Shareholder Executive

Nuclear Decommissioning Authority (NDA)

Purpose

The Nuclear Decommissioning Authority’s (NDA) core mission is to ensure that the UK’s civil public nuclear legacy sites are decommissioned and cleaned up efficiently and effectively. On 1 April 2005, it took over responsibility for 19 sites formerly owned by the UK Atomic Energy Authority and BNFL. Much of this legacy is made up of experimental and first generation facilities created up to 50 years ago. Competitions for contracts to manage the work on these sites are expected to improve decommissioning performance and drive value for money through innovation and efficiency.The NDA is also required to operate existing commercial activities until current contracts have been met, and to use the revenues to offset spend on decommissioning. It has subsequently been given responsibility for delivering an integrated waste policy.

Legal Status and Ownership

The NDA is a non-departmental public body set up under the Energy Act 2004.

Government Objectives

Vision

The NDA was set up to deliver the Government’s commitment to dealing with the nuclear legacy and it is responsible for driving substantial change through competition to improve delivery and cost-efficiency in a large and complex industry, maximising value for money for the taxpayer.

Objectives

Overall objectives for the NDA reflect both shareholder and wider public policy interests and flow from the Energy Act 2004 through the NDA’s agreed Strategy and Business Plan.

Its core objective is to drive forward the decommissioning and clean up of all the sites designated to it safely and securely, with the focus being on tackling the high hazards, particularly at Sellafield.

Financial Performance

£m	2009	20081	2007
Turnover	1,980	1,463	1,206
Operating Profit	(1,684)	(6,347)	(6,043)
Profit/(Loss) for the year	(2,697)	(8,512)	(7,808)
Net Cash flow	(291)	395	(124)
Government Funds	(44,550)	(43,527)	(36,380)
Dividends	-	-	-

Dividend policy

The NDA does not pay dividends. It uses its commercial income to supplement direct Government funding to meet the costs of its operations and decommissioning.

Performance targets

Targets are based on making progress with decommissioning and clean up, reducing the risks associated with high hazards by reducing waste and putting it into a passively safe form, whilst maximising revenue from commercial operations and asset sales, and delivering value for money across the nuclear estate.

Notes

¹ Figures for 2008 have been restated.

Commentary

Since it became operational in April 2005, the NDA has made significant progress, including the completion in 2008-09 of the re-structuring of its estate to facilitate the programme of competitions that is essential to get a grip on the legacy.

A major highlight of the year was the completion of the Sellafield competition – one of the largest procurements in the world – in November 2008. This, and the first competition for the Low Level Waste Repository near Drigg, have brought world-class capability to the UK for the delivery of nuclear clean up.

Since it took over the responsibility for the governance of the NDA in October 2007, the Shareholder Executive has embedded a governance structure that mirrors private sector best practice as closely as possible, whilst recognising the structure of the NDA as a non-departmental public body.

An effective board is essential for the successful delivery of the NDA’s mission. Following the appointment of Stephen Henwood as the new Chair in March 2008, the Shareholder Executive has worked with him to strengthen the Board. In February we appointed four new Non-Executive Directors who bring a wide range of skills and experience.

It is equally important to ensure that the executive capability of the Board is optimised and it is an important objective for the Chair to get the best out of his executive team. The executive team has been strengthened by the appointment of John Clarke to the Board as Commercial Director in June 2008.

Following the departure of Ian Roxburgh as CEO, Richard Waite was appointed acting CEO on 1 August 2008. Since then he has successfully steered the NDA through a critical time in its development.A new permanent CEO will start in October 2009. Our expectation is that Richard Waite will continue to play a major role in taking the NDA forward beyond then.

As well as ensuring that the NDA has the best possible team in place to meet the challenges ahead, the Government’s key priorities for the NDA are for it to secure value through its new contractors, to deliver the remaining site competitions, and to drive value both from its contractors and within its own budget.