APPENDIX 19
First supplementary memorandum by UKAEA
CHANGES IN UKAEA SUPPORT COSTS, 2004-05 TO
2007-08
1. The DTI Departmental Report 2005 documents
actual and planned expenditure on overhead services divided into
three categories:
— Service providers—relate to
the cost of staff delivering the service.
— Policy advisers—relate to the
costs of staff formulating policy (Board members, Executive Directors,
senior staff etc).
— Support/Overheads—relate to
the other costs of administrative staff in central services, accommodation
and general administrative costs.
These costs are a relatively small element of
overall expenditure by UKAEA on NDA and DTI programmes—turnover
in 2004-05 was £401.5 million while the total figure quoted
in the DTI report is £37.5 million.
2. The big switch from "Support and
O/H" in 2004-05 to "Service Providers" in 2005-06
and beyond reflects the move of many of the previously centrally
managed functions into the Sites numbers (eg: Finance and Commercial,
Safety, Regulators Costs etc) at that time, in preparation for
the setting up of Site Licensee Companies and the consequent site-based
emphasis in the future provision of services.
3. The Constabulary costs of some £9
million per year were included in the 2004-05 (and before) figures
(in the "Support and O/H" line of £30.1 million),
but are excluded from all figures after that as they are no longer
an internal UKAEA cost, following the separation of the Constabulary
from UKAEA into a new Civil Nuclear Police Authority, in line
with the provisions of the Energy Act.
4. The explanation for the decline in the
"Service Provider" line from 2005-06 (£25 million)
to the final two years (£18.8/18.6 million) is that the exceptional
costs of KPMG, other Restructuring costs, etc associated with
implementation of the UKAEA Business Plan endorsed by Ministers,
are all in the 2005-06 number, but are not in the later numbers.
It is also the case that cost savings are scheduled in the later
years as a result of the restructuring actions being taken at
present.
5. So overall the total numbers show a decline
in costs which has in effect been masked for one year (2005-06)
due to the effect summarised at paragraph 4 above.
| 
