Transparency data

Sellafield Replacement Analytical Project: Accounting officer assessment 2020 (HTML)

Updated 12 June 2023

Department for which the accounting officer who made the assessment is responsible:

Department for Business, Energy and Industrial Strategy

Project title:

Sellafield Replacement Analytical Project (RAP)

Main scheme project stage:

Outline Business Case (OBC) approved by HMG in January 2020. Project is currently in the Detailed Design phase.

Introduction

It is normal practice for Accounting Officers to scrutinise significant policy proposals or plans to start or vary major projects, and then assess whether they measure up to the standards set out in Managing Public Money. From April 2017, the government has committed to make a summary of the key points from these assessments available to Parliament when an Accounting Officer has agreed an assessment of projects within the Government’s Major Projects Portfolio.

This Accounting Officer Assessment was made of RAP following its Outline Business Case (OBC) approval and progression into the detailed design phase. I have made the assessment as the Principal Accounting Officer for Business, Energy, and Industrial Strategy, noting RAP is routinely monitored by the Accounting Officer for the Nuclear Decommissioning Authority, an arms-length body of BEIS.

Background and context

The Sellafield Analytical Services Programme is vital to delivering the Sellafield site and NDA mission: “to deliver safe, sustainable and publicly acceptable solutions to the challenge of nuclear clean-up and waste management.” Without analytical services, Sellafield would be unable to deliver its statutory obligations, or safely complete high hazard risk reduction operations and programmes anywhere on site. Accordingly, the demand for analytical services at Sellafield will continue throughout the site lifetime, currently forecast to be around 2120.

In the Sellafield context, ‘analytical services’ refers to the statutory and regulatory requirement to assess and subsequently categorise the chemical and/or radiological properties of hazardous material across the site. Once correctly categorised, this waste material can be safely and efficiently prepared for long-term disposal and storage in a future geological disposal facility.

Delivering replacement analytical facilities via RAP is central to the overall Analytical Services Programme, as it provides the capabilities to deliver essential analysis of radioactive materials safely and efficiently to 2070. The new analysis capabilities provided by RAP are required as soon as practicable due to the untenable condition of the existing on-site facilities, most being over 70 years old – they do not meet modern standards and are in terminal decline. High levels of risk mitigation, ageing asset care challenges, and reduced operational output are the daily norm.

The existing facility is a large, single story, low-rise building housing numerous integral laboratories, deep in the heart of the Sellafield active area. It houses the majority of the analysis laboratories, equipment and personnel required to assess the materials being generated by the decommissioning of the site.

Once complete, the new facilities will be provided in the refurbished Central Laboratory already on site and will be operated by the National Nuclear Laboratory (NNL). This will provide a capability to deliver the primary mission need for Sellafield, but also be available to support the wider UK HMG agenda; programmes such as New Nuclear and related nuclear research programmes.

The current Office of Nuclear Regulation (ONR) stance that supports continued on-site- operations and associated analysis in the degraded facility is contingent on continued progress to replace the existing analytical facilities. The ‘As Low as Reasonably Practicable’ (ALARP) statement made by the Duty Holder, supporting continued operations in the current facility, and accepted by the ONR, underpins this and is valid up to 2030.

Assessment against the Accounting Officer standards

Regularity

The Energy Act (2004) established the Nuclear Decommissioning Authority (NDA) as a non-departmental public body to lead the clean-up and decommissioning work at 17 UK sites on behalf of government. NDA is sponsored and funded by the Department for Business, Energy and Industrial Strategy (BEIS) which approves NDA plans. The latest NDA Strategy review was presented to parliament in March 2021. As a Non-Departmental Public Body, the NDA’s annual spending limits are set by Parliament, combining HMG grant with income from commercial activities.

Sellafield Ltd is a Site Licence Company operating under a nuclear site licence and is responsible to the NDA for day-to-day operations and the delivery of site high hazard risk reduction programmes. Analytical Services and the associated facilities provide essential support to the safe and legal operation of the site.

The RAP project has a sound legal basis, Parliamentary authority through BEIS to the SRO, and Treasury approval. Its funding is controlled as part of the Sellafield Ltd annual site funding allocation, provided by NDA. It reports on progress through the quarterly Government Major Project Portfolio (GMPP) submission.

RAP is the third project to be delivered through the Programme and Project Partners (PPP), a consortia of delivery partners – Kellogg Brown and Root Ltd., Jacobs (formerly Woods), Morgan Sindall, and Doosan Babcock Ltd. This major project delivery approach for Sellafield Ltd. was set out in the PPP FBC, approved by HM Treasury in March 2019. RAP is progressing towards detailed design completion, with the Final Business Case (FBC) forecast for submission in Q1 CY 2025 to HM Treasury Approval Process.

Overall assessment: My assessment is that the regularity test is satisfied.

Propriety

RAP is assessed as proper and compliant with parliamentary control procedures and expectations.

RAP is subject to considerable scrutiny and challenge through Sellafield Ltd Project, Programme, NDA and BEIS/IPA governance and 1st-3rd party assurance arrangements. This ensures all significant spend and procurements are scrutinised and tested as value for money, and subject to appropriate financial and process oversight. RAP is designated as a GMPP project and is subject to no less than annualised IPA assurance reviews.

Overall assessment: My assessment is that the propriety test is satisfied.

Value for money

This assessment has considered Value for Money (VFM) for RAP in light of 4 key points:

1. Provision of an effective Analytical Service is a strategic imperative in underpinning safe management of nuclear materials and operations on the Sellafield site. Current facilities will not continue to support site indefinitely and are in terminal decline, demanding enhanced safety and maintenance measures be enacted.<
2. Provision of RAP capabilities will support a wider HMG/BEIS agenda in the future, delivering the benefits of a National Nuclear Capability required to ensure the UK remains at the forefront of the global nuclear industry.
3. Green book estimating practices are deployed and assured throughout the project lifecycle.
4. Extensive Optioneering is ongoing to underpin options from a cost and schedule perspective. This is conducted against the NDA value framework, supported by Reference Class Forecasts that are used to develop realistic bounding estimates of what options ‘could cost’.

In compiling the OBC for RAP, 11 initial options were down selected to 4 primary options. These are summarised in the table below. These options will be re-evaluated in a due diligence review by the Sellafield Board, and through a package of studies led by the Programme. Noting the revised costs and subject to the study outcomes, the project will again be assessed and tested against the value for money argument, up to and including the FBC stage.

	options	assessment	OBC decision
1	do nothing	not viable - the risk of indefinitely operating the existing facility is intolerable	rejected
2	refurbish existing on-site facility	not viable - as refurbishing the current facility whilst continuing the essential high-hazard daily analysis is untenable	rejected
3	new build	was a viable option but rejected due to: - higher cost forecast and a longer schedule that was beyond the strategic need date (December 2030) - adds additional cost to the future site decommissioning burden, by adding a new active building, ultimately needing remediation - less preferential from a sustainability/Carbon reduction perspective	rejected
4	refurbish the National Nuclear Laboratory Central Lab	chosen option – OBC forecasts indicated it to be the most economically advantageous from a cost, schedule and overall VfM perspective	chosen

Overall assessment: My assessment is that the value for money test is satisfied.

Feasibility

RAP remains feasible as determined at OBC. Whilst complexity is inherent in the design, the project is configured to overcome and deliver, cognisant of the challenges.

The NDA Board observed that the NDA Accounting Officer, prior to the NDA Board approval of the outline business case in July 2019, had requested an independent review of the business case, mindful that the plan to adapt an existing building could contain unknown risks. That review concluded that the project was feasible on the basis that more than 55% of the project is an extension to the existing building and is therefore effectively ‘new build’ and the risks due to adaptation of an existing building were relatively low due to only limited modification to existing assets (circa 27%).

Furthermore, the interfaces with existing building operations had been minimised and those that remained were well understood and planned for. Learning from other recent projects at Sellafield had been applied within the RAP Project.

First, second, and third-party assurance has confirmed that remaining challenges are being actively mitigated by the project but remain challenging throughout the project delivery lifecycle.

The strategic assumption for RAP capability to be operational is no later than Dec 2030. This current forecast is set against the date by which the Sellafield Ltd Analytical Services Programme can justify operations to safely continue in the existing facility.

Overall assessment: My assessment is that the feasibility test is satisfied.

Conclusion

As the BEIS Accounting Officer, I have considered the assessment of Sellafield Replacement Analytical Project. The case received scrutiny and approval by the BEIS Accounting Officer in January 2020. It has undergone relevant scrutiny within the NDA Group, and I am content to align my approval to this given the information provided to BEIS at that date.

I have prepared this summary to set out the key points which informed my decision. If any of these factors change materially during the lifetime of this project, I undertake to prepare a revised summary, setting out my assessment of them.

The summary included in this letter will be published on the government’s website (GOV.UK). Copies of this letter will be deposited in the Libraries of the House and sent to the Comptroller and Auditor General and Treasury Officer of Accounts.

Sarah Munby
Permanent Secretary, BEIS
January 2020