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Home > News and Events > NDA response statement to NAO report  

NAO publishes report on managing risk reduction at Sellafield

07 November 2012

The NDA welcomes the Report which provides a useful external check on our progress and how we can improve performance further. We have been working with the NAO in an open and transparent way over the last 12 months to help them to understand this complex site and congratulate their team on the quality of its work.

The Report has focussed on the major projects element of the Sellafield programme which represents some £450 million a year out of Sellafield's £1.6 billion annual site expenditure. The Report has recognised the unique nature of the task at Sellafield and the scale of the challenge to deliver major projects at Europe's most complex industrial site, where facilities, equipment and materials date back to the 1940s and 50s. 

The NAO has recognised the progress made by the NDA in developing the strategy and plans to tackle this hazardous legacy, as well as the difficult context of putting in place a contract to deliver a programme of work whilst significant uncertainty about the scope of the task remains. 

The Report acknowledges that NDA continues to take appropriate action to improve Sellafield Limited's performance on major projects and its own capacity to oversee delivery, whilst rightly pointing to some examples where project delivery is not yet at the level of performance we or our contractor are striving for. 

As the client, the NDA will continue to work closely with Sellafield Limited and NMP to improve capability and performance on what remains a unique and highly complex national priority. 

 

In response to comments from the Chair of the Public Accounts Committee: 

The chair of the committee has acknowledged the scale and complexity of the task at Sellafield and we look forward to welcoming her and committee members to Sellafield in a few weeks time to see for themselves the progress that is being made in this unique task. 

It is important to consider current performance in its historic context. The NAO report highlights the importance of a new plan for the site, developed in 2011, which replaced older inherited plans that had unrealistic milestones and was undeliverable. Overall performance at the site is improving with over £425 million of costs savings made and a further £1 billion of previously planned capital expenditure avoided. Progress has also been seen in other areas of activity on the site with 2011/12 representing the site's best year for combined reprocessing operations in seven years. 

In terms of project performance, the NAO study looked at 14 major projects. Seven of these projects are still in the planning and development phase, where it is quite normal to see variances in cost and completion estimates as scope and design is finalised. Of these, one project has come forward three months, one has gone back 4 months, and the other 5 remain on track against challenging targets. Of the seven projects in the delivery phase, 4 projects were within just 3 months of their estimated delivery date in programmes that range from between 2 and 8 years in length.  Whilst we are striving for excellence, the nature of these projects is such that relatively small variances are not uncommon.  Performance on the Evaporator D project, however, is acknowledged as being below the required standards of execution. For 12 of the 14 projects referred to, in 2011/12 we have delivered 92% of the planned scope of work, and for less than the budget.