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Taxpayers’ money scattered ‘like confetti’: How two-thirds of the government’s energy budget is guzzled by nuclear waste projects

  • Nuclear waste projects are years behind schedule and hundreds of millions of pounds over budget
  • Budget has jumped to £1.9billion in the last year alone
  • MPs warn of an ‘appalling waste of public money’

By Rachel Rickard Straus

Millions of pounds of taxpayers’ money designated to decommission the UK’s nuclear waste is being guzzled by projects overrunning by years, a damning report reveals.

As much as two-thirds of the Department for Energy and Climate Change’s budget is gobbled up by decommissioning nuclear waste – a staggering £1.9billion in the last year alone.

But at a time when every penny spent on energy and climate change costs is being counted, projects to decommission nuclear waste are years behind schedule and going hundreds of millions of pounds over budget, a report seen by This is Money reveals.

Soaring costs: Nuclear decommissioning at Sellafield is set to cost taxpayers more than £67biillion



Britain has an expensive legacy of nuclear waste, left over from a post-war era in which little thought was given to how nuclear weapons would be decommissioned.

Successive governments have failed to deal with the waste, the vast majority of which is at Sellafield in Cumbria, leaving current taxpayers facing a bill that has reached £67billion and is rising.

The job of decontaminating the Sellafield facility has been entrusted to a private company for the past five years – Nuclear Management Partners.

But a new report by KPMG exposes a litany of rising costs, missed deadlines and poor management.

Of 69 operating plan targets set for this year, only 77 per cent of them have been achieved on time, six per cent were behind schedule and 17 per cent were not achieved at all.

The delays represent an overspend of £180million in the last year alone, the report shows.

The report by KPMG found that 17 per cent of the operating plan targets were not achieved (Source: KPMG)



One project – Separation Area Ventilation – which was initially estimated to cost £120million and be completed by June is now expected to cost £229million and not be completed for another three years. This alone marks an extra cost of £109million and a 92.3 per cent increase in scheduled deadline.

The report also warns that Sellafield projects are being managed in the interests of shareholders – not taxpayers. It is ‘driven by the pursuit of value for its shareholders,’ the report states. ‘This is not aligned with Nuclear Decommissioning Authority objectives under current incentive structures.’

The Public Accounts Committee pulled up bosses from the Nuclear Decommissioning Authority and  Department for Energy and Climate Change last week, to scrutinise the work at Sellafield.

The panel of MPs expressed surprise that the damning KPMG report had not been shared with them until the day of the evidence session, nor was it shared with the National Audit Office. Indeed the MPs only got hold of the report as a result of a Freedom of Information request.

Work on the Separation Area Ventilation is expected to run considerably over budget, the report found (Source: KPMG)


PAC chair Margaret Hodge said: ‘This is a saga of constantly escalating costs and changing deadlines, always justified simply by the difficulty of the project.  I know that it is a difficult project, and we all care passionately about dealing with nuclear waste safely, but that does not provide a sufficient excuse … for the absolutely appalling waste of public money we are seeing here. It is like scattering confetti. That is what it feels like to me every time I think about it.’

She added: ‘The budget increases from £1.6 billion to £1.8 billion a year, which is a 12 per cent increase at a time when everywhere else in the public sector is expected to reduce spending, and you increase the share of efficiency savings. It is mind-boggling.’

NMP was contracted – at a cost of tens of millions every year – to provide expertise and leadership at Sellafield. 

However the report claims ‘there was no clear evidence of leadership translating to improved performance’.

Indeed NMP has had four chief executives in the last five years alone.

PAC member MP Meg Hillier said: It seems extraordinary that £1.8 billion now a year is going on this contact. Yet, in a way it is cocking a snook at the British taxpayer that the chief executive is allowed to change that often.

Many of the projects are behind schedule, the report found (Source: KPMG)


Permanent Secretary to the Department of Energy and Climate Change Stephen Lovegrove responded to the panel: ‘Am I happy where there is poor performance in terms of either letting contracts or contract management? No, I am absolutely not. I am reasonably confident that poor performance… is being addressed throughout this process.

‘Where I want to make a distinction is between the costs that are going up because of unforeseen, unknowable factors on the ground at this very complicated site and those that could have been foreseen. It is those that we want to concentrate on for the purposes of the KPMG report.’

The contract with NMP was awarded for a maximum of 17 years starting in 2009 – with a break clause in 2013 – in the belief that the private sector would be able to manage the site more efficiently.

Margaret Hodge said she found it ‘extraordinary’ that the contract continuation was given to a ‘company which KPMG, in a very recent analysis, found to be appallingly badly lacking’.

But Stephen Lovegrove argued that renewing the contract was still the best option. ‘We felt that, despite the poor performance on a number of the projects on the Sellafield site, there is a lot of other good work going on in Sellafield,’ he said. ‘Looking at the alternative courses that we could have taken in discussion with the NDA, we felt that the best likelihood of achieving our outcomes and value for money was to renew the contract.’

Chief executive of the NDA John Clarke explained the organisation’s decision to renew the contract: ‘Both NMP and the NDA now have a much better understanding of the issues and complexities that exist at the site and the challenges that lie ahead. Whilst progress is being made on a number of fronts we will require significant improvements during the next period.

‘We have had extensive discussions with NMP and made clear where these improvements must be made. We will continue to monitor performance closely and remain focussed on achieving our goal of safe, effective, value for money decommissioning at Sellafield – as we are seeing elsewhere across our portfolio of sites.’

The NDA commented on the findings: ‘The KPMG report provides an independent review of performance during the first five years. It was commissioned by the NDA to inform its decision on contract extension. The report does provide independently collated performance data but does not provide advice to the NDA.’

Last month it was revealed that senior managers at NMP pocketed more than £6million in taxpayer-funded bonuses over the last three years, despite a series of failings.

In the financial year 2009/10, NMP executives received £1,999,192; in 2010/11 the figure was £2,451,269 and in 2011/12 the executive bonus pot totalled £2,148,035.

Executives also faced criticism earlier this year after it was revealed they made £42,711 in expense claims that should not have been claimed at all. The claims included a £714 taxi bill to chauffeur a cat and flights to the US Masters golf tournament.
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November 15, 2013 - Posted by | Uncategorized

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