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Cost overruns at Sellafield nuclear waste site to hit £136bn

The cost of managing Britain’s most hazardous nuclear waste has risen by almost a fifth to £136 billion due to a failure to set a realistic budget, the government’s spending watchdog has concluded.
Sellafield, which is home to about 85 per cent of the UK’s nuclear waste and stores the most hazardous waste, is not delivering value for money as large projects are running behind schedule and over budget, according to the National Audit Office’s latest assessment.
The site in Cumbria is operated by the Nuclear Decommissioning Authority (NDA), a mainly taxpayer-funded body, and over its lifetime will retrieve about 3.3 million m3 of waste from ageing facilities and store it in more modern silos.
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The cost of maintaining the site into the next century, when Sellafield is scheduled for demolition, is likely to cost £136 billion after adjusting for inflation, up from £84 billion at March 2019, but could run to £253 billion under a worst-case scenario.
None of the budgets for the four big projects under way at Sellafield in 2018, when the audit office last scrutinised the waste storage site, accounted for “optimism bias”, which assumes work will be delivered on time and within budget. More realistic costings were only included in 2018, despite the watchdog recommending the NDA require Sellafield to do so in 2012.
There has been some progress made since the National Audit Office last scrutinised Sellafield, including savings of about £170 million a year by operating the sites as subsidiaries rather than contracting out their management and the government indemnifying the decommissioning authority against certain risks so it no longer needs to buy insurance.
Gareth Davies, head of the audit office, said that continued underperformance would increase the cost of decommissioning considerably and “intolerable risks will persist for longer”.
“Despite progress achieved since the NAO last reported, I cannot conclude Sellafield is achieving value for money yet, as large projects are being delivered later than planned and at higher cost, alongside slower progress in reducing multiple risks,” he said.
More needs to be done to improve accountability by Sellafield’s leadership, the watchdog found, pointing towards “a problematic performance culture” that had led to it paying out £2.1 million more in staff bonuses last year than it should have done, or about £200 per person.
That was despite non-executive directors of the Sellafield board and the Nuclear Decommissioning Authority expressing concern over the approach taken to calculate the bonuses.
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An investigation was carried out by the NDA and Sellafield into the overpayment and new measures introduced in an effort to prevent it happening again.
David Peattie, chief executive of the NDA, said: “Sellafield is one of the most complex environmental programmes in the world. We’re proud of our workforce and achievements being made, including the unprecedented retrieval of legacy waste from all four highest hazard facilities.
“But as the NAO rightly points out, there is still more to be done. This includes better demonstrating we are delivering value for money and the wider significant societal and economic benefits through jobs, the supply chain and community investments.
The Department for Energy Security and Net Zero said that the NAO’s report showed “significant progress” had been made by Sellafield and the NDA but “there is still more to do”.

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