1.On the basis of a report by the Comptroller and Auditor General, we took evidence from the Department for Business Energy & Industrial Strategy (the Department), the Nuclear Decommissioning Authority (NDA), Sellafield Limited and UK Government Investments (UKGI) to examine the NDA’s progress with reducing risks at Sellafield.
2.The NDA is a non-departmental public body, sponsored by the Department and overseen by UKGI. The NDA is responsible for operating and decommissioning 17 nuclear reactor and research sites in the UK. Sellafield is the largest and most hazardous of the NDA’s sites, home to ageing facilities that store radioactive nuclear materials, including 40% of the global stockpile of plutonium. The NDA oversees and funds the work of Sellafield Limited, a site licence company tasked with daily operations to decommission the site. It also carries out other commercial activities, such as reprocessing spent fuel, that generate an income for the Exchequer. In 2017–18, the NDA spent £2 billion on activities at Sellafield. It expects operations to decommission Sellafield to continue for over 100 years at an estimated cost of £91 billion.
3.In 2014, the Committee raised concerns that the NDA’s contract with Nuclear Management Partners (NMP), the private sector consortium that had managed Sellafield since 2008, was not providing value for money. The Committee also did not believe that NMP had provided clear leadership, strong management or the improved capabilities needed to deliver better performance at Sellafield. In January 2015, the NDA announced its decision to terminate its contract with NMP. In April 2016, NMP Sellafield Limited became a direct subsidiary of the NDA. The NDA and the Department have asserted that this new management model is enabling faster and more cost-effective progress with reducing risk at Sellafield.
4.The NDA’s biggest challenges, and those that post the highest risks at Sellafield, include decommissioning four legacy ponds and silos, and managing plutonium stores. The Office for Nuclear Regulation regards these risks to be intolerable, meaning the NDA should prioritise reducing the risk in these facilities, and that other considerations, such as funding, should not hinder its progress in doing so. The NDA estimates that it will take decades to decommission these facilities. For example, the Magnox swarf storage silo, considered the greatest risk at Sellafield, will pose a significant risk until 2050, when work to retrieve the waste is expected to complete. For these programmes to proceed, they often require the successful completion of one or more major projects which means that progress at Sellafield must be assessed through at both programme and project level. The NDA has a set of 14 major projects that support the completion of these long-term programmes of work, with a lifetime cost of £6 billion.
5.This Committee has periodically examined the NDA’s progress with reducing risk at Sellafield, examining its long-term programmes to decommission the legacy ponds and silos, its management of the plutonium stockpile, and its progress with delivering major projects. We last examined the NDA’s progress in this area in March 2015. We found that the NDA had repeatedly extended the forecast completion dates for decommissioning the two legacy silos by 10 and 14 years. We also found that major projects were consistently late and over budget. For example, the NDA’s estimated completion dates for six major projects under construction at the time were, combined, delayed by 271 months (over 22 years).
6.Since 2015, the NDA has made progress with retrieving waste from the four legacy ponds and silos. For example, the NDA told us that it recently completed the retrieval of “bulk stock” material from the pile fuel storage pond, reducing the radioactive content of the pond by 70%. It has also started removing sludge and fuel from the first generation Magnox storage pond for the first time in decades. The NDA has recently completed the installation of six doors on the side of the pile fuel cladding silo and it now expects to complete the retrievals of waste six years earlier than it previously expected. While we welcome these developments, we are also aware that this long-term progress does not tally with the NDA’s annual performance for these programmes. The NAO report shows that, when assessed annually, the NDA’s work has been behind schedule in at least three of the last six years.
7.The NDA has improved its delivery of its major projects at Sellafield, reducing expected delays and overspends since we last examined progress in 2015. For example, in 2015, the NDA expected nine major projects under construction or nearly completed to be nearly 439 months delayed. In contrast, it now expects its nine major projects under construction or nearing completion to complete 165 months later than planned. Despite this progress, these projects are still delayed, and expected to cost £913 million more than budgeted. In 2015, the NDA accepted our recommendation and agreed to set out clear performance information – what it now calls “mission reporting”. This would enable better external scrutiny of progress. Three years on, however, the NDA has not completed this work.
8.The Department, through UKGI, oversees the NDA’s performance at Sellafield. The Department told us that it was encouraged that the NDA was reducing the expected delays for major projects and that it was confident in Sellafield Limited’s plan to achieve cost savings and reduce hazard at the site faster. However, neither the Department nor UKGI sufficiently challenge the NDA to explain cost escalations and delays, or question inconsistent performance information. They also do not review the NDA’s performance over the medium term (i.e., 3–5 years) which, given the long timescales, would provide a useful complement to existing annual progress assessments.
9.The NDA and Sellafield Limited told us that their strategy for decommissioning Sellafield is based on prioritising the reduction of the highest risks first. The NDA and the Department confirmed that Sellafield Limited’s ability to carry out its work is not constrained by the available of funding. The NDA and Sellafield Limited consider that there are, however, three factors that constrain their ability to make faster progress at Sellafield. These are: the physical congestion of the Sellafield site; challenges to workforce productivity; and the complexity of the decommissioning task, which often requires bespoke innovative technologies, such as the six new reinforced doors the NDA recently installed at the side of the pile fuel cladding silo that has enabled Sellafield Limited to start the retrieval of waste materials earlier.
10.The NDA and Sellafield Limited told us that turning Sellafield Limited into a direct subsidiary has allowed for more innovative thinking around these constraints. Sellafield Limited also said that its new masterplan takes into account the congestion of the site. However, we were concerned that the NDA and Sellafield Limited have not carried out any analysis to understand how and to what extent these perceived constraints affect the pace of, and options for, decommissioning. Without this thorough understanding, the NDA and Sellafield Limited cannot be sure that their strategy for decommissioning the site is the right one, nor can we be sure that they are doing everything they can that they are doing everything they can to reduce risk at Sellafield as quickly as possible.
11.The NDA has cancelled three major projects since 2012 because it says it has found more cost-effective ways to complete the work. The NDA spent £586 million in taxpayer money on these projects before it decided to cancel them. For two of the cancelled projects, the Silo direct encapsulation (SDP) plant and the Box transfer facility, the NDA expected combined cost overruns of £2.1 billion and delays of over 9 years before it decided to write them off. The NDA told us that to comply with the Office for Nuclear Regulation, it must always have a strategy in place to manage high-risk facilities. It therefore progressed work on the SDP project because it was the most technically advanced option at the time. Meanwhile, it worked with universities to pursue other strategies that would simplify the work and make it more cost-effective.
12.The NDA also cancelled a third project that involved building new storage tanks to store highly active liquor. It told us that following its decision to end reprocessing activity at Sellafield in 2020, the Office for Nuclear Regulation agreed to allow Sellafield Limited to use two tanks, previously kept empty to provide reserve capacity, in place of building new tanks. Sellafield Limited told us that while the regulator has been holding it to account, it has also been supportive in trying to find new ways of completing the work on the site more quickly and cost-effectively.
13.The NDA and Sellafield Limited have not quantified what, if any, benefits have been derived from these incurred costs and the work undergone up to the point the projects were cancelled. The NDA asserted that it would find alternative uses for some cancelled projects, like the box transfer facility. It also told us it is getting better at learning the lessons from strategy changes and from past mistakes. But it acknowledged that it is not yet able to evaluate to what extent changes in strategy have generated savings to the taxpayer.
14.The Department is responsible for setting government policy for dealing with the UK’s stock of plutonium in the long term. The Department told us that there are two options available: readying plutonium for long-term storage in the geological disposal facility (GDF) that the Department expects will be available by 2048; or reuse the plutonium as fuel in new nuclear power stations. Either option would require several decades to be implemented. When we last examined the Department’s progress in dealing with the UK’s stock of plutonium in 2014, we found that, while the Department’s preferred option was to reuse plutonium as fuel, there was not yet a market, or any power stations, that required fuel from reused plutonium. Four years later, the Department is not any closer to deciding a course of action. It told us that is not comfortable with any of the potential options for managing plutonium other than disposing it in the GDF. In the meantime, the NDA must ensure that the stockpile currently at Sellafield continues to be stored safely and securely for decades to come.
15.The NDA asserted that it faces three main challenges in managing the plutonium stockpile at Sellafield. First, the majority of the plutonium canisters need to be repackaged to ensure they can be safely stored over the long term. The NDA’s project to build a repackaging plant at Sellafield to enable this is still in the early design phase. The project is already experiencing significant delays and is expected to cost £1 billion more than originally planned. Secondly, the NDA has recently discovered that a number of plutonium canisters are decaying faster than it had expected. These canisters will need to be repackaged before the repackaging plant is available, so the NDA will have to implement contingency plans in the meantime. Lastly, the two stores that the NDA are constructing to hold these canisters are expected to cost £200 million more than expected. The NDA has not yet set out its strategy for these contingency arrangements or their associated costs.
1 Report by the Comptroller & Auditor General, session 2017–19, HC 1126, para 2.11
2 , paras 1.17, 1.21
3 Committee of Public Accounts, , session 2013–14
4 , para 5
5 , para13, Q 62, 64,74
6 Q9 and , para 1.14
7 , para 4, figure 13
8 , paras 2.6, 2.20
9 Public Accounts Committee, , HC 1096, 11 March 2015
10 Qq 9, 20, 28, , para 10
11 , para 14
12 , para 11
13 , paras 10, 11
15 , para 19
16 Qq 21, 60, 62
17 Qq 66, 120 and para 2.36
18 Q 63 and , para 18
19 Qq 69, 70
20 Qq 74–76
21 Qq 74–78, 82
22 Q 44
23 , figure 17
24 Qq 44–46
25 , figure 17
27 Qq 45–48
28 Qq 17, 46, 47, 53
29 Q 47
30 Qq 38–39
31 para 2.12
32 Public Accounts Committee, , HC 708, 11 February 2014, Qq 152, 159
33 Qq 38–39
34 , para 2.13
35 , para 2.14 – 2.17, Qq 34 – 40
Published: 31 October 2018