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 UKAEA and BNFL. This legacy is made up of experimental 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. More recently it was also 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 vision is of an efficient, competitive market in nuclear clean-up and decommissioning, providing value for money and minimising the overall costs to Government of tackling the nuclear legacy.

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 securely, effectively and in ways that protect the environment, while maximising value for money for the taxpayer in line with its legislative and statutory obligations.

Looking ahead the Government's key priorities for the NDA over the next twelve months include driving the Sellafield competition to a successful conclusion and launching the final competitions with a clear and robust timetable; and planning how to reduce fixed costs and increase spend on decommissioning.

Financial Performance

£m	2008	2007	20061
Turnover	1,458	1,206	1,213
Operating Profit	(6,306)	(6,043)	(6,110)
Profit/(Loss) for the year	(8,471)	(7,808)	(7,395)
Net Cash flow	395	(124)	(294)
Government Funds	(43,203)	(36,380)	(29,706)
Dividends	-	-	-

1 As restated for the acquisition of UK Nirex Limited.

Commentary

Since it became operational in April 2005 the Nuclear Decommissioning Authority has made strong progress in its mission to bring about a more competitive environment for the safe, secure, and cost effective clean-up of legacy waste. Highlights in 2007-08 include:

• delivering its full planned programme of work
• despite a number of challenges, notably around the volatility of its commercial income, the NDA ended the year within budget, delivering efficiency savings in excess of £113m
• providing for the first time a baseline of the cost of the liability against which to measure future performance
• the successful completion of the competition for the operation of the Low level Waste Repository near Drigg in Cumbria
• since year end the NDA has announced the preferred bidder for the Sellafield competition, one of the largest and most complex public procurements in the world.

With an annual expenditure of some £2.8bn, funded from a combination of Government grant and commercial income, financial management provides a significant challenge. Recognising this, and the need for a strengthened governance function, the Shareholder Executive took over responsibility for governance of the NDA in October 2007.

The Shareholder Executive responded by deploying substantially increased and senior resources. The team is working to embed a governance structure that mirrors private sector best practice as closely as possible whilst recognising the structure of the NDA as a nondepartmental public body. Responsibility for policy matters remains with the Energy Group within BERR.

March saw the appointment of Stephen Henwood as the new chairman of the NDA, an important step in ensuring that the NDA has the best possible team in place to tackle the challenges ahead. Since the year end, Ian Roxburgh has resigned as CEO and the search is underway for a successor.