Allerdale Borough Council. Executive 10 February Consultation on the NDA s Draft Business plan

Transcription

1 Allerdale Borough Council Executive 10 February 2010 Consultation on the NDA s Draft Business plan The Subject of the Decision The NDA is seeking a response to its Draft Business Plan. The Plan covers all of the NDA s sites, but the Report and Appendix 1 address only the key issues affecting West Cumbria. The Reason for the Decision Recommendation Environmental Implications The NDA s Business Plan is an important rolling 3 year programme in which priorities for spending are set out. Providing input could influence NDA approaches, and thus maximise opportunities in West Cumbria That following agreement by the Nuclear Issues Task Group and subsequent agreement of full Council, the Strategic Manager for People respond to the NDA consultation on its draft Business Plan in the terms outlined at Paragraphs 2.1 to 3.9 of this report. There are likely to be predominantly positive and environmental implications and hazard reduction as NDA programmes are undertaken as set out. Community Safety Implications None expected would be subject to assessment by the Regulators: NII, Environment Agency and OCNS. Financial Implications Human Rights Implications Employment Implications None directly None The continuing priority of the NDA is to tackle decommissioning of high hazard plants. The Business Plan also implies that opportunity to continue Reprocessing will be developed in the Plan period providing further continuing economic benefit.

2 Health & Safety Implications Wards Affected Monitoring of the EA, NII (and OCNS) regulation would be reported to Council as programmes continue or come on stream. All Wards The Contribution this Decision would make to the Council s Key Aims Portfolio Holder Lead Member of Staff This decision would contribute towards the Councils aims in securing economic regeneration and reduced environmental impacts. Mike Davidson Charles Holmes Strategic Manager People Tel: charles.holmes@allerdale.gov.uk A detailed listed of implications is appended to the report. 1.0 Introduction 1.1 This report provides a commentary on, the NDA s Draft three year rolling Business Plan for Allerdale submitted views on the previous rolling Business Plan on 22 nd January It proposes that the Council responds to the consultation in the terms outlined from paragraph 2.onwards (The language used reflects its proposed end use as the formal response.) The NDA says: Dealing with the challenges of nuclear clean-up and waste management is enormously important for both this and future generations so I was very pleased to be appointed CEO of the NDA in October The areas of work covered by each of our six strategic themes translate into twenty-one key programmes of work our 21 Strategic Objectives. The matrix(appendix 1) below describes each of these objectives and illustrates their grouping by theme The Report has been prepared, as previously, on the basis that Allerdale Nuclear Issues Policy supports prioritisation of decommissioning of High Hazard plants, principally those at Sellafield, as well as new nuclear build and the provision of safe secure interim and long term storage / disposal under the MRWS programme. The issues reviewed are thus those that affect the timing and scale of activity in West Cumbria as set out in the Plan. 1 From the Chief Executive, Tony Fountain s Foreward. 2 From the Our Strategic Objectives section

3 1.4 The NDA issued its draft three year rolling Business Plan for 2010 to 2013 on 1st December The tighter 8 week consultation period closes on 25 January 2010, but views expressed by the Committee will be taken into account. 1.5 A summary of those elements of the Business Plan relevant to Allerdale is included in Appendices 1 to 4 corresponding in broad terms to the appendices in the Draft Plan. 2.0 Proposed Consultation Response Foreword 2.1 In the 2009 Plan a very specific question was asked about the length of time allowed for consultation. It was proposed from an NDA point of view to reduce the consultation period to 6 weeks on the basis that with a 3 year rolling format consultees will already be aware of 2 years of the programme. However, as was pointed out, such reduced consultation makes a formal Local Government response very difficult. 2.2 The 2010 Plan notes the need to give high hazards priority, but also notes the need for relentless performance delivery. The new Chief Executive mentions the importance of also getting the Magnox sites into care and maintenance. Experience from implementing previous plans is now grouped under six strategic themes. Introduction: Remit / Principal Objectives 2.3 The Introduction points out that the NDA is a Non-Departmental Public Body (NDPB) set up under the Energy Act (2004) to ensure that the UK s 19 civil public sector nuclear sites are decommissioned and cleaned up. It notes that, Our progress is monitored by the Shareholder Executive on behalf of our sponsoring department, the Department of Energy and Climate Change (DECC) who measure our performance against our Strategy and plans as well as DECC s Departmental Strategic Objective to manage the nuclear liability effectively by: a reduction in UK civil nuclear liabilities at least in line with agreed and published NDA business plans delivering minimum value for money savings on costs equivalent to 3% per annum averaged over the three year CSR period a reduction of the risk associated with high hazards and ensuring radioactive waste continues to be put into a passively safe form. 2.4 It goes on to point out that, Each of our 19 sites is operated by one of seven Site Licence Companies (SLCs) under contract to the NDA. SLCs are responsible for day-to-day operations and the delivery of site programmes. Parent Body Organisations (PBOs), selected by a competitive process, own the SLCs for the duration of their contract with the NDA. To support delivery of their remit the NDA say they, will:

4 work to establish a safe, secure, affordable and innovative market for cleanup and decommissioning drive increased performance and value for money for the taxpayer maximise revenue from existing commercial assets and operations take full account of our socio-economic responsibilities actively engage with stakeholders. 2.5 The draft Business Plan develops six Strategic Themes and 21 Strategic Objectives : Site Restoration Business Optimisation Spent Fuels Integrated Waste Management Manage Nuclear Materials Critical Enablers. The Plan then highlights the NDA s funding situation, based on: Commercial Income Direct Governent Funding Planned Income and Expenditure in 2010/2011 The Key activities in the 6 Strategic Themes are included in the Appendices. Sellafield plays a key role in 10 of them. Objectives, Milestones and Deliverables 2.6 The Plan makes clear that, each programme of work will have clearly defined objectives, milestones and end deliverables against which performance can be measured. This new approach means we can draw on the experience from across the entire estate to focus on new ways of tackling our priorities. This approach will help us in: taking a more holistic view of all our activities understanding the impact of different strategic scenarios, e.g. deferral or acceleration of work in certain areas monitoring and reporting of progress across our estate. 2.7 The NDA says its budget, includes the highest ever level of Government spending on nuclear decommissioning. Nevertheless, there are still emerging cost pressures that need to be managed within the affordability constraints imposed by a tight fiscal environment. We will continue to address these pressures by focussing on the highest hazards and risk and by seeking to reprioritise funding where possible, while ensuring that safe, secure and environmentally responsible site operations are maintained across our estate. They also note that as commercial income declines there will be increasing pressure for additional direct Government funding where expenditure cannot be reduced.

5 Funding Levels 2.8 It is thus made clear that, Direct Government funding for 2011 onwards will be agreed during the next spending review and this will be informed by the Public Value Programme (PVP) which we are currently engaging on with the Government. The PVP is expected to be complete by the time the (final) plan is published and the final plan will reflect the outcome of PVP. 2.9 The NDA s total planned expenditure for 2010/2011: is 2,774 million, of which 1,708 million will be funded by Government and 1,066 million by income from commercial operations. Planned expenditure on site programmes will be 2,564 million, while non-site expenditure is expected to be 225 million. This non-site expenditure includes skills development, Research and Development (R&D), insurance and pensions costs, fees to SLCs, implementing geological disposal and NDA operating costs along with the other activities 3. Consultation 2.10 The NDA says, of the current Plan: After the consultation, we will provide a summary of what you have told us and how we have taken this into account in our planning and final document. We will then submit our Business Plan to the Secretary of State for the Department of 3 The NDA is required to achieve value for money savings of at least 9% over the three year settlement period and these savings will need to be found from the planned expenditure

6 Energy and Climate Change (DECC) and to the Scottish Ministers for their approval by 31 March 2010, before publishing our approved Business Plan 2.11 Allerdale Borough Council can again welcomes the principle of a three year rolling Business Plan, as it provides greater transparency and predictability in the NDA s work going forward. However, significantly less detail is given overall, and particularly for 2012/13 funding. It will be important that decommissioning funding remains secure, despite this, for the key activities at Sellafield, which are driven by regulatory safety assessments We note that only limited reference is made to nuclear new build. A major exercise is underway by the West Cumbria Partners to secure Nomination and ensure grid connection for new nuclear build on land adjoining Sellafield. Positive support for new build by the NDA to maximise its asset use is welcomed, and the commitment of the sale of land north of the site to the Ibedrola consortium is thus timely Sellafield has played a pivotal role within the nuclear industry since the 1940s. Site operations include fuel reprocessing, fuel fabrication and storage of nuclear materials and radioactive wastes. Calder Hall, located on the site, was the world s first commercial nuclear power station. Generation started in 1956 and ceased in Windscale, also located on the site, comprises three reactors. Two of the reactors were shut down in 1957 and the third one was closed in Substantial damage by fire to one of the reactors in 1957 has created significant additional decommissioning challenges. Planned expenditure for 2010/2011 c. 1,200 million The Sellafield Life Time Plan (LTP) is in the process of being rebuilt. This includes a review of all dates, outputs and quantities. More detailed information, including milestones for each project, will be available towards the end of January The NDA point out that there may therefore, be significant changes. More detailed performance indicators will become available following this review. Each of the key activities identified at Sellafield will run throughout the three years of the Business Plan. Full details of the Activities, Milestones and Performance Indicators are given in Appendix Appendix 3 and as well as Appendix 4 relate to two key aspects of the key issue of Radioactive Waste Management, with significant outcomes having happened in 2009/10. UK Nuclear Waste Management Limited were awarded the PBO contract for LLWR Ltd in March 2008 and since then site activities have focussed on the construction of vault 9, preparation of the Environmental Safety Case and development of the National LLW Strategy. The focus for the site during the plan period will be on the implementation of the National LLW Strategy as well as continuing to develop innovative waste management solutions. Planned expenditure for 2010/2011 is some 35 million. The key milestones set out are:

7 Final refinement of the Environmental Safety Case prior to submission to EA in May 2011 Initiate a project to significantly improve LLW waste forecasts across the estate Implement Segregated Waste Services to facilitate the Waste Hierarchy and make available to all consigners including metals treatment, combustible waste management and Very Low Level Waste (VLLW) disposal Report to Cumbria County Council in line with Vault 9 planning consent to demonstrate diversion of waste through the Segregated Waste Services Complete Post Operational Clean Out (POCO) of secondary Plutonium Contaminated Material (PCM) facilities Implement new consignor contracts Introduce new LLW packaging containers for improved efficiency Collaborate with other consignors/slcs to implement national solutions 2.14 A significant ratcheting up of the NDA s Radioactive Waste Management Directorate s (RWMD) work can now be expected, with the West Cumbria Partners being involved together in working towards the next steps in the MRWS process. Government has made the NDA the implementing organisation, responsible for planning and delivering the geological disposal facility. The RWMD is currently running this programme. RWMD is being developed into a competent delivery organisation which is capable of applying for and holding regulatory permissions. In due course, it is intended that RWMD will be established as a wholly owned NDA subsidiary Site Licence Company (SLC) The programme to deliver geological disposal and provide radioactive waste management solutions covers the following objectives: support Government in their Managing Radioactive Waste Safely programme develop the specification, design, safety case and environmental and sustainability assessments for the disposal system and obtain regulatory support in conjunction with waste producers, identify and deliver solutions to optimise the management of higher activity waste develop and maintain an effective organisation and secure resources to deliver the geological disposal facility programme obtain and maintain stakeholder support for our activities deliver a focused R&D programme to support geological disposal and optimised packaging solutions RWMD will work closely with communities to deliver geological disposal and we will continue to develop our stakeholder relationships.

8 3.0 Matters no longer fully covered 3.1 In its response a year ago, Alllerdale commented at some length on the far fuller Plan then issued. The Government Departmental Strategic Objective to establish a safe affordable, innovative and dynamic market for clean-up and decommissioning was welcomed. It was pointed out that Allerdale believed that every effort should be made by the NDA to maintain the necessary socioeconomic support. 3.2 In regard to the Principal Objectives, the Council welcomed the overarching goals (p15) and the Principles in the 2008 Appendix 1, (paragraph 5.1). On delivering Hazard and Risk Reduction (p16) we agree with the priority afforded to tackling high-hazard and high risk facilities, particularly at Sellafield. On Decommissioning and Clean up (p18) reference was made to the end-states issue. The Council committed to assist the NDA to, develop and refine.. strategies for decommissioning and clean up and land quality management. 3.3 On Maximising Commercial Value from NDA assets, reference was made to Allerdale being involved in detailed consultation with the West Cumbria Partners. Allerdale. We expressed concern that the current Business Plan again made no reference to retaining an option for resumption of reprocessing (2008 Business Plan page 19, + Appendix 1, paragraph 5.4). The Government s Energy White Paper published in January 2008 had left a door open to future reprocessing; and the Council still hopes to see this reflected in the final Business Plan. In addition,, the Council expressed its support for future reprocessing in response to the consultation on the Future of Nuclear Power, recognising that spent nuclear fuel may be a valuable resource as natural uranium reserves deplete. 3.4 Regarding safe and secure management of radioactive waste and materials, the issue of provision of new storage facilities for ILW & HLW on the Sellafield site is a locally significant, but also strategic, issue. It still needs to be addressed alongside the MRWS process and to fully involve the Cumbria Councils as policy makers and planning authorities at the early option development stages. With the NDA having then taken responsibility for MRWS implementation, the Council wished to be reassured that the programme is adequately financed and not at risk from cuts due to cost over runs or loss of revenue in other areas of NDA work. Regarding LLW and VLLW, the Council considers that the issues raised by market driven speculative proposals needs to be managed and steered by the NDA. 3.5 Regarding the determination of, the scope of the liabilities and identify opportunities for their reduction (Business Plan p22, Appendix 1, paragraph 5.7), the Council will continue to monitor the successful implementation and influence of UK Nuclear Waste Management Limited. We note that Lifetime Plans would clearly be subject to significant amendment if anticipated outputs are to be achieved. The Strategic Reviews on MOX and THORP should give very considerable weight to the importance of ensuring that the significant socio-

9 economic benefits to West Cumbria of continuing long term reprocessing work at Sellafileld 3.6 On Socio Economic Support, the Council was concerned at its characterisation as a secondary objective, but still welcome the financial support provided by the NDA for skills development (see paragraph 5.4 Appendix 1 below) but did not consider a total allocation of 10m in each of the three years of the draft Business Plan to be sufficient. The allocation is unchanged from than reported in 2008/9 and it is not guaranteed (being subject to planned efficiency savings). Skills, R&D and the Supply Chain 3.7 Allerdale strongly supports the NDA s investment in skills, R&D and the supply chain. The Council would wish to see the draft Business Plan make a strong commitment and reference to growing capacity within local communities to deliver the services and products required to support the NDA and SLCs. Enabling Objectives 3.8 Regarding Competition (Business Plan p25, Appendix ), Significant, on target, progress has been made in developing competition. The letting of the Sellafield PBO Contract was welcomed last year. However, it is unclear in detail how, through the present slimmed down Plan, Nuclear Management Partners Ltd will proceed during this Plan Period. 3.9 Regarding the NDA s requirement from last year to control costs and drive efficiency, Allerdale note the new Chief Executive s drive to achieve relentless performance delivery, but are concerned that this may be at the expense of effective community and local engagement. 4.0 Recommendation 4.1 That following agreement by the Nuclear Issues Task Group and subsequent agreement of full Council, the Strategic Manager for People respond to the NDA consultation on its draft Business Plan in the terms outlined at Paragraphs 2.1 to 3.9 of this report. file ref date Charles Holmes Strategic Manager - People

10 Report Implications Please delete where applicable. Community Safety N Sport N Financial N Leisure N Legal N Tourism Y Social Inclusion N E-Government N Human Rights N North West Regional Y Youth Issues N European N Ethnic Minority Issues N National Y Older People Issues N Partnership Y Disability Issues N Heritage/Culture N Employment (external to the Council) Y Planning Policy Y Employment (internal) N Enforcement N Environmental/sustainability Y Transport N Environmental/visual Y Asset Management N Health Y Health & Safety Y Is this a statutory recommendation? Is this a key decision? N N Has a risk assessment been undertaken? N Wards affected All.. Background papers None..

11 Appendix 1 - Relevant Extracts of the NDA Business Plan Six Strategic Themes

12 2.0 Activities within each Strategic Theme of relevance to Allerdale

13

14

15 Appendix 2 (following) extracted from the Plan sets out the roles being undertaken at the various sites:

16 The Activity over the coming 3 years at Sellafield is covered in the following extract from Appendix 3 in the Plan:

17 Appendix 3 contd/

18 In the context of this Report, the role of the LLWR near Drigg is of particular relevance:

19 Appendix 4 sets out the Role of the Radioactive Waste Management Directorate and is of particular significance to West Cumbria.