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Nuclear Management Partners

Volume 753: debated on Thursday 20 March 2014

Question

Asked by

To ask Her Majesty’s Government why the Nuclear Decommissioning Authority, rather than the Government, took the decision regarding the extension of the contracts of Nuclear Management Partners.

My Lords, the decision on contract extension was for the Nuclear Decommissioning Authority, in line with its duties and responsibilities under the Energy Act 2004. Ministers were consulted and endorsed the decision before it was announced. Rolling the contract forward represents the best way forward at this time, giving the opportunity for NMP to build on the progress made to date, to address weaker areas of performance and to make further real progress in the next five years.

The decision to extend the contract of Nuclear Management Partners was taken despite its poor performance, undue delays and the fact that the costs are spiralling out of control—it will cost £70 billion to decontaminate six square kilometres. It is well over budget, by £2 billion. When the original decision was taken to give NMP the contract, it was taken by Ministers, so why did Ministers dodge the issue this time?

My Lords, I reassure the noble Lord that we did not dodge the decision. We have taken advice through the work done by the NDA, and my officials were involved in the review throughout the process. The decision made by the NDA was to see this contract go for a further five years to build on the work that has already been done. I remind noble Lords that 90% targets have been reached by NMP in the past five years. It is an incredibly difficult site, as the noble Lord is aware. Of course, there are extremely difficult challenges facing it, and a lot of it has been due to long-term neglect.

My Lords, Nuclear Management Partners spends £1.6 billion of taxpayers’ money each year on the decommissioning process, yet it is in an area that is still one of the most deprived in the United Kingdom. What pressure are the Government putting on that organisation to make sure that it builds up local skills and supply chains to the benefit of the people of Cumbria?

My Lords, I absolutely agree with my noble friend. I assure him that the Energy Act 2004 requires the NDA to consider those very impacts on communities that live nearby. On the example of Sellafield raised by my noble friend, more than 10,000 local people are employed by Sellafield Ltd and there is more than £1 billion of spend. According to the 2011 figures, one-third of that was on local businesses and the supply chain in west Cumbria.

My Lords, the letting and continuation of contracts is a highly sophisticated operation, which can have a huge effect on the amount of money needed to run an operation. Where does the Minister’s department get the skills to do this?

My Lords, I remind my noble friend that the skills in the department and the skills that we bring in from outside are hugely specialised in this area. We are gifted with having some of the greatest minds in the nuclear sector within this country, and we should be very proud of that. We have an absolutely fabulous regulator, which is seen in the world as one of the best. So I do not want to undermine the great skills that we have, but we draw on skills from outside the sector, too.

My Lords, clearly we have a lot of skills in the nuclear sector in the UK, but let us go back to my noble friend’s Question. The fact is that in recent years the performance of the Nuclear Decommissioning Authority has been very disappointing, particularly as regards Sellafield. The question is this: given that disappointing performance, should it not have been a question for Ministers as to whether the NMP contract was extended? Why did Ministers not take that decision?

My Lords, I will return to my first Answer. Ministers were cited after a full review by the NDA and my officials were in on that review; we have been kept informed at every juncture. The decision to go forward with this contract is absolutely right. We are building on the work that has been done. Noble Lords from across the Chamber cannot take lightly the challenges facing the Sellafield site. We are discovering things that were not properly characterised in the inventory and so we have to deal with new challenges as well as with the current ones. We are in a position to see, review and make sure that progress is being made.

My Lords, I had the honour to represent the constituency that included the Sellafield site for 35 years in the House of Commons. I agree with the Minister that these are very complex issues. However, is it not a sad reflection on the decline of our once world lead in civil nuclear power? Sellafield was the biggest single yen earner in the British economy. Now the lead partners in this whole programme—which is crucially important to west Cumbria and way beyond—are not British; they are American.

My Lords, the noble Lord is absolutely right to raise those points. However, I remind noble Lords that for a very long time there has been little certainty for the nuclear sector. At least this Government have taken that certainty forward.

My Lords, can my noble friend confirm that the NDA can sack Nuclear Management Partners at any time it chooses during the five years and that the NDA has to maintain the capability in taking over from NMP in managing contracts?

My noble friend is absolutely right. NMP can of course be sacked. We are looking at making sure that what is being delivered is performance-related. If no good, reasonable progress is made, then we will have to look at other options.