from exercising oversight of the decommissioning process than it is now. Indeed, the Department The Nuclear Decommissioning Authority’s management of the Magnox contract 7 acknowledges that this led to it missing some of the problems that arose with the Magnox sites and contract. The Department tells us that its relationship with the NDA has changed, with improved oversight of both the NDA’s strategy and progress with its major projects, a dedicated team in the Department looking at the NDA, and a representative of UK Government Investments on the NDA’s own board who reports to the Department’s accounting officer. But we remain concerned about the Department’s capacity to oversee the NDA effectively, and about the number of players from different parts of Government who are involved. Key to learning lessons from the past and establishing appropriate oversight and governance will be implementing the recommendations of the Holliday inquiry into the Magnox contract and the Department’s ‘Tailored Review’ of the role of the NDA. We welcome the Department’s commitment to completing and publishing these reports as a priority, but it is frustrating and concerning that it is taking so long for these important reviews to be published. Recommendations: On publication of the Holliday report and tailored review, the Department and the Nuclear Decommissioning Authority 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 res Show less

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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 …

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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. …

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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 …

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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

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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 …

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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. …

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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 …

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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 …

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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 …

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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 …

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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 …

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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 …

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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 …

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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 …

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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 …

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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. …

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