APPENDIX 21
Memorandum by the UKAEA Trades Unions
THE UKAEA TRADE
UNION CO
-ORDINATING COMMITTEE
1. The UKAEA Trade Union Co-ordinating Committee
(TUCC) represents Trade Union members from four major Trades Unions—Prospect,
Amicus, GMB and T&GWU. The remit of the TUCC is to represent
the interests of its members in negotiations and consultations
with UKAEA, as well as Government in a wider sense, and to make
every effort to improve their terms and conditions.
2. The UKAEA Trades Unions welcome the opportunity
to make this submission to the Trade and Industry Select Committee
Inquiry into the work of the NDA and the UKAEA.
3. We have strong feelings regarding the
way that the Nuclear Industry and specifically the Nuclear Waste
and Decommissioning Industry has been directed and managed for
a large number of years.
4. We have repeatedly represented to Government
the concerns of our members regarding the growing privatisation
of the industry and its effect on safety and the environment as
well as real value for money for the tax payer.
5. This submission aims to put a few concerns
into context and to question a few assumptions that we believe
are not in the best interests of the UK taxpayer and to suggest
possible means of improving value.
REMIT AND
ACTIVITIES
UKAEA
6. UKAEA's original remit in 1954 was to
manage Britain's nuclear programme. In the early 1960s it employed
over 40,000 people.
7. UKAEA's remit has been developed over
the decades from an R&D organisation that designed, built
and operated prototypes of reactors for the UK to one where it
was challenged to go out and seek commercial work throughout the
world. It has now further developed to its current remit of restoring
the environment of its old nuclear sites whilst continuing to
lead the world in nuclear fusion research and development, as
it has done for many years. Administration of the Combined Pension
Scheme for UKAEA and other employees also continues to be a valued
part of its activities. It currently directly employs over 2000
people and contracts out work that also employs thousands more.
8. It has been evident throughout UKAEA's
50+ years of existence that whatever challenges it has been set,
it has always delivered. When NDA's plans for competition were
revealed, the model that was envisaged as the basis for managing
the nuclear decommissioning industry was not conducive to maintaining
a UKAEA of 2,000 employees unless major changes were made to the
UKAEA's business strategy. As a result UKAEA's activities have
expanded in seeking to compete not only for its own sites (they
still belong to UKAEA despite NDA statements that they are NDA
sites) but also for others at tier 1 and to compete for work at
lower tiers in the NDA model. UKAEA has also undertaken to compete
for commercial non-NDA work—both nuclear and non-nuclear.
9. Once again UKAEA has been challenged
and is meeting that challenge.
NDA
10. The NDA was created by statute through
the Energy Act 2004 and its remit is to manage the decommissioning
of the UK civil nuclear liabilities on behalf of the Government.
The UKAEA Trade Unions questioned at the time why this remit could
not have been carried out by UKAEA with appropriate government
backing. What we have now is the provision of a new and competing
NDPB.
11. The TUCC has a number of concerns:
— One feature of the NDA remit which
we have always regarded as important is the sharing of "best
practice" across the industry. We have reason to believe
that the NDA do not yet know how to achieve this in a competitive
environment. This is in spite of the contract clause which gives
ownership of any intellectual property rights deployed in its
contracts to the NDA with rights to allow free use by any other
NDA contractor—apparently NDA realise this will be unworkable
with a real commercial contractor.
— A further concern is the fulfilment
of the socio-economic remit. NDA has a commitment within the Energy
Act to provide support to the localities in order that the impacts
of the rundown in jobs can be counteracted. Many of the nuclear
sites are situated in remote areas with little or no alternative
employment opportunities in the vicinity. It is not clear that
the introduction of private sector management for the major employers
in these areas, with its prime focus on shareholder profits, will
assist the NDA in achieving these aims. It seems to us more likely
that private sector companies will hand off the problems created
by cost saving staff reductions leaving the local communities
to suffer whilst the NDA and Government vainly attempt to pick
up the pieces.
Nuclear new build could of course provide an
employment boost in areas where the socio-economic impact would
be greatest and we would strongly suggest that NDA consider new
nuclear build as part of their remit in this way.
— The NDA maintain that safe delivery
of the programme is crucial and regard safety as a "given".
The TUCC has serious concerns that the NDA does not reinforce
this point to its contractors at every opportunity and at every
level alongside its other delivery demands.
We feel that inevitably safety may be compromised
in a commercial environment unless NDA make clear its demands
for the maintenance of the highest safety standards at all times.
They must not forget the example of these sorts of problems on
the railways in the recent past. No one would want a "nuclear
Railtrack" event.
COMPATIBILITIES OF
CURRENT PLANS—FUTURE
NEW BUILD
12. The current plans are only compatible
with plans for future new build in so far as it provides an opportunity
for the nuclear industry to demonstrate that it can clean up any
legacy that is left by the operations required for generation
and reprocessing.
13. What is less clear at present is the
fundamental issue surrounding waste disposal/ long term storage.
This is not a technical issue as means of disposing of high level
wastes have been in existence for many years now—it is purely
a political issue.
14. According to statute the NDA has only
the remit to manage the decommissioning of the UK civil nuclear
industry. Beyond that its interest in future generation is presently
restrained in the context of managing the legacy. As referred
to above in our concerns regarding the Socio Economic remit, we
feel that NDA has an opportunity here to promote the idea of nuclear
rebuild.
15. UKAEA meanwhile still has its original
remit in statute with respect to nuclear R&D. UKAEA could,
with the correct mandate and funding from government, take the
lead in managing future nuclear R&D. It also owns licensed
sites that should ease, to a degree, the very difficult planning
processes for new build.
ACCOUNTABILITY AND
PERFORMANCE
16. NDA and UKAEA are both NDPBs accountable
to the DTI. Unfortunately due to the Energy Act 2004 and the decision
not to provide UKAEA with the opportunity to aspire to be supplier
of choice, an organisation that has delivered according to the
wishes of the government in the past faces the dangers of losing
a position of knowledge, experience and expertise in the nuclear
industry field to satisfy a belief that opening their work to
even more competition will reduce the taxpayer's burden.
UKAEA
17. The performance of UKAEA is currently
monitored in very great detail by the NDA as its "contractor"
adding greatly to overall bureaucracy and cost. The work required
of UKAEA in submitting minutely detailed plans and the necessity
for submission of detailed change control documents in the event
the least variation from the plans uses up valuable funds that
could be spent directly on more decommissioning work. Additionally
it creates extra unnecessary work and places undue pressures on
much of the workforce who are already stretched. In parallel to
this the DTI, in the form of the shareholder executive, also monitors
the performance of the UKAEA. In previous years UKAEA has delivered
within the confines of parameters set by the DTI and we are convinced
it will continue to do so.
18. The UKAEA is properly expected to operate
to a very high standard of safety and it has always given this
top priority. The NII has been critical of the UKAEA at some points
in the past and the UKAEA has responded positively, making many
improvements which have satisfied the quite properly exacting
requirements of the NII.
Value to the taxpayer
19. The basic remit of NDA is to deliver
an accelerated decommissioning programme and overall cost savings.
There are indications that the accelerated programme is beginning
to be delivered. However, we find it difficult to believe that
adding an extra layer of bureaucracy between the DTI and UKAEA
has any benefit either from improved efficiencies or by making
significant financial savings to the taxpayer. The cost of the
NDA staff is in general substantially higher than it would be
for equivalent skills in the UKAEA. Many of the staff currently
employed by NDA were until recently employed by UKAEA" despite
assurances that the NDA would not poach staff from the incumbent
operators. In addition both UKAEA and BNFL are now investing very
large sums of taxpayers" money in support contracts for [probably
very expensive] consultants, both UK and overseas based, as a
direct result of the NDA competition model.
OTHER RELEVANT
MATTERS
COMPETITION
Side Effects of the Bidding Process
20. We have concerns over the competition
process, which were expressed in our response to the White Paper
"Managing the Nuclear Legacy"". The costs of the
competition have to be recovered from the alleged savings that
result but past experience suggests that many of these savings
disappear in real terms as the projects progress. The initial
timescales for the competition, as set by the NDA under pressure
from Government, add substantially to these costs by requiring
more bidding effort than is really necessary over the lifetime
of the decommissioning programme.
Job Losses and Degradation of Conditions of Employment
21. Clearly a major target for cost savings
will be labour costs. The Secretary of State has given an undertaking
that savings will not be at the expense of employees' terms and
conditions. The NDA has written into its present contract a requirement
for consultation by its contractors on changes to terms and conditions
but it is of course not clear what the NDA will do if, for example,
a contractor decides to cut the labour costs by explicit reduction
of T&C for large groups of employees, but not those labelled
as key staff.
22. Another obvious method for cost savings
is to cut staff numbers and this process has already started in
UKAEA. Our concern is that in the future this process will be
continued at a higher rate and in areas where it will cause difficulties
for the socio-economic targets of the Energy Act.
Safety and Environment
23. The safety culture of an organisation
depends heavily on the senior management attitude. The competition
process itself presents an enormous distraction at this level
and the World Association of Nuclear Operators (WANO) found that
distraction at this level was a common factor in many major nuclear
incidents around the world.
24. As a result of the Rocky Flats experience
in the USA the NDA believes that competition brings improved safety
as a matter of course. We believe this to be a misleading example
as it is not clear that safety performance in that project started
from the same high standard that UKAEA maintains.
25. We also believe that some of the major
international players who are interested in the UK Decommissioning
market have a questionable history with respect to environmental
performance.
SUMMARY
26. We have presented our views on the effect
that the activities of the NDA are having upon the nuclear decommissioning
industry. We have serious concerns, as set out above, that under
the increasingly severely competitive scenario, safety may be
compromised, socio-economic targets cannot be met and environmental
standards may suffer. Moreover we do not believe that the competition
scenario can produce sufficient savings to counter balance the
cost of the NDA itself, the cost of the bidding process and the
inefficiencies caused by the inability to share "best practice"
in the face of the competitive environment.
27. We believe that rather than forcing
the UKAEA to be torn apart on the rack of competition it should
have been given the necessary backing and support to act on behalf
of Government to carry out those tasks now given to its sister
NDPB, the NDA.
27 January 2006
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