APPENDIX 13
Memorandum by Prospect
INTRODUCTION
1. Prospect is a trade union representing
105,000 scientific, technical, managerial and specialist staff
in the Civil Service and related bodies and major companies. In
the energy sector, we represent scientists, engineers and other
professional specialist staff in the nuclear and radioactive waste
management industries, the wider electricity supply industry and,
increasingly, also in the gas industry. Our members are engaged
in operational and technical management, research and development
and the establishment and monitoring of safety standards, environmentally
and in the workplace. Other members are directly involved in a
range of sectors and functions for which environmental issues
are of significant professional concern. We are fortunate in being
able to draw on this broad range of knowledge and expertise to
inform our views.
2. Prospect welcomed the proposal in the
2002 White Paper "Managing the Nuclear Legacy" to establish
the Nuclear Decommissioning Authority. We recognised the needs
to improve the structure of the decommissioning industry, for
further skill development and to protect the terms and conditions
of employees. We did, even at this early stage, express caution
and concern about the proposed competitive framework. However,
in the two and a half years since publication of the White Paper
we have undertaken significant and detailed work, much of it in
close co-operation with the Department of Trade and Industry,
to clarify and codify aspects of the NDA's operation. Throughout
this process, we have not shifted in our willingness to co-operate
with the establishment of the NDA and we have approached the prospect
of greater private sector involvement in decommissioning work
on a pragmatic basis. Nonetheless we have some outstanding concerns,
shared by other parties, which we believe will adversely impact
on the operation of the NDA. The Select Committee's inquiry is
most timely in this regard and this short submission focuses on
these concerns.
THE TIMETABLE
FOR COMPETITION
3. The Energy Act makes it clear that although
accountable to the Secretary of State, the NDA has the responsibility
to engage stakeholders before recommending a timetable for opening
up sites to competition. Yet, within days of the Act receiving
Royal Assent, the Treasury White Paper on Public Spending Agreements
arising from the 2004 Spending Review announced that competition
should have been completed for the management of at least 50%
of UK nuclear sites by the end of 2008. Prospect and other stakeholders
have significant reservations for the credibility of the NDA and
its work by the setting of such an arbitrary target.
4. Driven by the PSA timetable the position
is complicated further by the fact that, as at mid-February, even
the initial contracts were not agreed and there appeared to be
no settled view about the grouping of sites. Indeed, even on the
issue of contract model, an action on the Liabilities Management
Unit to share drafts of the contracts for our comments remains
outstanding. In our view, the NDA Chair should honour the organisation's
stated commitment to transparency and openness by publishing the
initial contracts with BNFL and UKAEA. The current EU inquiry
into the NDA regarding possible state aid to BNFL adds further
uncertainly to the timetable for competition which, if extended,
will cause problems for both BNFL and UKAEA. The NDA should publish
its contingency plan for dealing with this situation.
HEALTH AND
SAFETY
5. Furthermore, we have significant concerns
for safety if such an accelerated programme of activity were to
be imposed. As reported in New Scientist (19 February),
these concerns are shared by the Health and Safety Commission
(HSC) and the Nuclear Safety Advisory Committee (NuSAC).
6. The scale of demand on the resources
of the Nuclear Installations Inspectorate (NII) to relicense sites
poses immediate challenges of time and resource that, on the basis
of experience with the Magnox sites, should not be under-estimated.
Furthermore this comes at a time when HSE resources are already
depleted and under severe pressure, as recognised by the Work
and Pensions Select Committee. Nuclear inspectors are additionally
faced with the restructuring of the NII into a major hazards inspectorate
which, among all the other stressors associated with organisational
change, could potentially dilute their expertise. We would emphasise
that this is not simply an employee issue. It has much broader
implications for future energy policy: the NDA will not command
public support unless a safe and effective approach to decommissioning
work can be demonstrated. Any failure in this regard could effectively
also rule out further consideration of new nuclear build—despite
the Government's stated intention to keep the nuclear option open.
7. Our concerns in this area do also range
beyond the initial contract round as it is well established—and
certainly in line with Prospect's experiences elsewhere—that
the pressure of too frequent retendering exercises tends to be
distracting for both managers and staff. Ultimately, such a regime
creates a climate of uncertainty that can adversely affect safe
and efficient working. NuSAC, for example, has observed a relationship
between the requirement to regularly retender for work and the
safety of operations.
INDUSTRY RESTRUCTURING
8. Both UKAEA and BNFL's Reactor Sites Division
have been under pressure to restructure their operations on a
site-by-site basis in order to facilitate competition, whereas
established practice in both organisations has been to provide
a number of services across the business in order to provide economies
of scale. Restructuring is proving a costly exercise, requiring
sites to provide their own HR, finance, other commercial and specialist
services. Yet the expectation is that this increased total cost
to the business should be met from existing resources, despite
the fact that it is being externally imposed. For an organisation
like UKAEA such additional demands are not easily accommodated.
Over the longer term, there is also a danger that much "pooled
learning" will be lost—again mitigating against a joined
up approach.
WIDER ECONOMIC
IMPLICATIONS
9. The decommissioning successfully completed
to date and in progress has largely been undertaken by UK industry.
It is a very real concern to us that, following competition, the
bulk of this work could go instead to foreign companies. This
is not simply an issue of protecting UK employment, important
though that is, particularly in areas such as Sellafield and Dounreay.
There are equally important issues about safeguarding the future
UK skills base and intelligent customer capacity in functions
of critical importance. There are also strong arguments for strengthening
UK capacity, both operationally and in the underpinning R&D,
in order to secure a share of a lucrative world-wide market for
decommissioning work.
OTHER NDA RESPONSIBILITIES
10. Our principal concern at this stage
is that the vast amount of work done in preparation for competition
has crowded out execution of other statutory duties on the NDA,
including in relation to skills enhancement and retention, the
development of socio-economic plans and stakeholder engagement.
In particular, we would emphasise the need for openness and transparency
and the importance of maintaining and continuing to develop a
skilled workforce, bearing in mind that on larger sites packages
of work may span more than one generation of workers. It will
not be good enough to rely on the existing workforce, not least
because a significant proportion of staff currently employed are
due to retire in the next 10 years. However, we are not convinced
that the NDA has recognised the need to address these issues from
its inception. Training and development is not an optional extra.
Neither can it be left to the vagaries of commercial practices
that turn training budgets on and off in line with changes in
profitability.
11. As far as stakeholder engagement is
concerned, progress to date on Near Term Work Plans (NTWPs) is
not encouraging. Although supposedly subject to wider stakeholder
engagement, there is little evidence that this is occurring despite
the fact that decisions are already being made on NTWPs for some
sites.
EXCLUDED ACTIVITIES
12. The provisions of the Energy Act do
not apply to decommissioning of liabilities held by the MOD, for
example at Aldermaston, the dockyards, Clyde submarine base and
at Dounreay. Although these liabilities present particular technical
challenges, the skills required to deal with them are not dissimilar
in nature to those posed by BNFL and UKAEA sites. Under the proposed
arrangements however, an NDA decommissioning contract at Dounreay
could run alongside but completely separate from an MOD contract
despite the fact that the same contractors may be involved. It
may therefore make sense, both in practical terms and in disseminating
best practice, to transfer MOD liabilities to the NDA when decommissioning
is required. There could also be advantages in relation to maintaining
continuity in the proposed industry-wide pension scheme.
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