Report recommends a root and branch review of the National Decommissioning Authority
You have a right as a citizen to be kept safe from any dangerous pollution from the ageing 12 closed Magnox nuclear reactors and research stations in the UK. You would expect the organisation protecting us to hand out properly thought out contracts to do the job. The failure by the Nuclear Decommissioning Authority to organise a £6.6 billion contract to clean up properly cost taxpayers £97.5 million when rival companies who lost out successfully sued the agency forcing them to settle with them.
This month completely unnoticed by the national press Steve Holliday, the former chief executive of the National Grid, published a damning report on how the agency failed to do its job and the failure of its supervising body, the UKGI, to supervise it and the Department for Business, Energy and Industrial Strategy, to keep tabs on what was going on.
So frightened were former senior executives of the Nuclear Decommissioning Authority(NDA) of his inquiry report that they rushed to the High Court to try and get a judicial review to stop him ruining their reputations. They failed but delayed the report.
For the record they were John Clarke. the former NDA chief executive; Stephen Henwood, the former chairman; Robert Higgins, the former head of legal services; Mr Graeme Rankin, former head of competition and Mr Sean Balmer, former commercial director, He has spared their blushes by not naming them personally in his report.
Steve Holliday had in his remit the power to recommend disciplinary action against them for their failings. But he chose not to do so instead blaming the culture of isolation in the nuclear industry in general and the running of the Nuclear Decommissioning Authority in particular.
NDA failed to keep a grip
In broad terms the NDA failed to keep a grip on what has happening after they awarded the contract to the Texas company Cavendish Fluor Partnerships before it ended up in the courts where it was successfully challenged by rivals Energy Solutions and Bechtel. The original contract was changed so much and cost so much more – latest estimate is up to £8.9 billion that the companies who lost out were able to sue.
So imbued were the senior staff at the NDA with how clever they were in organising procurement contracts that they missed warning signs and worse didn’t inform the NDA board what was really going on until it was too late. The UKGI is revealed to have a conflicting role – both supervising it and sympathetically helping it sort out problems. He rightly suggests that it should be stripped of its day to day supervision.
The report says : “There appears to have been a culture that sought to self-justify, and which was inward looking. In particular: the NDA had a belief in its own skills and intellectual ability, and did not recognise or seriously contemplate that it may have any weaknesses, when contracting and managing external advisers, it had a propensity to limit their role, and did not appear to welcome strong challenge; and it failed to take sufficient steps to bring in people from other industries with different skills and experience, and to learn lessons from them.”
Damning conclusions picked up by a whistleblower
His criticism of the culture of the NDA has been picked up by Alison McDermott, a whistleblower taking the NDA and Sellafield to an employment tribunal, and may be quoted in her case expected later this year. The BBC recently did an exposure on bullying and harassment at Sellafield. The link to the story is here.
He recommends a root and branch review of the NDA by the business ministry- which has now handed the contract back in house – changing its structure and bringing in people from outside the nuclear industry and putting a top flight lawyer on the board.
I am worried that since there was so little publicity about this report whether the ministry will have the incentive to do anything about it. If it doesn’t we could see more waste of taxpayers’ money and we need changes for our safety in cleaning up some of the most toxic sites in the country.
Four years ago Sir Amyas Morse, then comptroller and auditor general , said “The NDA’s fundamental failures in the Magnox contract procurement raise serious questions about its understanding of procurement regulations; its ability to manage large, complex procurements; and why the errors detected by the High Court judgement were not identified earlier.”
We now need the National Audit Office and MPs on the House of Commons Public Accounts Committee to keep an eye on this. He also has wider recommendations for the rest of Whitehall when it hands out big contracts.