NAO report on Sellafield decommissioning

By agency reporter
June 23, 2018

The Nuclear Decommissioning Authority (NDA) has improved its performance in delivering major projects to reduce risk and high hazard at Sellafield, the NDA’s largest and most hazardous nuclear site. Yet it still has a long way to go in decommissioning and cleaning up the site, facing continued delays and an expected overspend of up to £913 million, says the National Audit Office (NAO) in a report published on 20 June 2018.

Since the NAO last reported in 2015, the NDA and Sellafield Limited have made significant progress with programmes to reduce risk and hazard in legacy ponds and silos. This includes work to empty one legacy pond – the pile fuel storage pond – of 70 per cent of its radioactive content. The NDA also expects it will reach critical milestones with legacy facilities earlier than it did in 2015.

The report also highlights that most major projects at Sellafield delivered their work to schedule and to budget in 2017-18. This continues a trend of improvement since 2014-15, following the NAO’s previous report in this area.

However, major projects are still predicted to deliver late and to cost more than the NDA originally expected. In 2015, the NDA’s nine major projects which were in construction were anticipated to cost an additional 60 per cent of their budget at design stage. This has now been reduced to 29 per cent over budget, which while a substantial improvement, is still a forecasted overspend of £913 million.

The NAO has also found that evaluating overall performance at Sellafield is difficult due to a range of factors. For example, since the NAO last reported, the NDA has cancelled three projects after spending £586 million on them, saying it found a better way of delivering the work. Legacy ponds and silos programmes have also delivered less work than originally planned in three out of the past six years, but are still expected to reach critical milestones early. Evaluating overall performance is also complicated by the fact that the NDA has not yet been able to demonstrate how its current work leads to progress against the long-term mission.

The NDA has also reported that Sellafield Limited has achieved £470 million in efficiency savings, but neither the NDA nor Sellafield Limited know their makeup and admit that a proportion do not represent genuine efficiency savings.

The NDA states that factors other than funding, such as physical constraints of the site, limit how fast they can achieve progress in the reduction of high hazard at Sellafield, yet it has not tested these factors sufficiently. The strategic decisions the NDA takes around prioritising activity at Sellafield could be profoundly changed and improved by a better, more evidence-based assessment of these constraints.

The NAO has found that the role of the NDA is unclear and this could put at risk the progress now being seen at Sellafield. The Department for Business, Energy and Industrial Strategy’s (the Department) governance of the NDA is complex and not working as well as it should to support improvements at Sellafield. The recent failure of the NDA’s contract to decommission its Magnox sites, which the NAO reported on in October 2017, has exacerbated this lack of clarity and provides an important imperative for a review of how the NDA performs its function, and how the Department supports it in doing so.

The NAO has recommended that the role, function and governance of the NDA are reviewed, and that the NDA improves its understanding and communication of progress at Sellafield, as well as the constraints to faster and further progress.

Amyas Morse, head of the National Audit Office, said, “The improvements in reducing risk at Sellafield are encouraging, but the scale of the challenge is very great and the Department could be doing more to support the NDA through better governance and oversight of performance. “The NDA, for its part, needs to do a better job of explaining what progress it has made and what it will achieve over the next two to four years so Parliament can hold it to account. It might also help if there was less focus on the extraordinarily round terms of £120 billion to be spent over 120 years, and more focus on what can be delivered in a more meaningful timescale, say within 40 years, in terms of cleaning up this extremely dangerous nuclear legacy. I would hope this could be a great deal if they push ahead.”

* Read the full report here or a summary here

* National Audit Office


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