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Government must share blame for nuclear contract failures, say MPs

The Government failed in its duty to taxpayers over an expensive nuclear clean-up contract, say MPs.

The Government has been accused of being “culpable” for failures over a nuclear clean-up contract that cost the taxpayer up to £122 million.

The Public Accounts Committee (PAC) published a damning report into a contract to clean up the Magnox nuclear reactor and research sites.

The Nuclear Decommissioning Authority (NDA) was accused of failing in both the procurement and management of the contract, which was awarded to the wrong bidder after an “overly complex” procurement process.

The handling of the Magnox contract has been an appalling piece of mismanagement and financial waste Geoffrey Clifton-Brown, MP

Between 2012 and 2014, the NDA ran a procurement exercise for services to decommission 12 sites – two nuclear research sites and 10 Magnox sites – and awarded a 14-year contract to Cavendish Fluor Partnership.

It was taken to court after Energy Solutions, part of a consortium that bid for the contract but lost, lodged legal claims.

After nearly two years of litigation, the High Court ruled that the NDA had wrongly decided the outcome of the procurement process, and the NDA settled legal claims of nearly £100 million.

The PAC said the costly mistakes had caused “untold reputational damage” to the NDA, but it added that the Government must share the blame for approving the authority’s approach.

Geoffrey Clifton-Brown, deputy chairman of the PAC, said: “The Nuclear Decommissioning Authority is entrusted with some of the most important work affecting health and safety matters in the nuclear industry but this sorry affair casts serious doubt on its ability to perform its role effectively.

“From the design and execution of the procurement process onwards, the handling of the Magnox contract has been an appalling piece of mismanagement and financial waste.

“It is wholly unacceptable that some details of what took place should remain so murky – not least the NDA’s inability to fully account for some £500 million of taxpayers’ money paid to its previous contractor.

“Central government is also culpable. Having signed off the NDA’s needlessly complicated procurement plan, it then failed in its duty to taxpayers as issues emerged and costs grew.

“An independent inquiry examining the Magnox contract is under way and both the NDA and central government say they are acting on its interim recommendations.

“Given the scale and implications of the failings set out in our report, we are not prepared simply to take their word for it. In the coming months we expect to be shown concrete evidence of the progress being made.”

The committee published a series of recommendations, including asking the NDA to update MPs within three months on its investigation into whether it overpaid its previous contractor and, if so, how it planned to recover money.

A Business Department spokesman said: “The Business Secretary has been clear that the reasons for the failure of the Magnox procurement should be exposed and understood, which is why he commissioned the independent Magnox Inquiry last year.

“We have already taken steps to further strengthen the governance and oversight of the NDA and we look forward to the final recommendations of the Magnox Inquiry when it is completed later this year.”

An NDA statement said: “As the Nuclear Decommissioning Authority continues to improve the way it manages the clean-up of the nation’s oldest nuclear sites, we welcome the scrutiny of the Public Accounts Committee and today’s report.

“We will study the committee’s recommendations and those to come from the Holliday Inquiry, and have already taken significant steps to address the issues arising from the Magnox competition and contract.

“We are committed to learning from the mistakes made, implement any necessary improvements and continue to focus on the important work of cleaning up the UK’s nuclear legacy.”

Peter McIntosh, of Unite, said the Government must take some responsibility, adding: “Unite is calling for the Government to put the NDA out of its misery and take back control centrally to ensure the taxpayer and the workforce do not have to pay the price for the Government and NDA’s failings.”

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