Corporate report

NDA Annual Report and Accounts 2018 to 2019

Published 4 July 2019

OVERVIEW OF PERFORMANCE

2018 to 2019 progress

An overview of our business and annual performance

Chairman’s statement

Tom Smith, NDA Chairman

Our teams on the ground bring passion, determination and innovation to the challenges we face.

I look forward with anticipation and confidence as our improvement activities start to make a positive difference across the group.

Our performance

Clean-up of the UK’s historical nuclear facilities is an essential task for the country, and we’re committed to carrying out our mission safely and responsibly while delivering maximum value for taxpayers. Safety performance, one of the Board’s top priorities, has been satisfactory, but we see opportunity for improvement and more sharing of safety-related experience and methods across our estate.

Our sites made steady progress during 2018/19 in our long-term clean-up mission. Magnox placed its first site into formal care and maintenance, with the approval of the Office for Nuclear Regulation. Sellafield ended fuel reprocessing operations, as planned, at one of its two reprocessing facilities. Our subsidiary Radioactive Waste Management Ltd launched the consultation and dialogue process to identify a volunteer host community for a Geological Disposal Facility.

One NDA

Alongside continued progress in the decommissioning challenge, we have over the last 2 years undertaken a wholesale review of our resources, our capability, our structure, our culture and our relationships with the 17 sites that make up our estate.

That work reached a conclusion in the final months of 2018/19. We enter the new financial year as a substantially renewed organisation with a new set of principles that define the way we, and the sites, will work together. Our headline description for this is ‘One NDA’ and the aim is to create a foundation for collaborative working that will enable us to achieve continuous improvement in everything we do.

We hope these changes, which will take some time to mature and embed themselves, will be a positive and effective response to the extensive public scrutiny that the NDA has rightly been under. I am excited and optimistic about the possibilities that lie ahead for us.

Workforce and stakeholders

As I travel around the country visiting different NDA sites, I’m continually impressed by the commitment of our people. Our teams on the ground bring passion, determination and innovation to the challenges we face.

Our relationships with the surrounding communities are also vitally important. We welcome the engagement we have with site stakeholder groups, politicians and local organisations, who challenge our approach and hold us to account for our decisions. Our constructive dialogues also enable us to allocate our socio-economic investments to projects that help sustain communities affected by our decommissioning activities. We depend on their support both now and in the future.

Board changes

Dr Adrian Simper has stepped down from the NDA Board after more than 4 years. On behalf of the Board, I thank Adrian for his service as a Board member and I’m delighted that he is continuing to support the Board through his vital work as our Group Director of Nuclear Strategy and Technology.

Over the course of 2018/19, we welcomed Lorraine Baldry as Chair of Sellafield Ltd, and Lawrie Haynes as Chair Designate at Magnox Ltd. Both bring many years of experience to their roles.

Thanks

I’d like to pay tribute to everyone involved in our mission, particularly the workforce, our regulators, government sponsors and colleagues and the community stakeholders who live near our sites. They all provide indispensable support and important challenge to us, and I look forward to continuing these partnerships.

Tom Smith
NDA Chairman
18 June 2019

Chief Executive’s review

David Peattie, NDA Accounting Officer and Chief Executive

Our role in cleaning up the nuclear legacy is of national importance.

A year of change and progress has set a strong platform from which we can build a more cohesive NDA group to drive the delivery of our mission.

We’re here to clean up the legacy of the past. Our role is to ensure that this task - of significant national importance - is carried out safely and efficiently, ensuring both people and the environment are safeguarded at all times.

We have again ensured spending remains below the annual limit set by the government and exceeded our revenue targets, generating income of £1.0 billion to supplement the £2.2 billion government allocation.

When I took up my role 2 years ago, I asked for a fundamental re-assessment of how we should move the businesses forward. The changes we have made are the most significant since the NDA was established almost 15 years ago. And while we still await the conclusion of the Magnox Inquiry, I am seeing real momentum among our people to seek out new approaches to deliver our mission in a better way.

During the year, we welcomed the Nuclear Sector Deal, which puts nuclear at the core of the Industrial Strategy. We are working closely with our businesses and supply chain to seek innovation that will reduce the costs of decommissioning.

We have also published our group-wide Equality, Diversity and Inclusion Strategy and are working towards a more diverse and inclusive culture. This includes key focus areas such as workplace behaviours, fairness and meritocracy, mental health and well-being and innovation. Examples of progress include our focus on raising awareness and implementing employee education workshops with regard to bullying and harassment, and training employee volunteers to become mental health champions. I am also pleased to say that, during the past year, all permanent NDA employees signed up to our newly published code of conduct.

Developments in the broader nuclear sector have led to some uncertainty, particularly around plans for new build. Regardless of this, our clean-up work must continue. We’re working hard to ensure that we are able to attract young people leaving school, college and university so we have access to the skills and bright young minds we will need to deliver our mission.

Progressing our decommissioning journey

We’re approaching a new era at Sellafield, transitioning from operations to environmental restoration, with reprocessing at the Thermal Oxide Reprocessing Plant (THORP) at an end and Magnox reprocessing following in 2020. We’re also now routinely removing waste from some of the oldest and most hazardous plants on the Sellafield site.

We’ve delivered the UK’s first commercial nuclear power station – Bradwell – into care and maintenance. And at the retired Wylfa Magnox power station on Anglesey, we have removed 80% of the used fuel with the remainder to be removed this year. This will leave Calder Hall in Cumbria as the final Magnox power station with fuel in its reactors.

Continued progress has been made removing fuel from the Dounreay Fast Reactor, and the Dounreay Materials Test Reactor is ready for demolition after 10 years of preparatory work.

Meanwhile, our transport businesses, International Nuclear Services (INS) and Direct Rail Services (DRS) continue to expand their markets and generate revenue for the UK taxpayer.

Finally, and very importantly this year, we launched the consent-based process to identify a volunteer site for geological disposal of higher-activity nuclear waste, a process which has communities at its heart.

Shared learning

Across the entire NDA group, safety and security remain our enduring priorities. Last year we held our first NDA group-wide safety event which established a common approach to sharing learning and best practice across all our businesses.

I am always inspired by the dedication and passion of our people to make a difference. Their skills are vital to our performance and, along with the expertise of our supply chain, enable us to share our learning internationally. When I visited Japan recently as chair of our jointly owned shipping business, PNTL, I was pleased to note the esteem in which UK capability is held overseas, particularly with respect to the ongoing clean-up of the Fukushima Daiichi nuclear power plant.

Constructive dialogue with a wide range of industries and overseas nuclear organisations was a positive feature of our successful supply chain event which attracted a record 1,700 visitors.

A look ahead

The year ahead will be busy as we continue our work, prepare for a government spending review and embed new ways of working across our businesses, including Magnox which will become an NDA subsidiary from September 2019. I’m personally motivated by the opportunity the NDA group has to make a real difference, as it delivers one of the most important and challenging environmental restorations in the world.

Finally, this year we are creating “One NDA”, a stronger organisation with a more robust and standardised governance framework. For current and future employees, I am determined to establish the NDA group as a great place to work, where people are not just motivated by the importance of our mission, but by our culture, values, focus on delivery and the difference we are making today for future generations.

David Peattie
Accounting Officer and Chief Executive
18 June 2019

Financial Overview

This year over £3 billion has been spent tackling the nuclear legacy while good progress has been made across the estate.

Securing maximum value from the funds allocated by Parliament, while at the same time balancing this against income uncertainty, remains a perennial challenge for the NDA.

It is pleasing to note that over the year we have again remained within the key parliamentary control totals, and the £3.2 billion expenditure has enabled significant progress to be made across the estate, as detailed in this report.

Behind the headline income of £1 billion, there have been 2 significant changes. During the year, the NDA implemented IFRS 15, a new accounting standard for the recognition of revenues from contracts, details of which can be seen in the notes to the financial statements. The end of reprocessing operations at Sellafield’s Thermal Oxide Reprocessing Plant (THORP) produces a further change in the NDA’s revenue profile, bringing to an end a long period of income generation.

This is the penultimate year of the spending review settlement agreed in 2015. The spending review settlement required a commitment from the NDA to deliver efficiency savings of £1 billion, and we continue to make good progress towards achievement of that target. Preparations are well under way for the next spending review, which will see a significantly lower level of income from commercial activities and demand greater focus on cost efficiency.

On the understanding that future BEIS sponsorship and parliamentary approval will continue, we will consider it appropriate to adopt a going concern basis for the preparation of the financial statements.

The NDA corporate centre has grown during the year, reflecting the first steps in moving to a new group operating model (One NDA) and the need to increase the capacity and capability of the organisation ahead of the transition of Magnox into a subsidiary from September 2019.

This will mean that over 90% of spend will be under direct NDA group controls. The changes in the NDA to date will serve to address the initial findings of the Public Accounts Committee and the Magnox Inquiry and provide a stronger base from which to address the findings of the full report when published.

We have generated a budgetary surplus of £32 million in the year, returned to HM Treasury.

A change in the basis for calculating discount rates (including revised inflation assumptions) by HM Treasury has driven a £104 billion decrease in the discounted nuclear provision. The underlying undiscounted provision has increased in the year by £3 billion principally due to inflation. Details behind the key numbers are shown in the financial statements.

David Batters
Group Chief Financial Officer

Performance against financial targets

Performance against financial targets

Note: the figures in the above graph are prepared on the basis of government financial reporting (HM Treasury’s Consolidated Budgeting Guidance) which differs in part from the basis used to prepare the financial statements.

One NDA

Our mission is to clean up the UK’s earliest nuclear sites safely, securely and cost-effectively with care for people and the environment.

Our business model

Our business model

For a more detailed illustration of the estate structure and the organisations covered by this Annual Report and Accounts see the NDA organisational structure.

Our vision is to deliver our mission more creatively, transparently and efficiently, to be a great place to work and to be trusted to do more in the UK and globally.

The Nuclear Decommissioning Authority (NDA) is a non-departmental public body created through the Energy Act 2004.

The clean-up mission is led by the NDA on behalf of government. Our plans for cleaning up each of our sites must be approved by the Department for Business, Energy and Industrial Strategy (BEIS) and Scottish Ministers who provide the policy framework.

Our sites

Our 17 sites are situated across England, Scotland and Wales and are grouped, regulated and controlled under 6 site licence companies (SLCs). These site licence companies are responsible for the safe operations and decommissioning of historic nuclear activities, with extensive support from the supply chain.

As well as its site licence companies, the NDA group comprises a number of specialist wholly owned subsidiaries, responsible for a wide range of activities including rail and shipping services, insurance, property and developing solutions for dealing with the long-term disposal of high and intermediate level waste for England and Wales.

A number of our sites are home to the UK’s pioneering Magnox nuclear reactors that have helped generate up to 30% of the UK’s electricity over the last 40 years or more, and Sellafield, in West Cumbria is our largest and most hazardous nuclear site.

Our 17 sites are at differing stages of decommissioning and each have their own unique challenges. Our goal is to continuously seek ways to optimise the way we work and share best practice across our entire estate, so we can deliver more for less and drive real value for the taxpayer.

How we are funded

NDA is publicly funded through BEIS and our total planned expenditure is voted upon annually by Parliament. The revenue we generate through commercial activities across the NDA group reduces the level of public funding required from government.

These activities are mainly spent fuel and nuclear materials management and transportation services.

Within the constraints of affordability, we seek to deliver best value for the UK taxpayer by focusing on reducing the highest hazards and risks, while ensuring that safe, secure and environmentally responsible operations at our sites are maintained.

One NDA group

One NDA group

What we do really matters. We’re making a difference.

As one NDA group, we’re proud to have one of the most advanced nuclear workforces in the world.

More than 16,000 employees are part of our mission to clean up the UK’s earliest nuclear sites.

We’re focusing on dealing with a complex legacy built up from the 1940s onwards – with safety, security, environmental responsibility and value for taxpayers’ money our top priorities. We’re also developing the UK’s waste management infrastructure to reduce the risks to this and future generations.

We deliver our mission through our subsidiaries and site licence companies. The NDA’s role is to support our sites, businesses and employees, optimizing delivery and managing performance by providing group leadership, strategic focus and governance.

We take an estate-wide view of how we deliver our mission, and we secure and allocate the funding to clean up our 17 sites. We work with our businesses, site licence companies and contractors to ensure that:

• the right options are considered and chosen in line with government policy
• the right plans are in place for the long term to deliver the safest and most cost-effective clean-up
• the right skills and resources are available
• the right technology is developed
• where appropriate, local communities are supported economically and socially during and after the clean-up mission

In 2016, Sellafield Ltd became a subsidiary of the NDA. Taking direct ownership of Magnox Ltd from September 2019 will allow us to further use our unique advantage of having a group-wide view to simplify and standardise our approach, removing barriers, supporting research and development and seeking innovation to deliver decommissioning more quickly and efficiently for the taxpayer.

As well as dismantling facilities, cleaning up sites and helping to secure a more sustainable future for the communities surrounding our sites, we have to fulfill the responsibilities placed upon us by the Nuclear Sector Deal. This includes growing a highly skilled workforce for the future, seeking ways to reduce the cost of decommissioning, and addressing the issue of gender balance.

Our mission

UK map of our sites

• 1,046 hectares of designated land on nuclear licensed sites
• 10 businesses
• 17 nuclear sites
• 15,988 employees across the estate
• 800+ buildings to be demolished

Telling the story of progress against the NDA strategy

Delivering our mission

We break the mission down into 4 strategic themes, enabling work to be clearly defined and prioritised.

These areas are closely linked. However, the most urgent task is dealing with sites’ highest hazard materials: spent fuel, nuclear materials and highly radioactive wastes. Once the inventory has been made safe, the redundant nuclear facilities can be dismantled and demolished.

SPENT FUELS

Our strategy defines our approach to managing the diverse range of spent fuels for which we are responsible, which are divided into Magnox, Oxide and Exotic.

Spent fuel is removed from the reactor for temporary storage in a pond or dry store until it can be dispatched to Sellafield.

Reprocessing extracts materials (plutonium and uranium) that could potentially be re-used and also generates highly radioactive wastes.

The NDA’s strategy is to bring the reprocessing programme to an end. One of the reprocessing plants (THORP) has already shut and the Magnox reprocessing plant is due to complete its mission in 2020.

All remaining spent fuel will be safely stored until a permanent solution for disposal is available.

NUCLEAR MATERIALS

Our strategy defines our approach to dealing with the inventory of uranics and plutonium currently stored on some of our sites.

These nuclear materials are by-products from different phases of the fuel cycle, either manufacturing or reprocessing. All nuclear materials must be managed safely and securely; either converted into new fuel or immobilised and stored until a permanent UK disposal facility is available.

Consolidation of plutonium (at Sellafield) and uranics (at Capenhurst) is currently being carried out so the materials can be managed in an appropriate and effective way.

INTEGRATED WASTE MANAGEMENT

Our strategy considers how we manage all forms of waste arising from operating and decommissioning our sites, including waste retrieved from Legacy facilities.

Managing the large quantities of radioactive waste from electricity generation, research, the early defence programme and decommissioning is one of the NDA’s biggest challenges. Some of this radioactive waste is in a raw (untreated) form, some has been treated and is being interim-stored and, in the case of low level waste, some has been disposed of.

Retrieving, treating and interim-storing the radioactive waste from Sellafield’s four legacy ponds and silo facilities is the NDA’s highest priority.

SITE DECOMMISSIONING & REMEDIATION

Our strategy defines our approach to decommissioning redundant facilities and managing land quality in order that each site can be released for its next planned use.

After the buildings on our sites have been decommissioned, decontaminated and dismantled the land will be cleaned up to allow it to be released for other uses. At that point its ownership would transfer to the new user of the land.

The NDA is currently assessing alternatives for the final stages of decommissioning that could lead to earlier release of land, continued employment and simpler regulatory controls.

The NDA mission

Progress to 2019

Since it was established in 2005, the NDA has made excellent progress in dealing with some of the most complex nuclear risks in the world.

We have identified the steps that we need to take to deliver our mission. We call these strategic outcomes. Two of our strategic outcomes have been achieved and good progress is being made with the safe management of nuclear inventory and reduction of its risks. More strategic outcomes will be achieved with the closure of the reprocessing facilities and the building of new modern treatment and storage facilities to manage nuclear material and waste - ultimately working towards the final disposal of nuclear inventory and the release of land for other economic uses.

Progress to 2019 timeline

Health, safety, security, safeguards and environment overview

It’s our priority to carry out our technically-complex mission safely and efficiently, ensuring people and the environment are safeguarded at all times.

We set clear expectations across all of our businesses for the highest performance in environment, health, safety and security that reflects both international standards and policies, and relevant good practice from UK industry. While fulfilling obligations as holders of licences, permits and authorisations rests with our site licence companies, it is the NDA’s duty to have particular regard for the safety of people handling hazardous substances, the protection of the environment and security. We take our responsibilities seriously and monitor performance, holding the businesses to account.

We have started to work with our site licence companies to produce 5 year Health, Safety and Environment plans. This work will culminate in a single plan for the whole NDA estate which will be monitored for delivery by the NDA Group Director of Nuclear Operations.

We have responsibilities for the safety and well-being of our staff, the security of information that we use, and our own impact on the environment. In October 2018 we held our first NDA groupwide safety and well-being event attended by over 200 colleagues from across the group. This was an opportunity to share good practice from across our businesses and drive innovation.

Building on this success, we are planning to hold our second event in September 2019, which will recognise the contribution of our people through the introduction of Safety and well-being awards.

During 2018/19, Mental Health was a focus for the NDA. To support the standards set out in the ‘thriving at work’ guidance, we established an NDA group-wide mental health delivery group, sponsored at Executive level by Dr Adrian Simper. The group provides an opportunity for each business to communicate, share and promote mental health at work. During 2019/20, we will be collaborating with our businesses on a group-wide mental health awareness campaign.

More details on our performance in the health, safety, security safeguards and environment section.

Overview of site performance

SELLAFIELD

Sellafield is a wholly owned subsidiary of the NDA

The long-term nature of our business means that delivery this year is a stepping stone for future years. Our ability to deliver risk and hazard reduction tomorrow relies on our ability to become a more efficient organisation today.

Sellafield is changing

On behalf of the NDA, we are doing this work safely while maintaining the security of the site and nuclear assets. In 2018/19 our safety performance was mixed. We had no significant nuclear site incident reports for the second year running, but we did have a number of lost time accidents, environmental conditions and personal contamination events that impacted on our overall safety and environmental trends. This resulted in some of the annual metrics being less favourable than previous years. We’re continuing to focus on improvements in error prevention and creating the right mindset and environmental awareness. One of the ways that we are making Sellafield safer is through the clean-up of our highest hazards on the site, including:

• continuing decommissioning of nuclear facilities
• receiving, reprocessing and storing used nuclear fuel
• managing the UK’s special nuclear materials
• delivering capital projects to support the mission

The end of reprocessing in the Thermal Oxide Reprocessing Plant (THORP) in 2018, and the planned cessation of Magnox reprocessing in 2020 represent a significant milestone achievement for our employees past and present, and mark a seismic shift in our focus towards environmental remediation.

This year we made good progress in the clean-up of our highest hazard facilities including:

• installing retrievals equipment on the Pile Fuel Cladding Silo (PFCS) and the Magnox Swarf Storage Silo (MSSS)
• continuing to retrieve fuel, waste and sludge from the First Generation Magnox Storage Pond and Pile Fuel Storage Pond
• re-purposing existing waste plants so we can retrieve waste from the ponds and silos before new waste storage buildings are available

In 2019/20 we will start retrievals from the MSSS and the PFCS. This milestone will mean that all 4 legacy buildings will be routinely exporting waste for processing and safe, long-term, storage.

A more visible change on the site was the start of work to remove the diffuser from the ventilation stack damaged by the Windscale Fire in 1957.

Our challenge is to deliver more hazard and risk reduction by becoming more efficient. This means reducing the cost of work at Sellafield, diverting money from overheads to front line decommissioning, retraining and reskilling people into priority work, and working differently with the supply chain.

Changing the way that we work with our supply chain

We cannot deliver the challenges alone. We rely on our supply chain partners, from the experience and capability of global companies to the innovation and agility of small to medium-sized enterprises.

Our long-term alliance frameworks are delivering benefit in decommissioning, design and infrastructure. In 2019 we extended this approach to project management through a 20-year contractual arrangement – Programme and Project Partners, where Sellafield Ltd will act both as intelligent client and delivery partner. This will enable future performance improvement by utilising the expertise and knowledge from these supply chain partners.

We have also introduced LINC (Liaise, Innovate, Network, Collaborate), an initiative that simplifies the procurement process and allows small to medium-sized enterprises to collaborate and bid directly for defined packages of work.

Changing the way we work with each other

The NDA group survey on equality, diversity and inclusion (ED&I) revealed some unsettling facts about our organization’s culture and the way we treat each other. In 2018/19 we started to tackle this, introducing an ED&I council and launching campaigns to address mental health, bullying and harassment.

We have more work to do in this area and will continue to prioritise it in 2019/20 so we can become the organisation we want to be.

Paul Foster
Chief Executive Officer, Sellafield Ltd

Case study: #ThanksTHORP

The Thermal Oxide Reprocessing Plant (THORP) at Sellafield

Since the Thermal Oxide Reprocessing Plant (THORP) began operating, it has brought in more than £9 billion to the UK from around the world by reprocessing more than 9,300 tonnes of fuel.

The plant was designed to operate for 25 years and has now reached the end of its design life. The closure of THORP will reduce our authorised discharges and eventually reduce the hazard posed by the Sellafield site. Shearing the final batch of fuel in THORP in November 2018 was not a signal for the team to turn the lights out and lock the door behind them.

Parts of the highly engineered building, such as the medium active evaporator, will continue to support other work at Sellafield.

At the same time, we will use the receipt and storage area to store used fuel from EDF Energy, helping them to keep their nuclear power stations running and the lights on across the UK.

The fuel will be stored in the receipt and storage pond, which will continue operating until around 2030. The decommissioning of THORP will take until around 2075 to finish. This will be different work, with different challenges, and different skills required.

Through a programme of retraining and reskilling, we have redeployed people to new jobs at Sellafield, meaning that there were no redundancies as a result of this significant change to our mission.

MAGNOX

Magnox Ltd is owned by the Parent Body Organisation, Cavendish Fluor Partnership (CFP) comprising Cavendish Nuclear and Fluor Corporation. On 1 September 2019 Magnox will become a wholly owned subsidiary of the NDA.

Magnox achieved its best safety performance in more than 4 and a half years during 2018/19, with its total recordable incident rate falling to 0.21 from a peak of 0.76 in 2015/16, while making significant progress in reducing nuclear hazards across its sites.

At Wylfa, we accelerated defuelling in the latter part of the year after a slow start due to reliability issues with ageing plant. The reactors are now over 80 per cent defuelled and we expect to complete the task by autumn 2019.

Magnox continues to make good progress transferring nuclear materials from Harwell to Sellafield, completing more than 100 shipments. The first shipments of Dragon nuclear materials to Sellafield also started.

A Magnox first

Bradwell became the first UK commercial nuclear power station to reach care and maintenance, a safe and passive state which lasts for around 70 years before final site clearance. This is historic for Magnox and for the wider UK nuclear industry. Learning from Bradwell will be used to inform work on other NDA sites and the AGR reactors when they reach the end of their operational life.

We’ve seen success in removing waste sludge from the ponds and draining them down at Oldbury and Dungeness, with draining due to start imminently at Sizewell. We’re confident that by the close of 2019, all Magnox ponds, apart from Chapelcross, will have been drained.

Our waste strategy continues to enable efficiencies as we consolidate intermediate level waste packages onto fewer sites. Packages have been moved from Dungeness to Bradwell and shipments are due to begin from Oldbury to Berkeley. We’ve also made progress in building stores at Hinkley, Chapelcross and Harwell, as well as new waste processing plants across the fleet.

Managing conventional hazards effectively is also a huge part of what we do, and I’m pleased to say we are making progress across all sites in asset care and asbestos management.

Supporting our communities

We take our responsibilities to our local communities seriously, with the Magnox Socio-economic Scheme supporting many vital projects that help mitigate the impact of decommissioning. A recent example is the Envision project which works with young people from schools in south west England, particularly those from disadvantaged backgrounds, in a programme to improve their employability.

A committed workforce

None of this would be possible without the commitment of our employees and we’ve been working hard to promote a culture of respect and inclusion and foster a positive environment for dealing with mental health and well-being.

The CFP contract to manage Magnox ends on 31 August 2019 and we’re committed to continuing the good work and ensuring a seamless handover so Magnox is in the best possible place going forward.

Tony Moore
Managing Director, Magnox Ltd

Case study: Teamwork wastes no time in delivering innovation

A complex technical challenge to retrieve radioactive debris from a Wylfa spent fuel store has finally been solved, thanks to the collaborative determination of the site’s workforce and two small Welsh companies.

The initial problem dated from 1991 when water from a leaking roof led to corrosion of a small number of spent fuel elements in a dry store cell, making it impossible to retrieve the fuel using conventional equipment.

Removal of the corroded elements took place a number of years ago leaving some contaminated residual debris in the 37 storage tubes that had housed the damaged elements.

Few detailed plans from the 1970s construction period remained, and an understanding of the cell’s precise internal configuration had to be developed by interpreting existing drawings and data gathered from on-site surveys by the Magnox team.

Custom-designed equipment was needed to gain access through the roof, reach down and retrieve the debris, then package it into cast-iron containers. Two local engineering businesses were appointed, specialising in toolmaking and heavy lifting equipment.

Custom-designed equipment was needed to gain access through the roof, reach down and retrieve the debris, then package it into cast-iron containers. Two local engineering businesses were appointed, specialising in toolmaking and heavy lifting equipment.

Working closely together, Anglesey-based BICO Engineering, MONA Lifting Ltd and the Magnox team manufactured the toolkit components and lifting gear to complete the retrievals. The aim was to produce a system that would work seamlessly and accurately on the very first deployment.

A 3D electronic model of the dry store was developed, as well as one built from MDF, enabling the design concepts to be fully tested. This was followed by trials in an off-site test facility allowing the bespoke equipment to be refined further before being used on site.

The proximity of both businesses to Wylfa site meant any uncertainties or issues could be resolved both speedily and effectively.

Following 6 months of full rehearsals and modifications, the equipment was successfully deployed and has now safely retrieved all the debris and the tubes.

As well as successfully delivering the original scope, the team also removed a further 10 tubes that proved to be badly contaminated.

The dry store cell will now be taken out of service and dismantled as the site progresses with its decommissioning programme.

DOUNREAY

DSRL Ltd is owned by the Parent Body Organisation, Cavendish Dounreay Partnership, comprising Cavendish Nuclear, Jacobs and AECOM.

The work to decommission Dounreay is recognised internationally as one of the most complex closure programmes being undertaken and hazard reduction continued on multiple fronts this year as we progressed towards the site’s interim end state.

A multi-year project, undertaken in conjunction with the US Department of Energy, has been completed to safely package and transport around 700kg of highly enriched uranium, representing a significant milestone in an ongoing programme to remove nuclear material from the site.

We also took big steps towards largescale skyline changes with the award of contracts to build a new waste store and demolish Dounreay Materials Test Reactor, the oldest of the site’s 3 reactors. This follows the conclusion of a 10-year campaign, taking apart supporting facilities including a cooling pond and structure housing a 27-tonne crane.

Decommissioning the site’s fuel cycle area requires a range of bespoke and first-of-a-kind techniques. Highly skilled teams continue to manually strip and dismantle redundant fuel examination cells. More than 2,000 entries were made by workers into complex controlled areas in the last year.

Progress also included making safe the first 30,000 litres of higher activity liquid waste produced during historic reprocessing of fuel from the Prototype Fast Reactor and building a 12-metre tool that was inserted into the same reactor to begin removal of residual sodium.

Delivering such a complex programme brings significant challenges and the removal of breeder fuel from the Dounreay Fast Reactor was delayed by several months this year when a crane developed a fault, a reminder of the increasing challenge of managing ageing assets. The team delivered a series of major repairs and the work to recover fuel, inside the reactor for several decades, has resumed.

Aiming for zero harm

Safety, security and environmental compliance remained at the top of our agenda. The Scottish Environment Protection Agency rated the site and adjacent waste vaults as ‘excellent’ in its most recent annual compliance assessment scores – a significant improvement from the previous year. It follows a series of reviews and infrastructure investment, with commitments made to continue upgrades in the next few years.

The workforce also achieved more than a year without a lost time accident and the lowest total recordable incident rate on record. We recognise the potential risk of complacency when performance is strong and so a programme is being rolled out to staff to raise awareness and target zero harm.

Our people at the heart of the mission We welcomed 10 graduates and 11 apprentices and administration trainees as part of our efforts to ensure we have the skills to deliver our mission.

More than 98% of staff participated in unconscious bias training and a new wellbeing pledge was signed underlining our focus on equality, diversity and inclusion.

We also doubled the number of female STEM ambassadors, with 86 men and women supporting more than 1,000 local students.

One of our female technicians was shortlisted for a national prize at the Women in Science and Engineering (WISE) awards and outgoing Managing Director Phil Craig was named Ally of the year at the Women in Nuclear UK awards.

Supporting the creation of suitable alternative employment

We continued to support the Caithness and North Sutherland Regeneration Partnership as the region looks to a future beyond the closure of the site. The NDA’s decision to invest £5 million in Scrabster Harbour, along with Sutherland’s selection as the preferred location for a vertical launch satellite site, are big steps forward this year and we continue to actively assist these, and other, priority projects in the area.

Martin Moore
Managing Director, DSRL Ltd

Case Study: Highly enriched uranium removal (HEU)

A multi-year project was completed to safely package and transport around 700kg of highly enriched uranium to the United States where it will be downblended and used as fuel in civil nuclear reactors.

The work, which involved the Dounreay workforce and more than a dozen partner organisations, marks the largest removal of material to the US in the history of the Department of Energy’s National Nuclear Security Administration (NNSA) Nuclear Material Removal Programme. The transfer plan was announced at a Nuclear Security Summit held in Washington DC in 2016 and will see the US send a different form of the material to Europe in return, where it will be used as research reactor fuel and in the production of medical isotopes.

NDA Chief Executive David Peattie said:

The successful completion of the complex work to transfer Highly Enriched Uranium (HEU) is an important milestone in the programme to decommission and clean up Dounreay site.

The project also helped to create a socio-economic legacy, with the NDA investing around £5.5 million to make improvements at Wick John O’Groats Airport. This made sure it was fit-for purpose for the project and contributes to its future sustainability.

Dounreay Site Restoration Limited Chairman Simon Bowen added:

Delivery of this strategically important project is testament to the hard work of the Dounreay team and the collaborative approach taken by them, the supply chain and the other organisations involved, who have all helped make this a success.

42% of breeder fuel removed from Dounreay Fast Reactor

98% of the workforce has undertaken unconscious bias training

LOW LEVEL WASTE REPOSITORY

LLWR Ltd is owned by the Parent Body Organisation, UK Nuclear Waste Management Ltd (UKNWM) comprising AECOM, Studsvik AB and Orano SA.

Safety has remained our highest priority during the year, and I am pleased that we have seen an improvement over the last 12 months.

Our Total Recordable Incident Rate fell from 1.4 at the start of the financial year to 0.2 at the end, realising the benefits of our safety improvement plan, developed in conjunction with our Parent Body Organisation, UK Nuclear Waste Management Ltd.

LLWR received national recognition during the year with a hat trick of awards:

• RoSPA Gold
• Considerate Constructors Gold
• Green Apple Environmental

I took up my position as Managing Director following Dennis Thompson’s decision to step down at the end of September 2018. Our aim was for a smooth transition with no adverse impact on the workforce or stakeholders, which we successfully achieved. Dennis continues to bring his experience to bear on the organisation as the non-executive Chairman of LLWR’s Board of Directors.

Since the start of our treatment and diversion services we have diverted the equivalent of over 11,500 low-level waste containers that would previously have been disposed of at the Repository. This has resulted in £95 million cost avoidance for NDA in 2018/19; a huge step towards our final 5-year contract term savings commitment of £150 million.

We finished the year 30% ahead for the transport of low level waste for treatment and diverted 96% away from the low level waste repository.

We’ve continued to make sound progress on the plutonium contaminated materials decommissioning programme. We are on track to safely and compliantly complete the decommissioning activity by Q1 of 2019 to 2020 at a cost of around £80 million, against a baseline of £100 million.

Despite a slower than scheduled start, we have now completed the preliminary design phase of the repository development programme ensuring alignment with our environmental safety case.

The programme has also discharged on time a number of planning conditions as requested by Cumbria County Council. Work will continue through the next phases of the programme to recover the schedule delay.

We are continuing our work on special waste projects. Fifteen boxes of waste from the Windscale Advanced Gas- Cooled Reactor have been consigned to the repository for disposal, freeing up space in the Sellafield intermediate level waste stores to support high hazard waste retrievals.

All permissions are now in place to receive re-categorised low level waste plutonium contaminated materials from Sellafield. This will also release valuable storage space at Sellafield and provide savings to the UK taxpayer in the region of £15 million to £20 million.

Paul Pointon
Managing Director, LLWR Ltd

Case study: Diversion versus Disposal

Image showing diversion versus disposal at LLWR

LLW Repository Ltd has come a long way in a short time. Little over a decade ago, it operated a waste disposal facility receiving low level waste at an unsustainable rate.

Today it has evolved into a waste management services company, offering a full range of options to customers to reduce, re-use, recycle and dispose of their wastes, rather than just dispose of them at the repository site.

The repository has operated safely since 1959, ensuring that low level waste generated in the UK is disposed of in a way that protects people and the environment.

But in the early years of the 21st century, containers of waste were arriving for disposal at an unsustainable rate, prompting forecasts that the facility was on course to close by the mid-2020s, leading to the requirement for a new highly engineered site at a cost of over £2 billion. A radical policy change was required, to solve the UK’s short-term capacity gap and the longer-term issues facing the industry.

LLWR Ltd was established in 2007 to hold the nuclear site licence for the repository. The following year UK Nuclear Waste Management Ltd (UKNWM), an international consortium, won the 17-year contract to manage and operate LLWR and took over as the Parent Body Organisation (PBO).

Vault 9 opened in 2010 to address shorter-term capacity issues and this was followed by the launch of a suite of waste management services, to ensure safe and effective options to waste producers to reduce and recycle their wastes. A national waste programme was introduced to direct strategy in the industry.

The environmental safety case was submitted to the Environment Agency in 2011 and a new environmental permit was issued in 2015 guaranteeing the operation of the site for decades to come. The figures speak for themselves. During 2018/19, fewer containers than ever - 93 - were sent to the repository for disposal, which is now reserved largely for waste that cannot be treated, or the residual wastes that remain after a treatment process has been completed. The expected container receipts for 2019/20 may be as low as 75.

In 2018/19, less than 5% of low level waste faced disposal at the repository. A decade earlier the figure was 95%. UKNWM is now embarking on the third and final term of its contract. And if the current diversion performance is maintained, the repository is only expected to close its gates for the final time in 2130.

The NDA: Our people

Image showing diversion versus disposal at LLWR

Our people underpin our success. Our focus is on developing a high-performing organisation that is committed to continuous improvement in all that we do.

We want the NDA to be a great place to work. During 2018/19, we have focused on activity that will support the success of our businesses and ultimately our mission by strengthening effectiveness, innovation and collaboration.

We value greatly our relationship with the trade unions. To help us deliver successful decommissioning, we have been working with them at national and local levels to develop strong strategic partnerships that will take us into the future.

To fulfil our responsibilities under the Nuclear Sector Deal, we are taking a lead role nationally through our membership of the Nuclear Skills Strategy Group (NSSG). The skills group is developing the people theme of the Nuclear Sector Deal and at the NDA we have aligned our NDA group people strategy to reflect the national targets and aspirations. We have also continued to work with government and across the NDA group on workforce reform, specifically related to pensions.

Great places to work

As part of our journey towards making all NDA businesses great places to work, where colleagues feel able to share their ideas, views and concerns and feel supported, trusted, valued and respected, we have launched our Equality, Diversity and Inclusion strategy. It encourages collaboration across the NDA group whilst celebrating individual approaches and endeavours, reflecting the businesses’ purpose and geographical locations.

We have established a progressive approach to mobility and transferability across the group, supporting career development, talent management, succession planning and progression.

In developing a workforce that is able to meet future clean up demands, we have during the past year undertaken a skills audit across the group. This has helped us to gain a clearer understanding of our skills challenges, and where the opportunities lie to work more collaboratively and innovatively across the NDA group to address these challenges.

More details on the recruitment and development of our people can be found in our Remuneration and People Report.

Cyber Security Apprentices

The next generation of cyber security professionals are benefiting from one of the UK’s first Cyber Lab classrooms, funded by the NDA.

The state-of-the-art facility, based at Energus, in Cumbria, has been specially designed to train the next generation of cyber experts.

The facility was funded through the NDA’s Cyber Security and Resilience Project and forms part of the NDA cyber programme.

The Cyber Lab is an example of the NDA demonstrating a long-term commitment on cyber security – an area where it is looking to invest £80 million over the next 5 years.

Energus and the NDA are also leading the way nationally, working with GCHQ, the national cyber security centre. The training addresses a cyber security skills gap across the nuclear industry and grows capability across the NDA group.

This work directly supports the UK Government’s Cyber Security strategy, building the pool of talent necessary to protect the UK from cyber attack and cyber crime.

Recruitment for the third cohort of cyber apprentices is currently under way. The cyber skills programme is also involved with Science, Technology, Engineering and Maths (STEM)-based training programmes for children and young people aimed at inspiring future generations of cyber trainees.

The knowledge and expertise of these home-grown students will go a long way in helping to keep the NDA, its businesses, and the wider UK, safe from the growing cyber threat.

Nurturing a workforce of the future

It is important that we continue to attract the brightest and most committed young people to be part of our clean-up mission. Over the past year we have increased the number of apprentices and graduates that we recruit across the NDA group. We now have over 750 apprentices and 200 graduates on development programmes. We are reviewing the way we recruit to attract a more diverse workforce that will meet our current and future needs.

In 2018 we celebrated 10 years of the nucleargraduates programme. Our aim is for this already excellent programme to become the leading graduate pathway for the nuclear sector.

To help encourage and support the interest in STEM subjects from young people, we have reviewed how we work with schools, and published our options paper for consultation during the summer, 2018.

We are now aligning our groupwide approach with the NSSG. We have incorporated this work into the development of our Early Careers Strategy which will be published this summer.

Securing skills for the future

Our people strategy will be a continuous focus for us, supporting our people, identifying new talent and securing the skills we require for the future, ensuring that as one NDA, we are best placed to deliver our mission.

In 2019/20 we will launch our early careers strategy, continue to work closely with government on workforce reform, develop further our relations with the trade unions and implement a comprehensive framework of policies and standards in support of all the functional areas of the people strategy.

Working with our stakeholders

Engaging openly and transparently with all of our stakeholders is crucial to building the support, confidence and trust we need to deliver our mission.

In 2018/19, the total committed NDA group expenditure was approximately,

£18.6 million,

supporting more than 200 projects across the UK.

It is important that we consider a diverse range of stakeholder views as part of our decision making process. We engage with stakeholders at the local level through our Site Stakeholder Groups and at the national level through our National Stakeholder Summit. We also run a number of issue-led engagement processes when required, particularly working closely with the local authorities around our sites to ensure alignment between our strategies and plans.

To support our vision of increased openness and transparency, we have recently published our Mission Progress Report which will provide a consistent way of reporting our progress across the NDA group. This report is available on our website: www.gov.uk/nda

Social impact

We are committed to supporting activity that helps sustain local communities affected by our decommissioning work.

Many of our 17 sites are located in remote parts of the UK, and we make significant contributions to their local economies through employment and supply chain contracts.

In line with our obligations, we take account of the impact of our decommissioning activities, spending one per cent of our overall expenditure on local projects. This funding is intended to support local communities as sites head towards closure.

Working in collaboration with local organisations, we focus on initiatives to improve education, training, employment, business support measures and economic diversification. Funds are allocated through a range of routes, including directly by the NDA, through our site licence companies, as well as Parent Body Organisations. In 2018/19, the total committed NDA group expenditure was approximately £18.6 million, supporting more than 200 projects across the UK, ranging from small-scale social schemes to multi-million pound investment in major regional infrastructure.

Case study: NDA pledged £5 million in 2019 towards upgrading Scrabster Harbour

Scrabster Harbour

The NDA agreed a grant of £5 million in 2019 towards upgrading Scrabster Harbour in the far north of Scotland, improving its capacity to welcome larger cruise ships and vessels working in the offshore oil and gas industry.

Refurbishment of St Ola’s pier to create deep-water berths is set to create up to 50 new jobs, increase commercial traffic and attract leisure visitors, providing a boost to tourism. Revenue is forecast to increase by 18% over 5 years.

Scrabster is already one of the UK’s most important ports, supporting fishing, the oil and renewables industries as well as providing a vital ferry link to Orkney.

Worth £17 million in total, the improvements are a joint investment with Scrabster Harbour Trust, Caithness and North Sutherland Regeneration Partnership (CNSRP), Highlands and Islands Enterprise (HIE) and Scottish government.

The work will involve dredging to increase the depth of the water and modifications to the pier itself, enabling larger vessels to berth. Other measures include creation of a business/industrial park near the harbour and seabed reclamation south of the main harbour to create additional laydown space or industrial land.

The NDA has already contributed more than £3 million to harbour regeneration measures since 2010, as part of an ambitious investment programme launched by the Trust in 2007. The Trust’s Board of Management is appointed from the local community members, with all operational surpluses reinvested in the port and its infrastructure.

Technology and innovation

Cleaning up the legacy from the UK’s post-war nuclear programme requires ground-breaking science, innovative thinking and novel engineering.

Back in the 1940s, the country’s scientists were pushing the boundaries of knowledge. Many of their experimental reactor designs were unique, producing radioactive wastes and spent fuel that no-one had ever dealt with before. The focus, however, was on making technologies work rather than future dismantling programmes.

Today, our challenge is to clean up this complex legacy, managing diverse kinds of waste that have been accumulating for decades, demolishing structures and returning sites back to their communities.

Our progress depends on clearly understanding the problems, finding solutions and ensuring the cost for taxpayers remains acceptable.

Our commitment to technology and innovation is crucial to our decommissioning approach, aiming to solve the challenges more effectively, more efficiently, more safely and, where possible, for less cost. We invest around £85-£100 million annually into research and development (R&D).

The majority of our R&D investment is delivered via our site licence companies and subsidiaries, who carry out the R&D work, together with their supply chains, addressing technical issues specific to their sites.

Separately, the NDA also maintains a strategic R&D portfolio of around £8 million a year to commission projects directly, in areas with potential to have an impact across a number of sites or to influence overall group strategy.

We collaborate with other public and private-sector bodies to leverage additional investment for projects that benefit decommissioning.

The aims of our NDA portfolio are to:

• help shape and underpin the NDA’s overall strategy for the UK
• deliver innovation across multiple sites
• develop vital technical expertise for the future

Case study: Cutting-edge technologies to tackle highly radioactive Sellafield facilities

NDA R&D involves more than 70 supply chain organisations in the UK and overseas.

Five collaborative projects involving cutting-edge technology are taking shape after each secured up to £1.5 million of funding from the NDA, government agency Innovate UK and BEIS.

The Integrated Innovation for Nuclear Decommissioning competition was launched in 2017, investing a total of £8.5 million to develop new ways of tackling highly radioactive facilities where workforce access is too difficult.

Sellafield’s two spent fuel reprocessing plants, which are due to end operations by 2020, require innovative systems that can access hundreds of high-hazard cells, measure radioactivity, cut up the contents (including large vessels and many miles of pipework), segregate the waste, and then remove it for treatment and safe storage .The projects are developing an integrated range of technologies that can be combined into a single seamless process for use across different facilities.

Technologies and solutions being investigated include immersive virtual reality (VR) interfaces to control activities and support planning, together with the latest robots, ranging in size from large industrial giants to small ant-like devices that can easily be replaced in the event of a break-down. The solutions include transfer of technology and systems that have been developed for other sectors such as space and automotive.

One of the autonomous navigation systems was developed for missions to Mars and will be adapted to map the interior of a radioactive cell.

The competition was launched in 2017 and has attracted interest from more than 100 organisations including small businesses, global corporations and academic institutions.

All the projects are being developed by collaborative consortia formed specifically for the competition and involving almost 30 participants.

Five promising ideas have made it through to the final stages after being whittled down from a shortlist of 15. The consortia are currently finalising prototype demonstrators for testing in a simulated radioactive environment. The next phase of the competition is to evaluate the potential for deployment in a radioactive environment at Sellafield.

All have already attracted interest from wider industry sectors both at home and overseas, and could support the global marketing of UK nuclear expertise.

Collaborating with Innovate UK and BEIS has enabled us to maximise our investment and support their goals to drive growth in the UK by supporting innovation.

NDA organisational structure

NDA corporate centre performance

NDA Corporate Centre key activities 2018 to 2019

The NDA sets the group-wide strategy, performance manages the operation of the businesses and provides assurance across the group to ensure value is delivered for the taxpayer.

The businesses are responsible for running day-to-day activities at site level, delivering progress for the NDA group, while a range of businesses operate the specialist services needed to support our work.

This section covers progress towards the NDA Corporate Centre key milestones and activities outlined in our 2018/21 Business Plan. Key milestones and activities are agreed at the start of each financial year and are grouped by strategic theme. The progress of key milestones and activities at our businesses is detailed in NDA Business performance 2018 to 2019.

Our strategic themes are:

• Spent Fuels: to ensure safe, secure and cost-effective lifecycle management of spent fuels.
• Integrated Waste Management: to ensure that wastes are managed in a manner that protects people and the environment, now and in the future, and in ways that comply with government policies and provides value for money.
• Nuclear Materials: to ensure safe, secure and cost effective lifecycle management of our nuclear materials.
• Site Decommissioning and Remediation: to decommission and remediate our sites and release them for other uses.
• Critical Enablers: to provide the stable and effective implementation framework that enables the delivery of our mission.

Status	Status description
Achieved	The key milestone or activity has been achieved during the financial year 2018/19 or satisfactory progress is being made towards achievement of longer term milestone.
Missed	The key milestone or activity was due for completion before 31 March 2019 and as at that date there had been a delay against the planned schedule and the target has been missed.
Deferred	Activity deferred due to re-prioritisation and/or reallocation of funding.

Summary of NDA Corporate Centre performance from 2018 to 2021 Business Plan

Target	Status	Comments
Nuclear Materials
Work with government to develop a long-term management solution for separated plutonium in the UK.	Achieved	-
Integrated Waste Management
The NDA will work with group businesses to explore alternative disposal options for Higher Activity Waste.	Achieved	-
Critical Enablers
Launch of the GDF siting process and community engagement.	Achieved	-
Undertake health of the supply chain review.	Deferred	Decision taken not to conduct review until emerging issues from the One NDA work can be fully understood.
Review of NDA operations and implementation of the recommendations from the Magnox Inquiry, NAO landscape report and Public Accounts Committee.	Achieved	NDA is acting on the recommendations of reports received, noting that the final report from the Magnox Inquiry is yet to be published.
Manage the existing Magnox Limited contract through to termination; and transition to new arrangements.	Achieved	-
Development of strategic opportunities that optimise delivery of the mission.	Achieved	-
Manage special nuclear materials consolidation in agreed locations.	Missed	Group Key Target to complete the consolidation of unirradiated exotic materials from Dounreay to Sellafield was declared as unachievable in Q2 due to operational delays being encountered. Completion date moved to 2019/20.
Development and implementation of a group Equality, Diversity and Inclusion (ED&I) Strategy.	Achieved	-
Implement government-led reforms of public sector pensions and exit caps across the NDA group.	Deferred	All viable 2018/19 activities around public sector pension reforms and exit caps have been carried out, however progress on HMG led pension reform is now delayed pending a parliamentary bill slot. Consultation on Public Sector Exit Caps was launched on 10 April 2019 and has been communicated to all NDA staff.
Provide support to government on nuclear new build decommissioning plans.	Achieved	-
Working to embed the capability to proactively protect, detect, respond and recover against current and evolving cyber threats.	Achieved	-
Implementation of our strategic people delivery plan to enable resource planning, skills development and flexibility and mobility across the estate.	Achieved	-
Support Small and Medium Enterprise organisations by increasing overall spend with them in line with the government growth agenda.	Achieved	-
Performance management of group businesses.	Achieved	-
Embed the key tenets of the Industrial Strategy, including facilitation under any Nuclear Sector Deal, throughout the NDA’s business.	Achieved	-
Support implementation of forthcoming new nuclear emergency preparedness standards across the NDA Group, as part of the UK’s implementation of the Basic Safety Standards Directive 2013.	Achieved	-
Regulatory Matters
Continue working with regulators and government to determine institutional controls appropriate to restoration of nuclear sites.	Achieved	-

Other key achievements for NDA Corporate Centre for 2018 to 2019

One NDA

2018/19 saw us create One NDA, setting a clear direction for how we will work together with our businesses as one group in the future and maximise the opportunities that come from working together more effectively.

The creation of One NDA has driven significant and meaningful engagement with our businesses and stakeholders, providing us with a stronger platform for working together for the good of our mission and people.

Our vision

To support the One NDA direction of travel, we also developed a unifying vision, reflecting the changes the NDA group is making and the opportunities that One NDA provides.

Public scrutiny

As a public body we must expect and respect the scrutiny placed upon us and last year saw the NDA being the subject of one NAO Report and one Public Accounts Committee. A great deal of effort and resource rightly supported these reviews from across the group, ensuring maximum openness and transparency.

Stakeholder relations

A major success in stakeholder relations was the Stakeholder Summit held over two days in July in the former Berkeley Engineering Labs which have been converted into a Further Education college. The event brought together around 250 delegates from across the UK and Europe to hear from our Chairman and Chief Executive Officer, together with guest speakers including the BEIS Permanent Secretary, Alex Chisholm.

In May we held a very successful event at the Scottish Parliament co-hosted by the MSPs representing our Scottish sites. The Cabinet Secretary for Environment, Roseanna Cunningham attended along with several MSPs, advisors and officials. Also attending were representatives from the site stakeholder groups at Dounreay, Hunterston and Chapelcross together with our supply chain in Scotland.

BREXIT preparations

We have completed the NDA group ‘No Deal’ actions to ensure that we are prepared for a ‘No Deal’ scenario. While the future relationship with EU and Euratom remains uncertain, we have provided BEIS with the support it has requested.

ACCOUNTABILITY REPORT

Directors’ report

The NDA is an Executive Non-Departmental Public Body (NDPB), established by the Energy Act (2004) to oversee and monitor the decommissioning and clean-up of the UK’s civil nuclear legacy. Since then, the NDA’s remit has been extended to include the long-term management of all the UK’s radioactive waste by finding appropriate storage and disposal solutions.

Accounts direction

These accounts have been prepared in a form directed by the Secretary of State with the approval of HM Treasury and in accordance with section 26 of the Energy Act (2004).

Directors’ interests

Directors of the NDA must declare any personal, private or commercial interests. A register of such interests is maintained by the NDA.

Rob Holden declared a commercial interest. He is a Non-Executive Director of NNB Generation Company (SZC) Ltd., Director of Electricity North West Ltd and Director of North West Electricity Networks Ltd. and will therefore, be excluded from any involvement with Moorside deliberations.

All other directors have no personal, private or commercial interests which would conflict with their role as a director of the NDA. A full register of Directors’ interests is available at nda.gov.uk.

Directors comprise senior management and Non-Executive Board Members whose details are set out in the Governance Statement.

Auditor of the NDA

The NDA is audited by the Comptroller and Auditor General (C&AG) in accordance with the Energy Act (2004). The services provided by the C&AG relate to statutory audit work for the NDA. No fees were paid to the C&AG for services other than statutory audit work.

Pensions

All NDA employees are eligible to participate in the Civil Service Pension Arrangements. Employees within the Group participate in various defined benefit pension schemes detailed in note 26 to the accounts.

Group employees also participate in various schemes which are accounted for on a defined contribution basis, with details given in note 26 to the accounts.

Better payment practice

The NDA supports the Better Payment Practice Code in its treatment of suppliers with the aim of paying undisputed invoices as soon as possible. The key principles are to settle the terms of payment with suppliers when agreeing the transaction, to settle disputes on invoices without delay and to ensure that suppliers are made aware of the terms of payment and to abide by those terms.

During the year, the NDA group has achieved an average of 20.97% success rate for payment of valid invoices (i.e. one with all details correct and entered on the accounting system) within 5 days and 90.07% within 30 days. The total value of interest incurred in 2018/19 as a resultof late payment of invoices is Nil across the group.

Personal data

There were no data breaches or loss of personal data for 2018/19.

Other disclosures

Some disclosures required in the Director’s Report have been included elsewhere in the Annual Report. Disclosures on equal opportunities, learning and development and how the NDA engages with all staff are in the Remuneration and People Report. Details of investment in socio-economic developments, research and development and funding, counterparty and foreign exchange risk are all included in the financial statements. The NDA’s environmental performance is detailed in the HSSSE report.

No events affecting these accounts have occurred since the reporting date. A full explanation of the adoption of a going concern basis appears in note 2.1 of the financial statements.

Statement of Accounting Officer’s responsibilities

Under Section 26 of the Energy Act 2004, the Secretary of State (with the approval of HM Treasury) has directed the NDA to prepare for each financial year a statement of accounts in the form and on the basis set out in the Accounts Direction. The accounts are prepared on an accruals basis and must give a true and fair view of the state of affairs of the NDA and of its income and expenditure, Statement of Financial Position and cash flows for the financial year.

In preparing the accounts, the Accounting Officer is required to comply with the requirements of the Government Financial Reporting Manual and in particular to:

• observe the Accounts Direction issued by the Secretary of State (with the approval of HM Treasury), including the relevant accounting and disclosure requirements, and apply suitable accounting policies on a consistent basis
• make judgements and estimates on a reasonable basis
• state whether applicable accounting standards as set out in the Government Financial Reporting Manual have been followed, and disclose and explain any material departures in the accounts
• prepare the accounts on a going concern basis
• confirm that the Annual Report and Accounts as a whole is fair, balanced and understandable and take personal responsibility for the Annual Report and Accounts and the judgements required for determining that it is fair, balanced and understandable

The Accounting Officer for the Department for Business, Energy and Industrial Strategy (BEIS) has appointed the Chief Executive Officer as Accounting Officer of the NDA.

The responsibilities of an Accounting Officer, including responsibility for the propriety and regularity of the public finances for which the Accounting Officer is answerable, for keeping proper records and for safeguarding the NDA’s assets, are set out in Managing Public Money published by HM Treasury.

As the Accounting Officer, I have taken all the steps that I ought to have taken to make myself aware of any relevant audit information and to establish that NDA’s auditors are aware of that information. So far as I am aware, there is no relevant audit information of which the auditors are unaware.

David Peattie
Accounting Officer and Chief Executive Officer
18 June 2019

Governance statement

NDA is sponsored by the Department for Business, Energy and Industrial Strategy (BEIS). UK Government Investments (UKGI) provides strategic oversight of NDA’s corporate governance and corporate performance, working closely with and reporting directly to BEIS senior officials and providing advice to BEIS Ministers. The formal agreement between NDA and BEIS is set out in a Framework Document, supported by a Memorandum of Understanding between BEIS and UKGI. The Scottish government also has a governance role, working closely with BEIS to ensure its expectations are met.

This governance statement provides a summary of the NDA Board and the Executive structure and the governance over key activities undertaken during 2018/19. It explains the frameworks used to measure the effectiveness of delivery, the findings of audit and assurance reviews and associated improvement actions. We are governed by the Energy Act (2004), the government’s Framework Document and Cabinet Office guidelines for Non-Departmental Public Bodies (NDPBs). Our structure is summarised below and further explained in this statement.

NDA Board and Sub-Committees

Chairman: Accountable for delivering obligations under Energy Act 2004 and providing effective leadership and direction of the Board

Meeting	Purpose of meeting	Meeting Chair
NDA Board	To set strategic framework and direction. Ensure corporate governance is observed. Responsible for key decisions. To understand key risks and set risk appetite. Monitor and challenge the Group performance.	Board Chair
Safety and Security Committee (S&SC)	To support Board on discharging responsibility across the NDA estate relating to Health, Safety, Environment, Nuclear Safeguards and Security matters.	Non-Executive Board Member
Audit and Risk Assurance Committee (A&RAC)	To advise the Board on risk, control and governance. To oversee audit and financial reporting. Advise and report on the plans, activities and performance of internal and external audit. Assessment of assurance reliability and integrity.	Non-Executive Board Member
Remuneration Committee (REMCO)	To advise the Board on remuneration, and monitor performance of Executive Directors.	Non-Executive Board Member
Programmes and Projects Committee (P&PC)	To advise the Board on sanction, performance and assurance of programmes and projects.	Non-Executive Board Member
Nominations Committee	To consider the composition and skills of the Board, advise on the structure and size of the committees, and assess succession planning and talent management.	Board Chair

Executive Committee and Sub-Committee

Accounting Officer (AO) and CEO: Responsible for leadership and operational management of NDA. Accountable to Parliament for NDA activities, public funds employed and ensuring targets are met.

Meeting	Purpose of meeting	Meeting Chair
Executive Committee	Accountable for implementing strategy and plans approved by the Board. Includes sanction and decision making.	Chief Executive Officer
Risk and Assurance Committee	To understand Group risk profile. To monitor and manage risk and assurance mechanisms. To ensure effective management of key risks. To monitor findings from audit and assurance reviews. To advise Board Audit and Risk Assurance Committee.	Group Director of Risk and Assurance
Finance and Performance Committee	To review and approve annual reports and accounts. To review sanction plan and approve sanction requests within delegation and endorse onward submission where required. To review overhead and headcount budget and review group performance in preparation for Quarterly Performance Reviews.	Group Chief Financial Officer
Sanction Committee	To review and sanction work activities across the NDA estate, including: programmes; projects; procurements; IT expenditure; contracts; asset disposal and investment opportunities. Further approval by the NDA Board and government may also be required.	Chief Executive Officer
Strategy Committee	To approve business and ‘technical’ strategies. To review the portfolio of strategic decisions/initiatives under development and endorse for forward submission to the Sanction Committee.	Group Director of Nuclear Strategy and Technology

As at 31 March 2019, we had eight members of the NDA Board - two Executive plus six Non-Executive Board Members (NEDs) including the Non-Executive Chair. Board membership and current terms, committees and attendance for those who have served during 2018/19 are summarised below. A Nominations Committee was set up and held its first meeting in November 2018.

NDA Board - Number of meetings held and attended

Name	Role		Term of office ends	Board (12)	A&RAC (7)	REMCO (5)	S&SC (5)	P&PC (6)	Nominations Committee (1)
Tom Smith	Chairman	N/A	28 Feb 2020	12/12*	1/7**	5/5**	1/5**	6/6*	1/1*
Janet Ashdown	Senior Non-Executive Board Member	Chair of S&SC	(i)	12/12*	7/7*	0	5/5*	0	1/1*
Volker Beckers	Non-Executive Board Member	Chair of A&RAC	(i)	12/12*	7/7*	2/5(iii)*	0	0	1/1*
Evelyn Dickey	Non-Executive Board Member	Chair of REMCO	(i)	12/12*	0	5/5*	5/5*	0	1/1*
Rob Holden	Non-Executive Board Member	Chair of P&PC	(i)	11/12*	0	5/5*	0	6/6*	1/1*
Candida Morley	Non-Executive Board Member	N/A	3 Jun 2019 (vi)	12/12*	5/7(ii)*	4/5**	0	0	1/1*
David Peattie	CEO and AO	N/A	N/A	12/12*	7/7**	5/5**	5/5(iv)*	6/6(iv)*	0
David Batters	Group Chief Financial Officer	N/A	N/A	12/12	7/7**	0	4/5**	3/6**	0
Adrian Simper	Group Director of Nuclear Strategy and Technology	N/A	28 Nov 2018 (v)	9/9*	0	0	0	0	0

*member

**in attendance

Notes:

(i) These appointments are made by the Secretary of State. The initial terms of all four were due to end in the course of 2018. Given the uncertainty, around the timing of completion of the Inquiry and publication of the final report, it was decided to extend the terms of all four to be no later than six months after the publication of the final report or six months after the date on which it was clear that the Inquiry would not submit a final report.

(ii) Candida Morley became a member of A&RAC in January 2019 (but attended previously)

(iii) Volker Beckers became a member of REMCO in November 2018

(iv) David Peattie became a member of S&SC and P&PC in September 2018 (but attended previously)

(v) Adrian Simper resigned as an Executive Board member from 28 November 2018

(vi) Candida Morley stepped down as a Non-Executive Board Director on 3 June 2019

(vii) There were also three joint sessions of the S&SC and A&RAC held to cover off specific risks

(viii) David Long joined the NDA Board as a Non-Executive Board Director on 11 June 2019.

Current Non-Executive Board Directors (NEDs) including Non-Executive Chair

Tom Smith, Chairman

Tom began his career in the Diplomatic Service, working in London, Hong Kong and Beijing between 1979 and 1990, when he was part of the team that negotiated the 1984 treaty with China on Hong Kong.

In 1990, he joined Trafalgar House plc and held several senior positions before becoming Managing Director of Midland Expressway Ltd (MEL) in 1997, where he led the development and construction of the M6 Toll, the UK’s first privately financed toll motorway. He subsequently joined the Go-Ahead Group plc as Managing Director Rail Development and, over 10 years, was instrumental in turning Go-Ahead into one of the country’s largest passenger rail operators. He was Chairman of the Association of Train Operating Companies from 2009 to 2013. He was a Non-Executive Board Member of Highways England from 2014 to 2016.

Janet Ashdown, Senior Non-Executive Board Member

Janet worked for BP plc for over 30 years, holding a number of local and global positions in fuel supply, manufacturing, oil trading and retail marketing. She was a senior leader in BP, running BP’s UK retail and commercial fuel business in her last role. Janet was, until the end of 2012, Chief Executive Officer of Harvest Energy Ltd.

Volker Beckers, Non-Executive Board Member

Volker was Group Chief Executive Officer of RWE Npower plc. He has worked in a variety of trade and industry bodies, including the CBI President’s Committee, on the Board of the German-British Chamber of Industry and Commerce. He was also member of the Executive Committee of UKBCSE (now Energy UK).

He also chairs the UK PWC Advisory Council and is a Board Member and Vice Chairman of Danske Commoditities A/S.

He is a member of King’s College Advisory Board and Honorary VP and member of the Energy and Utility Forum.

He holds Non-Executive Director and Chairman roles on various Boards.

Evelyn Dickey, Non-Executive Board Member

Evelyn has extensive human resources experience, leading design and delivery of major change programmes, business restructuring, employee relations, resourcing, executive remuneration, organisational capability and performance management initiatives.

Evelyn has worked in HR consultancy and as HR Director (HR Operations) for Boots the Chemist, before joining Severn Trent’s HR function in November 2006, retiring as Director of HR in 2017.

Rob Holden CBE, Non-Executive Board Member

Rob led the London and Continental Railways (LCR) team in a series of transactions that secured the future of the Channel Tunnel Rail Link (later renamed High Speed 1). In 2009 he was awarded a CBE for services to the rail industry.

Rob is a Chartered Accountant with a career background of managing long-term projects including the Trafalgar and Vanguard classes of nuclear powered submarines and Crossrail. He now combines his non-executive with advisory assignments on transport and defence projects both in the UK and overseas.

Candida Morley, Non-Executive Board Member (until 3 June 2019)

Candida joined UKGI as a Director in September 2017 from HgCapital where she was an Operating Partner. Between 2001 and 2015 she worked at private equity fund LDC where her roles included Chief Portfolio Officer and Chief Operating Officer, prior to which she worked at Elementis plc, 3i plc and as Director of Development at the Victoria and Albert Museum.

Candida stepped down as a Non-Executive Board Director on 3 June 2019.

Board performance

Corporate governance Compliance

The NDA supports high standards of governance and, where appropriate, given the size, status and complexity of the organisation, has continued to develop our governance taking account of the principles set out in the Government Code of Corporate Governance, government guidance for an arm’s length body and the Financial Reporting Council’s 2018 UK Corporate Governance Code:

• the Board monitors the NDA’s performance and directs its business effectively, including taking an active role in stakeholder relations
• the Chair is responsible for leading the Board and Non-Executive Board Members to challenge and help develop strategy
• the Board receives frequent updates on NDA’s financial position, forecasts and sensitivities
• the Board has an appropriate balance of skills and experience to discharge its responsibilities
• the Board ensures that a balanced assessment of performance is reported to BEIS and regularly debates the main (corporate strategic) risks facing NDA
• the Audit and Risk Assurance committee has oversight of, and provides challenge to, the management and internal control systems
• the Board places particular emphasis on the quality and integrity of the data submitted for its use. Critical processes and outputs fall within the control of the NDA Assurance Framework and are subject to peer review and/or independent review by Internal Audit
• the Board reviews the terms of reference for its sub-committees annually
• the Board has set up a Nominations Committee
• the Board is seeking greater engagement with the workforce
• the Board’s Remuneration committee determines executive director remuneration and contractual arrangements, having regard to the need for defensibility in public sector pay under advice and guidance fromHM Treasury and BEIS. Non-Executive remuneration is set by BEIS and reviewed regularly.

We also use the Financial Reporting Council’s 2018 UK Corporate Governance Code, for Listed Companies, as a reference point, and aim to follow that Code’s provisions where they are relevant to us. One of the key focus areas has been to seek greater Board engagement with the workforce and this will be further developed in 2019/20.

Board performance and effectiveness review

The Board undertakes an annual evaluation of its effectiveness, led by the senior Non-Executive Board Member.

During the 2018 review, the Board was also supported by an external facilitator who has experience in reviewing a wide range of company boards.

Throughout 2018/19, progress was maintained on the findings from the 2018 review including actions to address:

• Board agenda, papers, discussions and operating rhythm
• Board size, composition, succession planning and Committee structure
• Board role, expectations and relationship with government

A collective assessment by the Board in April 2019 agreed the 2018/19 findings have been acted upon and good progress made in all key areas. Particular improvements were noted in the control of meeting papers, including the new key holder and enhanced assurance processes, the introduction of a Nominations Committee and an additional focus on strategic topics.

In March 2019, the Board undertook its annual effectiveness review. Progress of individual actions will be reviewed at Board meetings over the course of the current year and will be reported on next year. An action plan has been drafted and key areas for attention include the post-evaluation reviews of programmes and projects, clarity of risk appetite and improvements in Board induction and development. It was agreed to apply the Board effectiveness methodology to the Committees of the Board starting in the period 2018/19.

Board performance

The NDA Board is supported by its committees as outlined below.

Audit and Risk Assurance Committee (A&RAC)

The Audit and Risk Assurance Committee consists of 3 full members:

• Volker Beckers (Chair)
• Janet Ashdown
• Candida Morley

The following persons may also attend the committee meetings:

• Julian Kelly – Standing Advisor (from Mar 2018)
• Chief Executive / Accounting Officer
• Group Chief Financial Officer
• Group Director of Risk and Assurance
• Group Security and Corporate Services Director
• Head of Group Internal Audit
• Chief Compliance Officer
• Head of Financial Operations (from Jan 2019)
• External Audit Representation (NAO)
• Representative from Government Internal Audit Agency (GIAA)
• Chair of BEIS A&RAC
• NDA Chairman

Number of meetings in the year: 7

The Audit and Risk Assurance Committee ensures continuous monitoring of the effectiveness of the financial and risk assurance control frameworks established by the NDA Executives.

The Audit and Risk Assurance Committee advises the NDA Board on:

• the strategic processes for risk management, information risk management, control and governance within the core NDA, and across the wider NDA group
• assurances relating to the management of risk and corporate governance requirements for the NDA as an organisation
• anti-fraud policies, whistle-blowing processes, and arrangements for special investigations
• proposals for tendering for either Internal or external audit services or for purchase of non-audit services from contractors who provide audit services
• the accounting policies, the Annual Report and Accounts, matters arising from the external audit, and management’s Letter of Representation to the external auditors
• the plans, activities and performance of internal and external audit
• the adequacy of management response to issues identified by audit activity, including the external auditor’s Management Letter

During the year, the Audit and Risk Assurance Committee has:

• focused on cyber security, the impact of Brexit and the new approach to risk management following the external review of the NDA’s Risk Management Framework
• supported preparations for the upcoming spending review and changes to the Corporate Centre in respect of various functions, including alignment of the Group Internal Audit functions
• ensured the NDA met all financial reporting obligations
• ensured that NDA accounting practices are in line with BEIS and HM Treasury guidance
• provided oversight of the control framework for information risk management and associated improvement plans
• provided oversight on the further development of the NDA’s Risk and Assurance Framework
• supported the development of a new Target Operating Model for Internal Audit

Remuneration Committee (REMCO)

The Remuneration Committee consists of 3 full members:

• Evelyn Dickey (Chair)
• Rob Holden
• Volker Beckers (from Nov 2018)

The following persons may also attend the committee meetings:

• Chief Executive / Accounting Officer except for discussion in relation to their own remuneration.
• Group Human Resources Director except for discussion in relation to their own remuneration.
• NDA Chairman
• NDA Non-Executive Board Members

Number of meetings in the year: 5

More details on the activities of the Remuneration Committee can be found in the Remuneration and people report.

Safety and Security Committee (S&SC)

The Safety and Security Committee consists of 4 full members:

• Janet Ashdown (Chair)
• Evelyn Dickey
• David Peattie (Sep 2018)
• Alan Cumming (Sep 2018)

The following persons may also attend the committee meetings:

• Per Lindell – Standing Advisor (from Mar 2018)
• NDA Chairman
• Group Director of Risk and Assurance
• Head of Health, Safety and Environment
• Group Security and Corporate Services Director
• Regulators (attend once per year)
• Group Chief Financial Officer
• Site Licence Company representative (specific items)
• Chairs of the SLC S&SCs

Number of meetings in the year: 5

The Safety and Security Committee supports the NDA Board in discharging its responsibilities in respect of issues of Health, Safety (including both nuclear and occupational safety), Environment, Nuclear Safeguards and Security in the NDA Group.

The primary responsibility for the majority of these issues within the NDA group lies with the businesses and duty-holders. In particular the site licence companies have unambiguous responsibility for safety on their sites. However, the NDA has a duty of care over the operation of its whole group and in particular must ensure that the businesses discharge their responsibilities properly.

The Safety and Security Committee advises the NDA Board on:

• general issues of Health, Safety, Environment, Nuclear Safeguards and Security in the NDA Group (current and projected)
• Specific matters of interest or concern, including the scrutiny of summary information supplied to the NDA Board
• the appropriate Board response to specific Health, Safety, Environment, Nuclear Safeguards and Security risks and issues
• An external perspective on relevant good practices and industry trends, including recommendations as to when and where the Board should seek advice

During the year the Safety and Security Committee has:

• visited the NDA site at Dounreay to review performance and discuss safety with site staff
• engaged with our environmental regulators, SEPA and EA, by inviting senior regulators into committee to discuss current issues, and benchmark the NDA performance against the nuclear sector
• encouraged the NDA’s development of environmental performance indicators, and sustainability policy
• received and advised on the results of the HSL Safety Climate Survey The survey reported at the start of 2018, and formed the basis of our highly successful NDA Health and Safety Day, in October 2018

The committee’s routine business this year has been to scrutinise the management of HSSSE risks and performance across the NDA group. Performance is benchmarked against relevant industry sectors, including high hazard, manufacturing, and energy, oil and gas.

From time to time, and as considered necessary, the committee will receive reports from group businesses on events and accidents. This year, the committee received detailed reports from Sellafield Ltd, Dounreay Site Restoration Ltd, and LLWR Ltd on their improvement programmes.

The committee also receives and commissions independent reports from the NDA’s in-house HSE and Security and Resilience teams, including trend analysis and reports of work undertaken by the NDA to promote high standards and encourage collaboration.

Programmes and Projects Committee (P&PC)

The Programmes and Projects Committee consists of 4 full members:

• Rob Holden (Chair)
• Tom Smith
• David Peattie (Sep 2018)
• Alan Cumming (Sep 2018)

The following persons may also attend committee meetings:

• Group Chief Financial Officer
• Group Director of Risk and Assurance
• Head of Sanction

Number of meetings in the year: 6

The Programmes and Projects Committee provides additional oversight and scrutiny of Major Programmes and Projects within the NDA Group. This includes, but is not limited to, programmes and projects relating to engineering, procurement and construction, information, technology, telecommunications, security and real estate development.

The Committee supplements Board oversight; it is not intended to supplant it.

The Programmes and Projects Committee advises the NDA Board on:

• progress of Major Programme and Projects against approved business cases and funding
• assurance that emerging issues concerning Major Programmes and Projects are understood and that mitigations are being appropriately pursued
• outcomes of assurance reviews (internal or external) and progress against action plans to address any issues raised in these reviews
• the forward plan of programmes and projects/business cases coming to the Board for approval

During the year, the Programmes and Projects Committee has:

• provided oversight to and advised the Board on a number of major Programme and Projects business cases including Programme and Project Partner procurement, Sellafield Model Change Programme, First Generation Magnox Storage Pond (FGMSP) Sludge Handling and Export Plan, Box Encapsulation Plant Product Store Direct Import Facility (BEPPS DIF) and Magnox Operating Model
• provided oversight of the enhanced assurance arrangements
• provided oversight of completed assurance in support of impending board decisions and forward assurance in support of later board decisions

Nominations Committee

The Nominations Committee consists of 6 full members:

• Tom Smith (Chair)

• Non-Executive Board Members The following persons may also attend committee meetings:

• Chief Executive/Accounting Officer
• Group Human Resources Director

Number of meetings in the year: 1

The Nominations Committee advises the NDA Board on the composition and skills of the Board.

During the year, the Nominations Committee has:

• reviewed the skills matrix of the Board
• looked at the timings of Non-Executive Board Member terms of office and the appointment of a further NED.
• reviewed succession plans in the Corporate Centre and Group
• reflected on the diversity of the Board and the Corporate Centre.

Executive leadership team

David Peattie: Chief Executive Officer - Executive Board Director

David began his career at BP in 1979 as a petroleum engineer and, during 33 years at the company, held a number of technical, commercial and senior management positions.

His roles included Head of BP Group Investor Relations, Commercial Director of BP Chemicals, Deputy Head of Global Exploration and Production, Head of BP Group Planning, and finally as Head of BP Russia where he was responsible for BP’s interests in the TNK-BP joint venture as well as its businesses in the Russian Arctic and Sakhalin. In addition, he was BP’s lead Director on the board of TNK-BP and Chairman of its Health, Safety and Environment Committee

David Batters: Group Chief Financial Officer - Executive Board Director

Prior to joining the NDA, David spent more than 20 years with BAE Systems and predecessor companies in which he held a variety of roles, primarily in finance including mergers and acquisitions, planning and analysis, reporting, project accounting and as Finance Director of a number of businesses.

As CFO, David is responsible for the NDA’s finance function (Finance, modelling and analysis, insurance, pensions, business planning, property and internal compliance and audit).

Dr Adrian Simper OBE: Group Director of Nuclear Strategy and Technology - Non-Board Director (Executive Board Director until November 2018)

Adrian joined the nuclear industry in R&D at Sellafield. His subsequent career has included strategic roles in R&D and technology, project delivery, commercial and finance both in the UK and the US.

Adrian is the NDA group mental health champion. He was appointed to the Order of the British Empire (OBE) in the 2017 New Year Honours’ list, recognising his services to the UK nuclear industry in Japan.

Alan Cumming: Group Director of Nuclear Operations - Non-Board Director

Alan joined the NDA as Group Director of Nuclear Operations in April 2018. He has responsibility for all operations, including health and safety.

A Chartered Civil Engineer and a Chartered Structural Engineer, Alan completed his nuclear training at Massachusetts Institute of Technology in Boston and has an MBA from Strathclyde Business School in Glasgow.

Before joining the NDA, Alan was Capital Projects and Engineering Director for Viridor, part of Pennon, Deputy Project Director for EDF Energy’s New Build Nuclear Programme and Director of Projects for British Energy.

David Vineall: Group Human Resources Director - Non-Board Director

David has a wealth of experience within the industrial sector having held a series of senior HR leadership roles in TATA Steel in Europe, BAE Systems and GEC Alsthom. Roles have included HR Director for the TATA Steelmaking operations in South Wales and HR Director for shipbuilding and support business across Glasgow and Portsmouth within BAE systems.

David plays a leading role in skills as a board member for the ECITB (Engineering Construction Industry Training Board), deputy chair for the Nuclear National Skills Strategy Group and Vice Chair for the National College for Nuclear.

Duncan Thompson: Director of Group Development - Non-Board Director

Duncan has a mechanical and environmental engineering background, with management experience gained over 27 years in the UK and overseas. He has worked for The London Stock Exchange, Ford, British Overseas Aid and Unicef and, as a management consultant, he worked with companies including National Grid Transco, Railtrack, NDA and BP.

From 2014 he led the work to bring Sellafield in as a subsidiary of the NDA and then, as Sellafield Programme Director, embedded and ran those subsidiary arrangements. In April 2019 Duncan took on the new role of NDA Group Development Director, responsible for development and implementation of a group structure that best delivers our mission.

Jeremy Harrison: Group Director of Risk and Assurance - Non-Board Director

Jeremy joined the NDA in October 2018, following four years at HS2 Ltd.

Jeremy worked in the rail industry for 22 years. He pioneered early thinking on safety risk and then went on to lead on project and corporate risk. This included setting the standards and policies for risk management and value management, across the infrastructure projects on the national rail network.

Jeremy chaired the UK Risk Management committee for BSI and supported government initiatives to improve risk management across major projects.

Kate Ellis: Group Commercial Director - Non-Board Director

Kate brings a wealth of valuable commercial knowledge and experience to the NDA. Kate joined the NDA in November 2017 from the Ministry of Justice, where she was Commercial Director for Her Majesty’s Prison and Probation Service.

Previously, Kate was with BP for 22 years. She held several senior roles with the organisation, including Commercial Director of BP Shipping.

Paul Vallance: Group Communications and Stakeholder Relations Director - Non-Board Director

Paul began his career at BNFL, becoming Group Communications Director. He joined NDA from

Rolls-Royce, where he held a number of senior positions. Paul was part of the executive team that established Rolls-Royce’s nuclear sector, which included both the civil nuclear and submarines businesses. Paul was also the customer lead for a number of Rolls-Royce’s key commercial relationships.

Frank Rainford: Group Security and Corporate Services Director - Non-Board Director

Frank joined the NDA in February 2017 and is currently responsible for security, cyber, information governance, ICT, CEO Office, the Project Management office and the provision of other Corporate Centre services.

Prior to joining the NDA, Frank spent three years as the Executive responsible for the GE Aviation Aerostructures business in the UK and previously spent 21 years with BAE Systems and predecessor companies in the UK and Saudi Arabia, holding several senior roles including Transformation and Project Management Director. Frank studied at Lancaster University gaining an MBA and MSc in Project Management.

Neil Hewlett: General Counsel and Company Secretary - Non-Board Director

Neil joined the NDA in September 2017. He is a qualified solicitor and experienced corporate and commercial in-house lawyer having worked in either global or pan- European legal roles for a number of multi-nationals based in the UK, the Netherlands and Belgium in the diversified industrial, logistics and chemical sectors.

Executive Committee (ExCo)

The membership of the ExCo is shown in the Executive leadership team section.

The committee is accountable for implementing strategy and plans approved by the Board. The ExCo meeting agenda has been aligned to match the committees of the Board. Each month, the ExCo meets and over a two-day period, covers the agenda as follows: Risk and Assurance Committee, Finance and Performance Committee and Sanction Committee. Other areas covered by the ExCo include health, safety and environment, planning, contracting, people management and recruitment and internal and external communications.

Financial control

NDA has strong financial controls to ensure it remained within its budgetary spend for 2018/19 of £3.3 billion. It has well-defined delegated authority and a clear budgetary framework. The system remains effective with no significant issues identified by internal or external audit during the year.

Control of programmes and projects across the group is exercised by the executive through the ExCo Sanctions and Programmes and Projects Committee.

Risk management

Managing risk is a fundamental NDA responsibility. By following international good practice in risk management, the NDA aims to:

• improve business performance and efficiency
• safeguard the NDA’s staff, contractors, assets, environment and reputation
• promote good governance by integrating risk management, internal control and assurance
• foster a risk-aware culture that ensures decision-making reflects NDA’s appetite for risk
• provide assurance to stakeholders that risks are being actively managed. While the Board is ultimately accountable for NDA risks, all staff have a duty to identify, manage and report risks in their areas of responsibility.

A large number of our risks are owned and managed by our businesses. At a Group level, we recognise accountability for oversight of management of key risks, and the potential for risks to have knock-on consequences across the Group.

A review of the risk management framework carried out by a secondee from the British Business Bank highlighted areas of weakness. These findings, combined with the experience of the incoming Group Director of Risk and Assurance, have led to the development of a significant risk management improvement plan. The plan includes development of a structured and integrated risk appetite approach, collaborative work to develop a common risk management framework across the NDA group, improvements to forecasting and contingency management and a systemic and holistic consideration of risk.

Risk Hierarchy

The principal risks at a group level are currently known as corporate strategic risks (CSRs). Each of these is supported by a fully documented risk assessment and has an executive-level sponsor. Reviews of these during the year have been informed by analysis of the interactions between the risks and mapping of risks from the group businesses. At the end of 2017/18 there were 17 active CSRs. During 2018/19 one CSR was closed (Sellafield benefits) and two downgraded (Bribery and Corruption and Lifecycle Governance). At the end of 2018/19 there are 14 CSRs.

Following the successful completion of the Sellafield Model Change Programme, acknowledged by the Major Projects Governance Group in October, the specific risk “failure to deliver the benefits of the Sellafield subsidiary” has been closed. There will be ongoing focus on the maintenance of an effective delivery environment across the group.

Due to increased confidence in the control environment, two further risks will continue to be monitored and managed at the functional level only:

• failure of control environment leads to fraud, bribery and corruption
• good in-year progress in aligning the requirements of our fraud focus group with Cabinet Office GovS 013: Counter Fraud guidance.
• ineffective NDA lifecycle governance of subsidiaries and affiliates (excluding Sellafield
• increased clarity of how to effectively implement and use subsidiary model. Related internal audit actions completed and learning from Sellafield Model Change Programme.

Workshops with the Executive and the Board were used to review all risks, with eight of these (shown in the table below) subject to deep dive reviews by the Board committees during 2018/19.

Significant oversight of key controls across the group has focused on cyber security and information governance, Brexit preparedness and business continuity.

NDA businesses present their top risks and explain their management of them through the Quarterly Performance Review (QPR) process. In addition, NDA Corporate Centre risk team is engaging in additional challenge and assurance in relation to risks across the businesses. These may be subject to Board committee deep dive, an example being a particular safety risk from our Sellafield business.

Horizon scanning and emerging risk

Our overarching risk management framework provides for the recognition and escalation of emerging risks. Our collaborative work across the NDA’s group businesses, with the Heads of Risk, has developed significantly this year. This has included collective identification of joint risks and sharing on emerging / evolving risks. This will continue as the group-wide risk management framework matures.

Corporate strategic risks

Risk	Key NDA Risk Controls	Risk Owner Function
Significant scope change	critical stakeholder engagement framework input to Spending Review and commercial processes	STRATEGY AND TECHNOLOGY
Technical solutions fail to achieve desired outcomes	research and development strategy technical Baseline and underpinning research and development process NDA requirements defined within client specifications	STRATEGY AND TECHNOLOGY
NDA has insufficient funding to fulfil its mission for the next 5 years*	NDA contract model including Lifetime Plans and Annual Site Funding Limit business planning process and portfolio management	FINANCE
NDA assets do not perform as required adversely impacting on NDA mission	NDA requirements defined within client specifications NDA Asset Management Assurance Plan asset management incentivisation business continuity capability	NUCLEAR OPERATIONS
Poor management of the supply chain results in inadequate performance and reduced value for money	supply chain and procurement strategy supply chain monitoring	COMMERCIAL
Insufficient capability and capacity to deliver the NDA mission	HR Management Information resource Planning	HUMAN RESOURCES
Failure of site licence company-related contracts, programmes and projects to deliver strategic outcomes	benefit realisation plans NDA contract mechanisms	NUCLEAR OPERATIONS
Major safety or security incident disrupting the NDA’s mission*	executive and board-level leadership resilience programme – emergency plans, business continuity capability	NUCLEAR OPERATIONS/ SECURITY AND CORPORATE SERVICES
Failure to deliver the benefits of the Sellafield subsidiary*	This specific risk is to be closed as it was focused on the Sellafield Model Change which has been implemented. Future Executive focus will be on successful alignment of the operating model and behaviours.	NUCLEAR OPERATIONS
Failure of control environment leads to fraud, bribery and corruption*	Sufficient confidence in the control environment and reduction of exposure so as to warrant functional level management and oversight only.	FINANCE
Ineffective NDA lifecycle governance of subsidiaries and affiliates (excluding Sellafield)*	Sufficient confidence in the control environment and reduction of exposure so as to warrant functional level management and oversight only.	FINANCE
The NDA group is unable to deal with the effect of a cyber attack	cyber, security and resilience programme	SECURITY AND CORPORATE SERVICES
Loss of stakeholder confidence in the NDA’s ability to safely lead the mission and demonstrate value for money	stakeholder engagement framework	COMMUNICATIONS
Threats to the GDF lead to increased cost and risk to the NDA mission*	GDF siting process RWM transformation plan	NUCLEAR OPERATIONS
Unsuccessful transition of the Magnox site licence company from a PBO to a new ownership model	NDA Magnox Transition team and project Transition Governance	NUCLEAR OPERATIONS
Failure to deliver and or sustain organisational improvements to the NDA undermining our ability to demonstrate value for money*	business improvement activities One NDA	CEO
Brexit related policy changes and disruption to business operations threaten the NDA mission*	engaging in EURATOM exit policy response Brexit business impact assessments dual-use procurement planning No Deal preparedness	STRATEGY AND TECHNOLOGY

*Risks subject to deep dive reviews by the Board committees during 2018/19.

Information governance

The NDA Group Security and Corporate Services (S&CS) Director has responsibility for the Information Governance, Information and Communications Technology and Cyber Strategies across the NDA Group.

This covers all aspects of:

• cyber security
• physical security and resilience planning
• knowledge and information management
• digital and data management
• information security and assurance
• information and communications technology
• management of intellectual property
• information risk management

The NDA Senior Information Risk Owner (SIRO) and the S&CS Lead Team have continued to provide effective management of information risks and issues arising across the nuclear estate. This includes leadership and governance of the Cyber Security and Resilience Programme and the Information Governance Programme, both of which have delivered key milestones throughout the year.

During the last year, we have reduced risk across the group by:

• establishing a standardised cyber security operating model based on best practice of the National Institute of Science and Technology
• developing the first-ever comprehensive information systems asset database for the NDA group - a key first step to being able to effectively understand and manage ‘operational cyber risk’
• relocating the NDA-owned secret and top secret archive collections to Nucleus, (the Nuclear and Caithness Archives) without incident.
• completing a programme of certified training of key Information risk management professionals (SIROs, Chief Information Security Officers & Information Asset Owners) to a nationally recognised standard (GCHQ)
• delivering a secure collaboration platform (The Hub) enabling the sharing of knowledge and know-how for all parts of the NDA estate including suppliers and general public (circa 25,000 potential users)
• delivering an NDA private cloud (Ecosystem) for information up to Official Sensitive (Sensitive Nuclear Information) for the Hub but capable of simple modular expansion to cover all NDA cloud requirements
• Wide Area Network (WAN) separation; the separation of legacy networks, in order to reduce the cyber risk
• installing protective monitoring on all of the NDA group networks

The NDA Corporate Centre has put in place measures and plans to respond to the impact of the General Data Protection Regulations which came into force in May 2018. The SIRO’s assessment is that the NDA continues to make good progress with a mature plan in place in order to ensure full compliance with the new legislation.

The cross-Group SIRO forum, comprising senior NDA staff and Directors from our businesses are responsible for Information Risk, to meet regularly to provide governance over the group assurance programme and audit performance reviews in these areas.

Modern Slavery Act 2015

The Modern Slavery Act 2015 requires organisations with a global turnover above £36 million to publish an annual slavery and human trafficking statement disclosing what steps are being taken to ensure modern slavery is not taking place in any of their business or supply chains.

Our activities to combat slavery and trafficking are risk based and correspond to the level of risk identified. We know our biggest risk is within our indirect, group-wide supply chain. We expect suppliers to adhere to the same high standards as the NDA.

We have benchmarked our processes against best practice elsewhere. Clauses have been inserted into the NDA standard terms and conditions requiring suppliers to comply with the anti-slavery legislation and we expect our businesses and supply chain to do the same and have added wording to NDA tender documents to draw attention to our zero tolerance stance on slavery issues. Existing tender documentation includes the mandatory exclusion of any bidder who convicted of an offence under the Modern Slavery Act 2015.

Around 700 organisations are signed up to our Supply Chain Charter and the revisions regarding compliance with the Modern Slavery Act 2015 are being highlighted to each supplier.

In compliance with the legislation, the NDA produces and publishes an annual statement, approved by the Board, which sets out our position on modern slavery, our understanding of the risks and implications, and the steps that we are taking to mitigate the risks and ensure that slavery and human trafficking do not exist within the NDA or within our supply chain.

As of March 2019, no instance of slavery or human trafficking has been identified.

Effectiveness of the control environment

As Accounting Officer, I have responsibility for ensuring the system of internal control and its effectiveness are both sound. I am also personally accountable for safeguarding the public funds allocated to the NDA, as well as departmental assets, in line with the HM Treasury publication ‘Managing Public Money’. Support for these activities is provided by the NDA internal audit function, the external auditors (the National Audit Office) and other assurance functions, both within the NDA and across the group. I reported last year that I had also appointed a Chief Compliance Officer to further enhance the internal control environment.

In accordance with Treasury guidance, the NDA system of internal control has been in place for the period commencing 1 April 2018 up to the approval date for the Annual Report and Accounts. The system is designed to manage risk to a reasonable level while complying with relevant rules and regulations.

It is impossible to eliminate all risk of failure in implementing policies, aims and objectives; therefore the system provides assurance of effectiveness to a level that is reasonable rather than absolute. My executive team members are responsible for developing and maintaining the internal control framework in their own functional areas. Oversight and challenge to the system is provided by the Board and also by the Audit and Risk Assurance Committee, who ensure plans are in place to address any weaknesses.

Significant reliance is placed on those controls operated by businesses across the group. In line with government requirements, the NDA Modelling and Analysis Team tests the robustness of the end-to-end process used in developing all the group’s business-critical models and spreadsheets that influence the NDA’s key business decisions. The NDA is compliant with the implementation of the MacPherson Review of Quality Assurance (QA) of Government Analytical Models and has AQuA Book compliant processes in place.

During the year, I have appointed a new Group Head of Internal Audit, with a particular focus on aligning and improving audit and advisory services across the group. This should improve the quality and consistency of group-wide arrangements and also further support our overall visibility, understanding and ongoing improvement in matters of corporate governance, risk management and internal control. The development of the Compliance function is progressing well. Particular focus has been given to the roll-out and embedding of our code of conduct and review and update of our delegated authorities during the year. Alongside these developments, our Audit and Risk Assurance Committee is strengthening relationships and arrangements with the group’s supporting Audit and Oversight Committees at the subsidiaries and site licence companies.

In line with the standard ratings of the Government Internal Audit Agency, NDA’s Group Head of Internal Audit has provided a rating of ’moderate’ to the level of assurance that there is generally a sound framework of governance, risk management and control, both within the NDA and the wider group. This view is based on the work of internal audit, including oversight of the various assurance activities undertaken by the NDA, its subsidiaries and through engagement with the internal audit functions of the businesses.

The NDA internal audit work for 2018/19 was designed to provide assurance against key business processes, along with specific corporate risks. The audit plan covers both the NDA and its subsidiary businesses with the exception of Sellafield, which operates its own stand-alone internal audit function. The findings from the Internal Audit reports across the group receive close attention from both the Executive team and the board via the Audit and Risk Assurance Committee. As we transition to an aligned group internal audit approach, we will introduce group audit themes, enabling a more holistic view of risk and control, emerging issues and trends.

2018/19 NDA-led Internal Audit reviews completed by the year end were assigned ratings as follows: ‘no assurance’ 0%, limited assurance 15%, moderate assurance 27%, high level of assurance 27% and substantial assurance 31%. This represents an overall consistent level of assurance with the previous year, but with an improving trend in individual ratings and findings. Across the group, there has also been an overall improving trend in audit ratings this year.

Areas identified by these internal audit reviews as requiring further strengthening included our response to evolving risks around Information governance, particularly cyber Security and resilience and the General Data Protection Regulation (GDPR). Internal audit reviews also highlighted the need for further improvement in our risk management and sanctioning processes. Business operating processes, including financial, internal procurement and HR controls were generally found to be robust.

On balance, as Accounting Officer, I am therefore confident that the system of internal control operating throughout the past year is effective, and appropriate to meet the NDA’s objectives. In reaching this conclusion, I have taken advice from the Group Head of Internal Audit and the Chief Compliance Officer. I have also been mindful of the outcome of work by several important bodies examining the Magnox procurement; namely the NAO, the Parliamentary Public Accounts Committee and the Magnox Inquiry, and our response to their findings.

David Peattie
Accounting Officer and Chief Executive
18 June 2019

Remuneration and people report

The primary role of the Remuneration Committee is to ensure that an effective remuneration policy is in place to enable the NDA to attract, reward and incentivise executives with the right skills and expertise to successfully deliver the organisation’s goals.

Remuneration Committee (REMCO)

The Remuneration Committee consists of 3 full members:

• Evelyn Dickey (Chair)
• Rob Holden
• Volker Beckers (from Nov 2018)

The following persons may also attend the committee meetings:

• Chief Executive / Accounting Officer except for discussion in relation to their own remuneration
• Group Human Resources Director except for discussion in relation to their own remuneration
• NDA Chairman
• NDA Non-Executive Board Directors

The Remuneration Committee determines the remuneration and terms of service of the Chief Executive and Executive Directors including individual salaries, setting and assessing performance targets, the outturn of performance related pay and arrangements for joiners and leavers.

During the year, the Remuneration Committee has:

• reviewed performance at NDA level and individual executive level to determine the annual bonus awards for the year 2017/18 which were paid in July 2018.
• agreed to put on hold the vesting of the Long-Term Incentive Plan (LTIP) awards granted in 2015 until the outcome of the Magnox Inquiry
• agreement of the awards for the LTIP plan to vest in 2021
• reviewed executive remuneration, benchmarking and the future methodology of incentive schemes in line with external developments on corporate governance

Remuneration Policy

The attraction and retention of high-calibre executives is critical in delivering NDA’s mission and ensuring true value for money.

Attracting and retaining leaders of the necessary calibre requires remuneration arrangements that are reasonable in the markets in which we compete for talent, and which fairly reflect the appropriate market rates for the skills and experience of the relevant individual.

Executive rewards should rightly acknowledge the professional expertise required to address the challenge of UK nuclear decommissioning, whilst also providing value for taxpayers in a constrained economic climate.

The challenges for NDA leadership range from setting future strategy to optimising delivery of decommissioning plans across the NDA portfolio and seeking innovative ways to maintain around £1 billion per annum of commercial income.

These challenges require business and specialised technical expertise. Such skills inevitably command a premium and this competitive market is intensified by increasing demands from the international nuclear sector, as well as from major infrastructure projects in the UK and overseas.

The committee routinely seeks independent advice on remuneration using specialist advice from Korn Ferry and, in reaching its conclusions, assesses both public and private sector data to set a level of reward that ensures we can confidently drive forward the improved performance needed across our group.

The remuneration policy has been applied throughout the year and will continue going forward, supporting our ability to attract, retain and motivate the people needed to deliver the mission.

Directors’ contracts

Non-Executive Board Directors

Non-Executive Board Directors are appointed by the Secretary of State for BEIS in conjunction with Scottish Ministers following consultation with the NDA Chairman and in line with codes of practice issued by the Commission of Public Appointments.

Directors’ remuneration

The remuneration of the Chief Executive and Executive Directors comprises base pay, car allowance, an annual performance-related payment, a Long- Term Incentive Plan (LTIP) and pension entitlements.

Salaries

In setting salaries this year, the Committee again noted pay increases across the private sector and the demands on public spend. The pay increase for 2018/19 was set at 1.5% which took into consideration that pay increases across the NDA and the wider public sector had been set at 1% for the previous six years.

Performance-related pay

Executive awards are linked to the achievement of personal and corporate objectives, both aligned to our Corporate Plan. Objectives are approved at the beginning of the financial year by the Board.

In June 2019, a report on achievement of the NDA group key targets for 2018/19 was prepared by BEIS Internal Audit and reviewed by the Audit and Risk Assurance Committee. After considering this report, the Remuneration Committee made a recommendation to award an overall 73% achievement of the corporate element of bonus award, and this was subsequently endorsed by the board.

The individual performance and contribution of each executive was also reviewed and percentage achievement figures confirmed.

Long-term Incentive Plan (LTIP)

The aim is to motivate executives to improve performance and increase engagement in activities to deliver on longer-term outcomes. The NDA’s LTIP scheme is subject to the achievement of objectives which are long-term, strategically important, quantifiable and subject to the leadership of the NDA.

An LTIP award is made at the start of each three-year LTIP period and is subject to a multiplier which can either increase or decrease depending on performance against targets and improvements to the operating plan as determined by the Remuneration Committee. Progress against LTIP targets are reviewed regularly as part of the Remuneration Committee meetings.

A decision on payment of the LTIP scheme for 2015/18 has been deferred pending the outcome of the Magnox Inquiry. In addition, the outturn of the 2016/19 LTIP multiplier was assessed at 1.22 out of a possible score of 2. This was based upon a review of the LTIP performance milestones and improvements over and above the operating plan.

Civil Service Pensions

Pension benefits are provided through the Civil Service Pension Arrangements. From 1 April 2015 a new pension scheme for public/civil servants was introduced – the Public/Civil Servants and Others Pension Scheme or alpha, which provides benefits on a career average basis with a normal pension age equal to the member’s state pension age (or 65 if higher). From that date all newly appointed public/civil servants and the majority of those already in service, joined alpha. Prior to that date, public/ civil servants participated in the Principal Civil Service Pension Scheme (PCSPS).

The PCSPS has four sections:

Three providing benefits on a final salary basis (classic, premium or classic plus) with a normal pension age of 60; and one providing benefits on a whole career basis (nuvos) with a normal pension age of 65.

These statutory arrangements are unfunded with the cost of benefits met by monies voted by Parliament each year. Pensions payable under existing schemes - Classic, Premium, Classic Plus and Nuvos are currently increased annually in line with the Pensions Increase Legislation. See Pension detail for more. Pension benefits for Executive Directors are provided through the Civil Service Pension Arrangements.

Employees are automatically enrolled into alpha on appointment to employment at the NDA. This is in line with the auto enrolment rules of the Pensions Act 2008, however, they have the ability to opt out of the scheme at any time or elect to join the Partnership Pension Arrangements offered under the Civil Service Pension Arrangements.

Another benefit and option available is under the Automatic Enrolment legislation, where employees no longer have a duty to automatically enrol a new employee where they have reason to believe that employee has registered for fixed protection in relation to Lifetime allowance and requires them not to participate in future pension provision. In these cases, a pension allowance is paid in lieu.

Other benefits

Benefits are listed in the Directors’ Emoluments table with appropriate footnotes. All Executive Directors receive £12,000 per annum as a car allowance.

Fees

The remuneration of the Chairman and Non-Executive Board Directors is determined by BEIS. Non-Executive Board Directors are not involved in decisions relating to their own remuneration and are entitled to fees of £25,000 per annum. Those who chair board committees also receive a fee supplement, details of which can be found in the table below. The Chairman does not receive a supplement for chairing the Nominations Committee.

Non-Executive Board Directors and the Chairman do not receive performance-related bonuses or pension entitlements but are reimbursed for reasonable expenses incurred in the performance of their duties as directors.

Details of directors’ emoluments, pension and cash equivalent transfer values may be seen in the notes to the financial statements and appendices at the end of this section. See gender pay gap for more details.

2018/19	Committee Chair	Fee per annum (£)	Effective Date
Evelyn Dickey	Chair of Remuneration Committee	5,000	09/09/15
Volker Beckers	Chair of Audit and Risk Assurance Committee	5,000	17/03/16
Janet Ashdown	Chair of Safety and Security Committee	5,000	17/03/16
Rob Holden	Chair of Programmes and Projects Committee	5,000	16/05/17
Tom Smith	Chair of Nominations Committee	-	15/11/18

Ratio between median earnings of organisation’s workforce and highest paid Director (‘Hutton’ Disclosure)

(This information has been audited)

Category	2018/19 Total £	2017/18 Total £
Band of highest paid Director’s total remuneration	495,000-500,00	495,000-500,00
Median total remuneration	73,840	67,959
Ratio	6.7	7.3.1
Band of lowest paid employee’s total remuneration	20,000 - 25,000	20,000 - 25,000

This table shows the ratio of the highest earning Director against that of the employee at the median in earnings, as well as the range. The data includes base pay, allowances and performance related payments as well as severance payments. It does not include employer pension contributions and the cash equivalent transfer value of pensions. The change in ratio results from a higher median pay (higher bonus payment) following the previous year’s impact of non-payment of the corporate element of the bonus scheme for the year 16/17.

People report

Our focus is on developing a high-performing organisation that is committed to continuous improvement in all we do. We want the NDA to be a great place to work, where employees can share their ideas, views and concerns, and feel supported, trusted, valued and respected. The following sections provide updates on key areas of progress in 2018/19.

Development and capability

National skills

Our NDA People Strategy is concerned with how we recruit and invest in our people. It focuses on priorities that will secure the capability we need to deliver our mission, ensuring we have the right skills in place at the right time. Through our People Strategy, we have created a platform of collaboration across the NDA Group and with wider stakeholders including: government, trade unions, Local Enterprise Partnerships, academia and skills bodies.

The Nuclear Skills Strategy Group (NSSG) was formed to represent all parts of the industry, working with government and trade unions, setting out the strategic skills priorities. We are a core member of the Group and take a lead role in representing decommissioning within the wider nuclear context. Nuclear activities in the UK today are diverse. Ranging from design to remediation, they support all parts of the nuclear cycle from new build through to decommissioning, and operation and maintenance of nuclear submarine propulsion and weapon systems, as well as regulatory requirements related to all these activities.

In June 2018, the government’s Nuclear Sector Deal was published, setting out the opportunities and challenges for the sector within the context of the Industrial Strategy.

The skills elements of the deal and the associated actions are mandated to the leadership of the NSSG and include:

• meeting the forward demand
• maintenance of subject matter expertise
• transferability and mobility
• increasing the proportion of women employed in the sector to 40% by 2030

We have reviewed our people strategy and associated projects to ensure we are aligned to the Nuclear Sector Deal, and that the targets are reflected in our own aspirations for the future.

Our priorities are supported by a number of programmes where we are taking an integral development and implementation role. These are:

• establishing robust baselines and data on skills gaps in the short, medium and long-term
• ensuring the NDA group is maximising the use of the apprenticeship levy for both new entrants and existing workforce
• supporting the creation of new apprenticeship programmes for the supply chain and local communities in line with the public sector apprenticeship targets
• increasing the number of apprentices across the estate to 2,000 by 2020 (during 2018/19 there were just under 1,000)
• improving equality, diversity and inclusion across all of our recruitment programmes and practices
• engaging young people and enhancing long-term career opportunities within the nuclear sector
• providing opportunities for continued professional development of the existing workforce, particularly people who are mid-career
• creating an environment where highly skilled individuals can pass on their knowledge and mentor the next generation, to future-proof the sector’s skills and competence base

A skills audit has taken place across the group. Work is currently under way to review this audit and create a plan to enhance and retain key skills within the organisation and across the group.

Mobility and transferability

The ability to deploy our skilled individuals effectively throughout the NDA group has been a priority focus for 2018/19.

In line with our core principles of collaboration, development and creativity, mobility and transferability, we support the professional development of our people. We take a group-wide view of talent management and succession planning.

Creating the right environment to enable our people to be mobile and have the ability to transfer across our group is paramount. We are consulting with trade unions about our group-wide strategy, associated policies and approaches to secondments, group-wide roles and greater group-wide collaboration for implementation in 2019.

Equality, diversity and inclusion

Cleaning up the UK’s earliest nuclear sites will require the brightest minds and most dedicated people fordecades to come.

We firmly believe that organisations that take Equality, diversity and inclusion (ED&I) seriously attract and retain the best people, perform better and ultimately are more successful. So creating an environment where differences of thought and perspectives are encouraged isn’t just the right thing to do, it’s good for our business.

We’re working to transform our work environments into places where everyone is treated with dignity and respect, where an inclusive culture encourages diversity of thought and where people can bring their whole selves to work.

The ED&I Group Strategy, launched in May 2018, set out the NDA group approach to creating a culture of respect, inclusion and diversity across the nuclear decommissioning sector.

We are setting ourselves stretching targets to be reached by 2022 that will be reviewed annually to measure and monitor progress.

In addition, our diversity and respect at work policies outline the rights of all employees, as well as the responsibility on all employees to comply with equality legislation.

In line with our policies, we work hard to support all individuals who are disabled. This includes those seeking employment with the NDA, as well as those employees who have become recently disabled. In doing this:

• we are a ‘disability confident’ employer
• we give full and fair consideration to applications for employment, where all screening and assessment is carried out in line with our recruitment standards and with reference to the candidate’s aptitudes and abilities
• we make reasonable adjustments and arrange appropriate training for employees who are disabled, or have become recently disabled, in order to support their continuing employment, training, career development and promotion

Gender pay

Across the NDA estate, the gender pay gap ranges from around 9% to 42%. The estate average is 13.1% mean pay gap and 11.2% median compared with 14.2% and 12.8% the previous year.

Although this shows a slight improvement, we still have a difficult task ahead. We have fewer women in senior positions and fewer men in more junior positions across our businesses. There are also more women occupying ‘support roles’ at the lower end of salary scales and under-representation of women in shift roles, which attract higher pay through shift premiums.

Our real challenge is ensuring we continue to see sustained improvements over the next few years.

With regard to the gender pay gap, within the NDA itself, the figures published in March 2018 as per reporting requirements, were based upon 220 total NDA employees (98 female and 122 male) with the overall gender pay gap for the NDA, when comparing mean pay, being 40.3% and the median pay gap being 42.6%.

Further details on the gender pay gap can be found in the recently published NDA Gender Pay Gap report, which is available at nda.gov.uk.

Joint Consultation Group

The NDA has been continuing to develop a strategic relationship with the national officers of Prospect, GMB and Unite trade unions across the wider group. The aim is to “Work together to decommission the UK’s nuclear legacy safely and effectively, helping to deliver a future for our workforces and our communities.”

Within the NDA, our working relationship between Prospect Trade Union and employee representatives is well established and continues to operate in a constructive manner. Employees (below Executive) will continue to be covered by a voluntary collective bargaining arrangement with Prospect, covering:

• the annual pay award
• holidays
• hours of work

We recognise that the decision to join, or not to join, the union is entirely a matter of individual choice. All NDA employees are free to become and remain members without prejudice to employment or career prospects. Employees who choose to become trade union members are encouraged to have an active participation in union life.

Leadership

Our focus this year has been on continuing to develop the capability of the NDA workforce. In partnership with Korn Ferry, leadership development training has been rolled out to three cohorts covering personal brand and effectiveness (50% complete), leading through others (50% complete) and legal essentials (90% complete).

More focused training has taken place this year, looking at specific areas of need and practical guidance training specifically Advisory, Conciliation and Arbitration Service (ACAS) investigators course, Choose Respect workshops and unconscious bias training.

Coaching and mentoring of NDA employees remains a strategic focus, with 20 senior leaders identified to work with an external coach to focus on areas of development. In addition, one leader will receive coaching internally through a qualified member of the Executive Team. During the year an internal mentoring programme was rolled out and 17 mentors were trained to provide mentoring to employees at all levels.

Executive & Non-Executive Development

2018/19 saw investment in Executive and Non- Executive development with the Institute of Director training. The Board members also received training and guidance from Eversheds on members duties and obligations and from Linklaters on the concept of controlling mind.

Whilst our aim is to recruit for senior roles through targeted development of our employees, we have and will continue to recruit from the marketplace to strengthen our capabilities. In building capability, we have adopted a balanced approach to learning and created a suite of leadership development solutions. We target 70% of all learning through on-the-job development, with 20% as relationship-based learning such as mentoring and the remaining 10% through direct training or a classroom-based approach.

Commercial Directorate review

On 1 October 2018, 25 INS commercial colleagues joined the NDA by TUPE transfer to enhance the NDA commercial directorate. This was a key milestone in building an exemplar NDA commercial function that is recognised across government.

Embedding the career and progression framework

Ensuring the NDA has the right people in role, with the right skills, is vital to delivering our mission. The Career and Progression Framework details the key skills required at every level.

Following the pilot of progressional promotion panels in December 2017, we held 2 rounds of panels during 2018/19. These are proving to be an effective way to assess employees for promotion while evaluations after each panel have brought continuous improvement to the process.

We recognise that how we do things is as important as what we do. During 2018/19, in conjunction with employees, we have developed revised values – respect, openness, collaboration, performance and creativity. These are now embedded into our recruitment standards and will be part of our performance management process from 2019/20. Our recruitment standards cover the key elements required for the role and the values in order that we can comprehensively assess candidates. This will flow through the performance management and talent processes to ensure we have an effective and consistent approach to recruitment and developing talent.

Diagram showing the NDA career and progression framework

Headcount and employee costs

NDA Group staff costs

(This information has been audited)

NDA Group 2019	NDA Authority (a) Permanently employed staff £m	NDA Authority (a) Others £m	Subsidiaries (b) Permanently employed staff £m	Subsidiaries (b) Others £m	Total
Wages and salaries	20	6	631	42	699
Social security costs	2	-	72	-	74
Pension costs	3	-	114	-	117
Total staff costs	25	6	817	42	890

NDA Group 2018	NDA Authority (a) Permanently employed staff £m	NDA Authority (a) Others £m	Subsidiaries (b) Permanently employed staff £m	Subsidiaries (b) Others £m	Total
Wages and salaries	18	3	641	42	704
Social security costs	2	-	74	-	76
Pension costs	3	-	103	-	106
Total staff costs	23	3	818	42	886

(a) Authority people costs are included within administration expenditure (see note 5 to the accounts in the financial statements) (b) Subsidiary people costs are reported through the ‘contractor and subsidiary costs’ line in the financial statements (see note 6 to the accounts)

The group participates in various pension schemes, both defined contribution and defined benefit.

Further details can be found in note 26 to the Accounts.

Pension costs include only those items appearing within operating costs. Items reported elsewhere have been excluded.

The average number of full-time equivalent persons employed during the year was as follows:

(This information has been audited)

NDA Group	Permanently employed people no.	Others no.	Total 2019 no.	Total 2018 no.
Directly employed - Authority	235	73	308	234
Directly employed - Subsidiaries	11,757	677	12,434	12,569
Total	11,992	750	12,742	12,803

Of the total NDA permanent and fixed term employees at the end of March 2019, the breakdown by gender is as follows:

Authority 2019	Male	Female	Total
Chief Executive	1	-	1
Exec Directors excl. CEO	1	-	1
Other Directors (non-Board)	8	1	9
Other employees	108	116	224
Total	118	117	235

Notes to the Remuneration Report

Tax arrangements of public sector appointees

As a public body, the NDA adheres to the IR35 regulations in deeming if any temporary roles will be captured within the legislation or deemed out of scope of the legislation. In determining this information, we utilise the IR35 checker provided by HMRC on www.gov.uk. We are required to provide information about off-payroll appointments of consultants, contractors or people employed for longer than six months. We only use these arrangements where we cannot avoid them, for example to bring in unique skills, capability and experience that we do not have in-house.

We look to minimise the use of these arrangements and include contractual clauses in appointment documentation to enable us to receive assurance that the individual or their employer is managing their tax affairs appropriately. Our right to request assurance over tax obligations is made explicit to all off-payroll workers. We continue to work closely with Ernst and Young, our chosen partners for IR35 auditing and supporting our IR35 checks with assured compliance.

Our off-payroll appointments at 31 March 2019 for individuals on more than £220 per day and lasting more than six months (up until the expected end date – not 31 March 2018) are detailed below. There were six new off-payroll workers in the year whose assignments lasted more than six months (between start (after 1 April 2018) up to 31 March 2019 not end of contract). No senior management were paid through off-payroll arrangement during this reporting period.

Length of appointment at 31 March 2019	No. of off payroll contractors
Less than 1 year	9
1-2 years	10
2-3 years	2
3-4 years	-
More than 4 years	2

Consultancy spend in the year was £1,942,200 (2017/18: £59,000), being consultancy support for our organisational design programme.

Employee turnover and health and well-being

We recognise that health and wellbeing at work is vital. We closely monitor both short-term and long-term sickness absence and have policies and support mechanisms in place. This includes access to an external employee assistance service (EAP), helping us manage and support individuals back to work.

For 2018/19, an average of 4.6 days per employee was lost to sickness absence. This equates to an absence rate of 1.83% and is less than the national average of 6.3 days. An analysis of 2018/19 total absence identifies that mental health contributed to the majority of long-term absences.

Our focus for the coming year is to further promote mental health and well-being as we work closely with the NDA ED&I group sharing best practice and innovative ways of raising awareness.

Another focus will be on the absence management process which will be reviewed and advertised around the business together with training sessions to all line managers on recording and managing absence.

People turnover

The average length of service is seven years and for the year 2018/19 turnover of permanent people was 7%. This compares to an average external turnover rate of 16.5% (as per latest CIPD survey).

This information has been audited.

During 2018/19, no one was in receipt of an exit package.

In 2017/18, there was one individual left the NDA with an exit package as set out below.

2018 Exit package cost band	Number of compulsory redundancies	Number of other agreed departures	Total no. of exit packages by cost band
£50,000 - £99,999	-	1	1
Total no of exit packages	-	1	1

Pension detail

Employee contributions are set at the rate shown in the table below:

Annual Pensionable Earnings (full-time equivalent basis)	All PCSPS Schemes and alpha 2018/19 contributions
Up to £15,000	4.60%
£15,001-£21,210	4.60%
£21,211-£48,471	5.45%
£48,472-£150,000	7.35%
Over £150,000	8.05%

Employee membership of NDA schemes is noted in the table below:

Scheme	% of employees
alpha	77
Nuvos/Premium/Classic	12
Partnership	2
UKAEA (INS TUPE)	7
Opt Out	2

Existing members of the PCSPS who were within 10 years of their normal pension age on 1 April 2012 remained in the PCSPS after 1 April 2015. Those who were between 10 years and 13 years and five months from their normal pension age on 1 April 2012 will switch into alpha between 1 June 2015 and 1 February 2022. All members who switch to alpha have their PCSPS benefits ‘banked’, with those with earlier benefits in one of the final salary sections of the PCSPS having those benefits based on their final salary when they leave alpha. (The pension figures quoted for officials show pension earned in PCSPS or alpha – as appropriate. Where the official has benefits in both the PCSPS and alpha the figure quoted is the combined value of their benefits in the two schemes.) Members joining from October 2002 may opt for either the appropriate defined benefit arrangement or a ‘money purchase’ stakeholder pension with an employer contribution (partnership pension account).

Employee contributions are salary-related and range between 4.6% and 8.05% for members of classic, premium, classic plus, nuvos and alpha. Benefits in classic accrue at the rate of 1/80th of final pensionable earnings for each year of service. In addition, a lump sum equivalent to three years initial pension is payable on retirement. For premium, benefits accrue at the rate of 1/60th of final pensionable earnings for each year of service. Unlike classic, there is no automatic lump sum. classic plus is essentially a hybrid with benefits for service before 1 October 2002 calculated broadly as per classic and benefits for service from October 2002 worked out as in premium. In nuvos a member builds up a pension based on his pensionable earnings during their period of scheme membership. At the end of the scheme year (31 March) the member’s earned pension account is credited with 2.3% of their pensionable earnings in that scheme year and the accrued pension is uprated in line with Pensions Increase legislation. Benefits in alpha build up in a similar way to nuvos, except that the accrual rate is 2.32%. In all cases members may opt to give up (commute) pension for a lump sum up to the limits set by the Finance Act 2004.

The partnership pension account is a stakeholder pension arrangement. The employer makes a basic contribution of between 8% and 14.75% (depending on the age of the member) into a stakeholder pension product chosen by the employee from a panel of providers. The employee does not have to contribute, but where they do make contributions, the employer will match these up to a limit of 3% of pensionable salary (in addition to the employer’s basic contribution). Employers also contribute a further 0.5% of pensionable salary to cover the cost of centrally-provided risk benefit cover (death in service and ill health retirement).

The accrued pension quoted is the pension the member is entitled to receive when they reach pension age, or immediately on ceasing to be an active member of the scheme if they are already at or over pension age. Pension age is 60 for members of classic, premium and classic plus, 65 for members of nuvos, and the higher of 65 or State Pension Age for members of alpha. (The pension figures quoted for officials show pension earned in PCSPS or alpha – as appropriate. Where the official has benefits in both the PCSPS and alpha the figure quoted is the combined value of their benefits in the two schemes, but note that part of that pension may be payable from different ages.)

Directors’ emoluments

(This information is subject to and has been audited.)

2018 to 2019	Salaries £	Additional benefits £	Performance Related Payment £	LTIP payments made £	Pension benefits (ix) £	Total emoluments £
Tom Smith	150,000	-	150,000
Volker Beckers (i)	30,000	-	-	-	-	30,000
Evelyn Dickey (ii)	30,000	-	-	-	-	30,000
Janet Ashdown (iii)	30,000	-	-	-	-	30,000
Rob Holden (iv)	30,000	-	-	-	-	30,000
Candida Morley (v)	-	-	-	-	-	-
David Batters (vi)	235,295	16,508	69,647	41,102	90,236	452,788
Adrian Simper (vii)	136,687	8,000	40,459	20,467	67,907	273,520
David Peattie (viii)	314,650	58,411	125,860	-	-	498,921

2017 to 2018	Salaries £	Additional benefits £	Performance Related Payment £	LTIP payments made (x) £	Pension benefits (ix) £	Total emoluments £
Tom Smith	150,000	-	-	-	-	150,000
Volker Beckers (i)	30,202	-	-	-	-	30,202
Evelyn Dickey (ii)	30,417	-	-	-	-	30,417
Janet Ashdown (iii)	30,202	-	-	-	-	30,202
Rob Holden (iv)	29,167	-	-	-	-	29,167
Candida Morley (v)	-	-	-	-	-	-
David Batters (vi)	231,818	12,000	71,863	-	88,902	404,583
Adrian Simper (vii)	202,000	12,000	57,750	-	70,111	341,681
David Peattie (viii)	310,000	57,725	131,750	-	-	499,475

(i) salary £25,000 per annum, 2017/18 and 2018/19 include fees of £5,000 for the role of Chair of the Audit and Risk Assurance Committee. 2017/18 figure includes adjustment of £202 in respect of previous period

(ii) salary £25,000 per annum, 2017/18 and 2018/19 include fees of £5,000 paid for the role of Chair of the Remuneration Committee. 2017/18 figure also includes adjustment of £417 in respect of the previous period.

(iii) salary £25,000 per annum, 2017/18 and 2018/19 include fees of £5,000 agreed for the role of Chair of the Safety and Security Committee. 2017/18 figure includes adjustment of £202 in respect of previous period.

(iv) salary £25,000 per annum, 2018/19 include fees of £5,000 agreed for the Chair of the Programmes and Projects Committee (2017/18: £4,167)

(v) Did not receive any remuneration for her services to the Board

(vi) additional benefits received was a car allowance of £12,000, compensation for unused annual leave £4,508 18/19.

(vii) resigned as an Executive Board Director with effect from 28 November 2018; appointed as a member of the Executive team on 29 November 2018. 2018/19 annual salary of £202,000; only April to November 2018 salary as the Executive Board Director has been disclosed. Additional benefits received was a car allowance of £12,000 and in 2017/18; only April to November 2018 additional benefits as Executive Board Director have been disclosed.

(viii) additional benefits received was a car allowance of £12,000, and a pension allowance of £46,411 (2017/18: £45,725)

(ix) pension benefits within the PCSPS schemes and alpha are calculated as 20 times the real increase in pension during the year, plus the real increase in any lump sum, less employee contributions made, in accordance with HMG guidelines.

(x) award of LTIP payment 2015/18 scheme was deferred pending a decision by the Remuneration Committee following the Magnox Inquiry report.

Executive Directors’ pensions

(This information is subject to and has been audited.)

Director	Real Increase in Pension during the year 2018 to 2019 £000’s	Accrued Pension at 31 March 2018 £000’s	CETV at 31 March 2018 £000’s	CETV at 31 March 2019 £000’s	Real Increase in CETV Funded by Employer £000’s
David Batters	5-7.5	40-45	459	590	51
Adrian Simper	5-7.5	80-85	1,139	1,361	64
David Peattie*	-	-	-	-	-

Notes:* Does not participate in the Civil Service Pension arrangements – see note (viii) to Directors’ Emoluments

Cash equivalent transfer values

A Cash Equivalent Transfer Value (CETV) is the actuarially assessed capitalised value of the pension scheme benefits accrued by a member at a particular point in time. The benefits valued are the member’s accrued benefits and any contingent spouse’s pension payable from the scheme.

A CETV is a payment made by a pension scheme or arrangement to secure pension benefits in another pension scheme or arrangement when the member leaves a scheme and chooses to transfer the benefits accrued in their former scheme. The pension figures shown relate to the benefits accrued by the individual as a consequence of their total membership of the pension scheme, not just their service in a senior capacity to which disclosure applies. The figures include the value of any pension benefits in another scheme or arrangement which the individual has transferred to the Civil Service Pension Arrangements and for which the Civil Superannuation Vote (CS Vote) has received a transfer payment commensurate with the additional pension liabilities being assumed.

They also include any additional pension benefit accrued to the member as a result of their purchasing additional years of pension service in the scheme at their own cost. CETVs are calculated within the guidelines and framework prescribed by the Institute and Faculty of Actuaries.

Real increase in CETV

This reflects the increase in CETV effectively funded by the employer. It does not include the increase in accrued pension due to inflation, contributions paid by the employee (including the value of any benefits transferred from another pension scheme or arrangements) and uses common market valuation factors for the start and end of the period.

Disclosures required under the Trade Union (Facility Time Publication Requirements) Regulations 2017

Relevant union officials

Relevant union officials	Full-time equivalent employee number
7	235

Percentage of time spent on facility time

Percentage of the working hours spent by relevant union officials, employed during the relevant period, on facility time.

Percentage of time	Number of employees
0%	1
1-50%	6
51-99%	-
100%	-

Percentage of pay bill spent on facility time

Total cost of facility time	£17,961
Total pay bill	£20,661,322
Percentage of the total pay bill spent on facility time, calculated as: (total cost of facility time ÷ total pay bill) x 100	0.1%

Paid trade union activities

Time spent on paid trade union activities as a percentage of total paid facility time hours calculated as (total hours spent on paid trade union activities by relevant union officials during the relevant period ÷ total paid facility time hours) x 100

0.1%

Health, safety, security, safeguards and environment report

The safety of people, protection of the environment and security of nuclear materials and information are the NDA’s overriding priorities and dictate our approach to all activities across the group.

NDA safety and environmental performance

The NDA’s safety performance continued to be good, with no serious accidents or injuries during the year.

‘See Something, Say Something’, our reporting process for accidents, incidents, observations, near misses and good practice has started to provide us with useful information. We use the analysis to report to and consult with our safety representatives every quarter. As we move forward with the continuous improvement initiative company wide, this information will be used to establish trends and issues that will inform forward improvement plans.

This year, we started the process of streamlining and simplifying our documents in line with HSE guidance and our One NDA approach.

Government has set environment and waste targets that must be met by 2019/20, taking 2009/10 as the baseline year. The specific targets and our achievements are shown in the table.

TARGET 2019/20	PERFORMANCE 2018/19
Reduce greenhouse gas emissions by 66%	60%
Reduce domestic flights by 30%	68%
Reduce waste generation by 25%	49%
Reduce landfill disposal to less than 10%	0%
Reduce paper use by 50%	72%
Reduce water use by 10%	17%

The targets apply to the NDA combined with Radioactive Waste Management (RWM) as in the baseline year RWM was part of the NDA.

The greenhouse gas emissions reduction target was reset from 32% to 66% by BEIS in 2018/19. We have made good progress in reducing our emissions but meeting the new target in the time available will prove challenging. The increased occupancy at our office in Cumbria may prevent us meeting the water target without some intervention. RWM is also moving to a more environmentally friendly office in 2019/20. However, this leaves redundant equipment which will increase our waste generation this year but should help to reduce it in future years.

Business - safety performance

We use a suite of metrics, targets and performance indicators to analyse safety performance. We also visit sites to carry out safety reviews and discuss safety directly with managers, workers and trade union representatives. The results are reported to the NDA Executive and the NDA Safety and Security Committee (S&SC), a sub-committee of the NDA Board, and the findings are raised with businesses and Parent Body Organisations, who are expected to produce and enact plans to mitigate any risks arising.

Sellafield

In May 2018, we were advised by the Office for Nuclear Regulation (ONR) that it would prosecute Sellafield Ltd over the contamination of a worker. Sellafield pleaded guilty to an offence under section 2(1) of the Health and Safety at Work act 1974 and subsequently received a fine of £380,000 plus £96,753 legal costs. Sellafield welcomed ONR comments that the incident did not point to any broader concern about the control of risks and hazards across the site. Lessons have been learned, and improvements implemented to prevent a recurrence.

Sellafield reported 3 RIDDOR Dangerous Occurrences: the failure of a cast iron cable joint, an electrical cable strike and a spill of nitric acid. Although no one was hurt by any of these events we are hugely disappointed to see this drop in safety performance. All of the above have been subject to Sellafield’s investigation process and actions have been put in place to prevent recurrence.

Sellafield’s accident rate, which is a measure of actual harm, remained the same as last year, indicating that the fundamentals of good safety management are in place. We did note an increase in the number of events that resulted in people taking time off work to recover (Lost-Time Accidents), the severity of some types of injury and the number of events where human performance was a contributory factor. Serious events were rare. The trends noted by the NDA were identified independently by Sellafield and recognised as a risk to the business. Sellafield’s proposals for corrective action were taken to the March 2019 NDA S&SC and were accepted.

Dounreay

Dounreay Site Restoration Ltd (DSRL) continued the good work of last year by achieving further improvements in safety and environmental performance. SEPA’s (Scottish Environmental Protection Agency) final assessment rating for 2018 at the site and Low Level Waste disposal facility next to the site was “excellent”.

Magnox

Safety performance at Magnox has been acceptable during the year but there remains room for improvement. There was evidence of low level events involving conventional safety, radiation protection and the control and supervision of work. There were also a number of near misses that gave cause for concern.

Magnox recorded one INES1 event this year when operators at Wylfa found an incorrectly fitted flask lid seal during checks - a maintenance anomaly that had no effect on safety. Training and procedures were revised to ensure that we learned from the event.

Magnox has continued to progress its asbestos improvement programme and build on the work delivered during the 2017/18 financial year. Recognition and understanding of the scale of the issue is now embedded.

The NDA set a Performance Based Incentive (a reward mechanism) which identified key deliverables as a method of achieving compliance and value for money. This has improved the management of asbestos at the sites.

Safety and environments events were investigated by Magnox, and action taken to prevent recurrence.

Low Level Waste Repository (LLWR)

Although safety performance took a down-turn at the start of the year with an increase in the number of low-level events, LLWR received support from its Parent Body Organisation (PBO), who undertook an independent corporate safety review and concluded that there were no significant issues or conditions. The review noted that most of the events and injuries involved administrative personnel, or occurred during routine activities. Appropriate changes were made to induction and other training. At the end of the year, LLWR’s accident rate was near to zero.

LLWR received an Enforcement Letter from the ONR for defects in packages used for transporting nuclear material. The packages were embargoed, and repaired and the issue has been resolved.

Subsidiaries

Our other businesses commitment to the highest standards of health and safety was demonstrated through good safety performance this year.

As part of ongoing governance, the NDA has carried out health, safety and environment audits at most of our subsidiaries. The audits did not find any serious safety issues, and corrective actions placed by the NDA are reported to our Executive Committee and centrally monitored to satisfactory completion by our in-house HSE team.

A paper on our approach to sustainability in nuclear decommissioning was approved by the S&SC in March 2019. The changes will be embedded in NDA’s processes in the coming years.

Businesses – environmental performance

• Sellafield, staff found several holes in corroded ventilation ductwork, and received an Environment Agency Enforcement Notice (their first in 10 years) for failing to carry out adequate maintenance. Sellafield is working through a number of improvement programmes in the control of chemicals, wastes, and asset care. Although environmental events did not result in pollution or harm to the environment, environmental awareness must improve, and the NDA is monitoring Sellafield’s progress. The event was subsequently rated INES 1 and the rating was confirmed on 24 April 2019 by the National Officer
• improvements which were started last year have been consolidated this year with very good, sustained environmental performance at Dounreay. This is recognised by SEPA in its compliance evaluation for the year which was confirmed as excellent for both the site and the adjacent Low Level Waste Repository. Improvement has been achieved through senior management leadership, environmental awareness training and all parts of Dounreay recognising the roles they have to play in environmental protection
• environmental performance at Magnox has generally been good. However, it has received warning letters from the environmental regulators this year, largely related to the control of waste. Although the majority of waste is managed with no issue, improvements still need to be made and will be monitored to ensure appropriate actions are in place
• elsewhere, there has been good environmental performance at LLWR and in our businesses NDA Properties Ltd, INS/PNTL, RWM and DRS

NDA group - security performance

Security remains a key focus in the UK civil nuclear sector and the NDA group continues to play a major part in the protection of nuclear and other radiological materials. Throughout the year the group has undertaken reviews of all security measures as part of the re-write of Nuclear Site Security Plans (NSSPs). Regular reviews provide assurances that security is both appropriate and proportionate to minimise risk and incorporate shared learning from across the industry.

Working with key stakeholders such as BEIS, Home Office, ONR, Civil Nuclear Security (CNS) and Civil Nuclear Constabulary (CNC) the NDA group plays a significant role in initiatives designed to continually improve nuclear security. The holistic approach means NDA remains at the forefront of emerging technologies and security best practice, allowing us to develop contingencies and mitigations based on real-time information and horizon-scanning. Specific deliverables include:

a. NDA’s Cyber Security and Resilience Programme (CSRP): NDA’s Cyber Security Programme is fully aligned with the National Cyber Security Strategy and BEIS. This includes supporting development of UK Cyber Security talent by creating Cumbria’s first cyber Lab, and hosting the first cohort of cyber security apprentices for our businesses. b. Supply chain security: The NDA is leading the sector in the development of an aligned approach to protecting information shared with the supply chain in both hard and electronic formats. This work will continue to standardise and simplify the processes and procedures in the NDA group. This should in turn reduce on boarding processes and associated costs; whilst delivering more robust security measures to reduce security risks within the supply chain. c. Alignment of Security and Resilience (S&R) group strategy: An agreed security and resilience strategy was delivered that seeks to capitalise on economies of scale and scope and delivering value or money. This strategy is being implemented to encourage shared learning, improve group governance and standardise common security practices such as vetting and access control. d. Culture and the human factor: Capitalising on the work conducted in 2017, the NDA has developed a learning package that highlights common security errors resulting from the human factor; this learning package will be delivered in the next financial year. e. Governance: Security performance is challenged via the quarterly performance reviews (QPRs) where group businesses are held to account, and improvement actions are placed where required. This approach has helped improve overall group security and is beginning to drive overall group consistency. f. Group security improvement projects: Security enhancements continue through the group with Nucleus (the nuclear and Caithness Archives) providing greater information security through the continued information consolidation programme. Off-Site Command Facility (OSCF) and the Multi-Services Command Facility (MSCF) provide greater capability and resilience.

Financial summary 2018 to 2019

The NDA spend on tackling the legacy

The bulk of the NDA’s budget is directed towards tackling the nuclear legacy, by funding the decommissioning carried out by site licence companies. The remainder funds commercial operations, industry-wide costs, fees to site licence companies. and the NDA’s own running costs.

The NDA spend by site licence company

Spend in 2018/19 was £3.2 billion. More than 60% of this was spent at Sellafield, reflecting the priority given to the site. Expenditure at Sellafield has increased during the NDA’s existence and now stands at £2 billion per year.

The NDA Corporate Centre net spend

The NDA’s own net running costs increased to £51 million per year (£55 million costs less £4 million income), or approximately 1.7% of overall expenditure, reflecting the start of the NDA’s investment in enhanced capability and capacity.

The NDA’s income

The NDA recognised income of over £1 billion in the year, with 87% arising from reprocessing and management of spent fuels and waste. Income from transport and nuclear materials was higher in 2017/18 due to non-recurring commercial transactions.

Note the figures in the above graph are prepared on the basis of government financial reporting (HM Treasury’s Consolidated Budgeting Guidance) which differs in part from the basis used to prepare the financial statements.

The NDA spend on tackling the legacy

The proportion of NDA expenditure tackling the nuclear legacy has increased since 2005, with a corresponding reduction in commercial costs as commercial operations wind down.

The NDA spend by site licence company

Sellafield has always been the NDA’s largest area of spend, and has been increasingly prioritised in recent years as funding has been directed towards the estate’s highest hazards.

The NDA Corporate Centre net spend

After the early years in establishing the NDA’s structure and programme, annual running costs stabilised at below £40 million per year. The trend has been reversed as the NDA has begun to invest in more enhanced capability and capacity in order to ensure the successful delivery of its mission, reflecting the increasing number of subsidiaries and responding to PAC and Magnox Inquiry findings.

The NDA’s income

In recent years electricity generation income has reduced, leaving reprocessing and management of spent fuels and waste as the dominant source of income. In turn this source of income will reduce in the medium term as contracts near completion.

Nuclear provision

The nuclear provision is a single point number in the Statement of Financial Position which represents the discounted estimated cost of the decommissioning mission.

The NDA management’s best estimate of the future costs of the estate is based on an assumed inventory of materials, using strategies for retrieval and disposal over several decades. Each of these elements (quantity, method and time to treat) is uncertain in their own right, as is the cost of developing the necessary technology and plans to deal with these activities. The quality of the forecast becomes less certain as time goes out, and acceptable standards of clean-up and end states may change.

It is important to understand the basis of this estimate and the inherent uncertainty around it, and therefore that it is simply a single point in a credible range of potential outcomes. For more detail see Appendix A.

Changes in 2018/19 estimate Authority

The discounted nuclear provision at the end of 2017/18 was £234.1 billion. Since then the movements have been:

• The value provided for 2017/18 released from the provision - £2.9 billion
• Increases from inflation +£9.9 billion
• Unwinding of the existing discount applied to the provision every year - £3.6 billion
• The impact of the changes in discount rates -£107.7 billion
• Cost estimate changes which increase the liability estimate by £0.9 billion.

These movements bring the 2018/19 Authority estimate to £130.7 billion discounted.

Cost estimate changes reflect updated assumptions on the scope and cost of the work required to achieve the Dounreay interim end state and to deliver the GDF.

The nuclear provision is the best estimate of how much our mission will cost over approximately 120 years

Total expenditure profile (£m, undiscounted)

The graph shows the undiscounted expenditure profile for future years (excluding NDA administrative and other non-programme costs, and some commercial costs) from lifetime cost projections from each of the site licence companies.

The expenditure profile illustrates a downward trend in expenditure over the next 50 years, following a short-term peak over the next 10 years, as sites enter into Care and Maintenance with subsequent increases in expenditure in the period from 2070 when final site clearance work on Magnox sites is undertaken.

Site	2017 to 2018 undiscounted £m	2017 to 2018 discounted £m	Unwind of discount £m	Discount rate change £m	Released in year £m	Inflation £m	Other cost change £m	Movement discounted £m	2018 to 2019 undiscounted £m	2018 to 2019 discounted £m
Magnox	(14,667)	(36,766)	568	21,033	556	(865)	(110)	21,182	(14,571)	(15,584)
Sellafield	(91,385)	(165,889)	2,561	71,165	1,950	(8,312)	(4)	67,360	(93,986)	(98,529)
Dounreay	(2,271)	(2,691)	40	276	188	(62)	(544)	(102)	(2,678)	(2,793)
LLW Repository	(557)	(1,244)	20	647	31	(29)	(23)	646	(560)	(598)
INS Contracts	(43)	(61)	1	14	-	(1)	-	14	(44)	(47)
Springfields	(681)	(1,493)	23	773	53	(34)	-	815	(644)	(678)
Capenhurst	(1,533)	(2,240)	35	628	57	(53)	-	667	(1,511)	(1,573)
GDF	(9,817)	(23,682)	367	13,228	40	(559)	(250)	12,826	(10,266)	(10,856)
Authority	(120,954)	(234,066)	3,615	107,764	2,875	(9,915)	(931)	103,408	(124,260)	(130,658)
NDA group companies	(143)	(170)	-	-	-	-	111	111	(51)	(59)
Group provision adjustment	667	667	-	-	-	-	92	92	759	759
NDA Group	(120,430)	(233,569)	3,615	107,764	2,875	(9,915)	(728)	103,611	(123,552)	(129,958)

Parliamentary accountability disclosures

(The notes and disclosures in this section are subject to audit.)

Losses and special payments

The disclosures in this note are in accordance with ‘Managing Public Money’, and the purpose of this note is to report on losses and special payments of particular interest to Parliament.

Total losses during the year were £1,481,536 (2018: £2,248,145).

Type of loss	2019 Total £	2019 Number of cases	2018 Total £	2018 Number of cases
Cash losses	-	-	-	-
Store losses	363,940	100+	1,943,662	100+
Losses of pay, allowances and superannuation	-	-	-	-
Fruitless payments	82,616	382	76,854	343
Constructive losses	296,624	1	-	-
Claims waived or abandoned	-	-	-	-
Book-keeping losses	-	-	-	-
Failure to make adequate charges	-	-	-	-
Exchange rate fluctuation losses	168,933	1	227,629	1
Special payments	569,423	2	-	-
Total	1,481,536	-	2,248,145	-

A contract loss provision in respect of potentially onerous commercial contracts with foreign countries to reprocess fuel is included within other provisions (note 25 to accounts) and is not included in the losses disclosed above. Constructive losses arose from the writing off of an asset at the Sellafield site.

Store losses relate to the write off of stores items on licensed sites. Special payments included an employment termination payment by LLWR (£92,500) and a fine (£380,000), associated costs (£96,753) and victim surcharge (£170) paid by Sellafield Ltd following a court prosecution safety breaches relating to equipment used for the processing of plutonium on 5 February 2017, following an investigation by the Office for Nuclear Regulation (ONR).

Contingent liabilities

Contingent liabilities not required to be disclosed under IAS 37 but included for parliamentary reporting and accountability purposes:

The NDA has non-quantifiable contingent liabilities arising from indemnities given as part of the contracts for the management of the site licence companies. These indemnities are in respect of the uninsurable residual risk that courts in a country which is not party to the Paris and Brussels Conventions on third party liability in the field of nuclear energy may accept jurisdiction to determine liability in the event of a nuclear incident. Indemnities are in place in respect of Magnox, LLWR and Dounreay, as set out in the relevant Parent Body Agreements. In addition, indemnities are provided to the previous PBOs of Magnox and Sellafield covering the periods in their ownership. These are not treated as contingent liabilities within the meaning of IAS 37 since the possibility of a transfer of economic benefit in settlement is considered too remote.

On 29 March 2017, the UK government submitted its notification to leave the EU in accordance with Article 50. The triggering of Article 50 started a two-year negotiation process between the UK and the EU. On 11 April 2019, the government confirmed agreement with the EU on an extension until 31 October 2019 at the latest, with the option to leave earlier, as soon as a deal has been ratified.

Any subsequent changes in legislation, regulation and funding arrangements are subject to the outcome of the negotiations. As a result, an unquantifiable contingent liability is disclosed. In accordance with accounting standards, no contingent assets can be recognised.

The audit report of the Comptroller and Auditor General to the Houses of Parliament

Opinion on financial statements

I have audited the financial statements of the Nuclear Decommissioning Authority for the year ended 31 March 2019 under the Energy Act 2004. The financial statements comprise: the Group and Authority Statements of Comprehensive Net Expenditure, Financial Position, Cash Flows, Changes in Taxpayers’ Equity; and the related notes, including the significant accounting policies. These financial statements have been prepared under the accounting policies set out within them. I have also audited the information in the Accountability Report that is described in that report as having been audited.

In my opinion:

• the financial statements give a true and fair view of the state of the group’s and of the Nuclear Decommissioning Authority’s affairs as at 31 March 2019 and of the group’s and the Authority’s net expenditure after taxation for the year then ended; and
• the financial statements have been properly prepared in accordance with the Energy Act 2004 and Secretary of State directions issued thereunder.

Emphasis of matter – nuclear provisions

Without qualifying my opinion, I draw attention to the disclosures made in notes 3 and 24 to the financial statements concerning the uncertainties inherent in the nuclear decommissioning provisions. As set out in these notes, given the very long timescales involved and the complexity of the plants and materials being handled, a considerable degree of uncertainty remains over the value of the liability for decommissioning nuclear sites designated by the Secretary of State. Significant changes to the liability could occur as a result of subsequent information and events which are different from the current assumptions adopted by the Authority. Note 24 shows the decrease in the liability during the year to 31 March 2019 arising from the changes in the long-term discount rate, underlining the uncertainty inherent in management’s estimate associated with the long timescales involved and discount rate assumptions.

Emphasis of matter – accounting for waste treatment income

Without qualifying my opinion, I also draw attention to the disclosures made in note 2.2 to the financial statements concerning the recognition of income for waste treatment performance obligations within reprocessing contracts. As set out in that note, the Authority has accounted for the waste treatment elements of overseas reprocessing contracts on a portfolio basis alongside the waste treatment elements of other reprocessing contracts. Management have adopted this treatment as they do not consider that income recognition, in the context of the Authority’s derogation from HM Treasury to apply IFRS 15 on a prospective only basis, would otherwise reflect the overall progress of the waste treatment programme.

Opinion on regularity

In my opinion, in all material respects the income and expenditure recorded in the financial statements have been applied to the purposes intended by Parliament and the financial transactions recorded in the financial statements conform to the authorities which govern them.

Basis of opinions

I conducted my audit in accordance with International Standards on Auditing (ISAs) (UK) and Practice Note 10 ‘Audit of Financial Statements of Public Sector Entities in the United Kingdom’. My responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of my certificate. Those standards require me and my staff to comply with the Financial Reporting Council’s Revised Ethical Standard 2016. I am independent of the Nuclear Decommissioning Authority in accordance with the ethical requirements that are relevant to my audit and the financial statements in the UK. My staff and I have fulfilled our other ethical responsibilities in accordance with these requirements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

Conclusions relating to going concern

I am required to conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group’s and the Nuclear Decommissioning Authority’s ability to continue as a going concern for a period of at least twelve months from the date of approval of the financial statements. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my auditor’s report. However, future events or conditions may cause the entity to cease to continue as a going concern. I have nothing to report in these respects.

Responsibilities of the Authority and Accounting Officer for the financial statements

As explained more fully in the Statement of Accounting Officer’s Responsibilities, the Authority and the Accounting Officer are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view.

Auditor’s responsibilities for the audit of the financial statements

My responsibility is to audit and report on the financial statements in accordance with the Energy Act 2004.

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ISAs (UK), I exercise professional judgment and maintain professional scepticism throughout the audit. I also:

• identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;
• obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the group’s and the Nuclear Decommissioning Authority’s internal control;
• evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management;
• evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation; and
• obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. I am responsible for the direction, supervision and performance of the group audit. I remain solely responsible for my audit opinion.

I communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit.

In addition, I am required to obtain evidence sufficient to give reasonable assurance that the income and expenditure reported in the financial statements have been applied to the purposes intended by Parliament and the financial transactions conform to the authorities which govern them.

Other Information

The Authority and the Accounting Officer are responsible for the other information. The other information comprises information included in the annual report, other than the parts of the Accountability Report described in that report as having been audited, the financial statements and my auditor’s report thereon. My opinion on the financial statements does not cover the other information and I do not express any form of assurance conclusion thereon. In connection with my audit of the financial statements, my responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or my knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work I have performed, I conclude that there is a material misstatement of this other information, I am required to report that fact. I have nothing to report in this regard.

Opinion on other matters

In my opinion:

• the parts of the Accountability Report to be audited have been properly prepared in accordance with Secretary of State directions made under the Energy Act 2004;
• in the light of the knowledge and understanding of the group and the Authority and its environment obtained in the course of the audit, I have not identified any material misstatements in the Performance Report or the Accountability Report; and
• the information given in the Performance Report and the Accountability Report for the financial year for which the financial statements are prepared is consistent with the financial statements.

Matters on which I report by exception

I have nothing to report in respect of the following matters which I report to you if, in my opinion:

• adequate accounting records have not been kept or returns adequate for my audit have not been received from branches not visited by my staff; or
• the financial statements and the parts of the Accountability Report to be audited are not in agreement with the accounting records and returns; or
• I have not received all of the information and explanations I require for my audit; or
• the Governance Statement does not reflect compliance with HM Treasury’s guidance.

Gareth Davies
21 June 2019
Comptroller and Auditor General
National Audit Office
157-197 Buckingham Palace Road
Victoria
London
SW1W 9SP

ANNUAL ACCOUNTS

NDA financial statements 2018 to 2019

PERFORMANCE REPORT AND OTHER INFORMATION

Business performance

The following section gives a brief report on each of the NDA’s designated sites, grouped by the entity which holds the site operating licence. The section also reports on the performance of other businesses within the NDA estate, including wholly owned subsidiaries and our private decommissioning contracts. The reports cover progress towards key milestones and activities outlined in our 2018/21 Business Plan.

Key milestones and deliverables
Key milestones are agreed at the start of each financial year, against which progress is measured throughout the year. The milestones and activities listed for each site are taken from the 2018/21 NDA Business Plan and are grouped by strategic theme.

NDA Business performance

Summary of performance during 2018/19

Status	Description	Number of activities	Percentage %
Achieved	The key milestone or activity has been achieved during the financial year 2018/19 or satisfactory progress is being made towards achievement of longer term milestone.	11	7
On target	The key milestone or activity was due for completion after 31 March 2019 and as at that date was on track to be completed to schedule.	130	76
Behind target	The key milestone or activity was due for completion after 31 March 2019 and as at that date there had been a delay against the planned schedule.	14	8
Missed	The key milestone or activity was due for completion before 31 March 2019 and as at that date there had been a delay against the planned schedule and the target has been missed.	10	6
Deferred	Activity deferred due to re-prioritisation and/or reallocation of funding.	5	3

Updated cost and schedule information for major projects at sites can be found in Appendix C. More details about the performance of our sites and other businesses can be found in our NDA Performance Reports.

Glossary and abbreviations

• A&RAC Audit and Risk Assurance Committee
• AGR Advanced Gas-cooled Reactor
• BEIS Department for Business Energy and Industrial Strategy
• BEP Box Encapsulation Plant
• BEPPS-DIF Box Encapsulation Plant Production
• Store-Direct Import Facility
• C&AG Comptroller and Auditor General
• C&M Care and Maintenance
• CE Critical Enabler
• CETV Cash Equivalent Transfer Value
• CFP Cavendish Fluor Partnership
• CNC Civil Nuclear Constabulary
• CNPP Combined Nuclear Pension Plan
• CNS Civil Nuclear Security
• CSRP Cyber Security and Resilience Programme
• DMTR Dounreay Materials Test Reactor
• DRS Direct Rail Services Ltd
• DSRL Dounreay Site Restoration Ltd
• ED&I Equality, Diversity and Inclusion
• ExCo Executive Committee
• FED Fuel Element Debris
• FGMSP First Generations Magnox Storage Pond
• FReM Government Financial Reporting Manual
• GDF Geological Disposal Facility
• HAL Highly Active Liquor
• HAW Higher Activity Waste
• HEU Highly Enriched Uranium
• HMG Her Majesty’s Government
• HR Human Resources
• HSE Health and Safety Executive
• HSSSE Health, Safety, Security, Safeguards and Environment
• IAS International Accounting Standards
• IFRS International Financial Reporting Standards
• ILW Intermediate Level Waste
• INES International Nuclear and Radiological Event Scale
• INS International Nuclear Services Ltd
• ISF Interim Storage Facility
• LCF Legacy Cylinder Facility
• LINC Liaise, Innovate, Network, Collaborate
• LLW Low Level Waste
• LLWR Low Level Waste Repository Ltd
• LP&S Legacy Ponds and Silos
• LTIP Long-Term Incentive Plan
• LTP Lifetime Plan
• MOP9 Magnox Operating Plan 9
• MOX Mixed Oxide Fuel
• MSSS Magnox Swarf Storage Silo
• NAO National Audit Office
• NDA Nuclear Decommissioning Authority
• NDPB Non-Departmental Public Body
• NED Non-Executive Board Director
• NSSG Nuclear Skills Strategy Group
• ONR Office for Nuclear Regulation
• P&PC Programmes and Projects Committee
• PAC Public Accounts Committee
• PBO Parent Body Organisation
• PCM Plutonium Contaminated Material
• PCSPS Principal Civil Service Pension Scheme
• PFCS Pile Fuel Cladding Silo
• PFSP Pile Fuel Storage Pond
• PNTL Pacific Nuclear Transport Ltd
• PPP Programme and Projects Partners
• QPR Quarterly Performance Review
• R&D Research and Development
• REMCO Remuneration Committee
• RIDDOR Reporting of Injuries, Diseases and
• Dangerous Occurrences Regulations
• RWM Radioactive Waste Management Ltd
• S&R Security and Resilience
• S&SC Safety and Security Committee
• SDP Silos Direct encapsulation Plant
• SEP Silo Emptying Plant
• SFL Springfields Fuels Ltd
• SGHWR Steam Generating Heavy Water Reactor
• SIRO Senior Information Risk Owner
• SLC Site Licence Company
• SME Small and Medium-sized Enterprises
• SSEP Sellafield Security Enhancement Programme
• STEM Science, Technology, Engineering and Mathematics
• THORP Thermal Oxide Reprocessing Plant
• UKGI UK Government Investments
• UKNWM UK Nuclear Waste Management Ltd

Care and Maintenance	When a Magnox reactor site is kept in a state of Care and Maintenance, it is made safe for a planned period of quiescence, after which decommissioning activities will commence.
End State	Condition of a nuclear site (including the land, structures and infrastructure) following completion of decommissioning and clean-up activities, and any controls to be applied during its subsequent use.
Interim State	An interim state describes the condition of a site or facility (including land) at specific points en-route to the site end state. It is a natural milestone or decision point in the decommissioning and remediation programme that typically represents a significant reduction in risk or hazard. An interim state does not automatically infer a period of quiescence; it can be followed by continuous or deferred decommissioning.
Interim End State	An interim end state is a specific type of interim state. It marks the end of all physical works. No more active remediation will take place to achieve the site end state, i.e. further remediation will be passive for example as a consequence of radioactive decay or natural attenuation of contamination.
NDA Authority	This is used to describe the Non-Departmental Public Body created under the Energy Act and the performance of which is reported in this document.
NDA Estate	The 12 businesses that support the NDA mission – Sellafield, Magnox, Dounreay, LLWR, DRS, INS, RWM, NDA Archives, NDA Properties, Rutherford Indemnity, Springfield’s Fuels Ltd and URENCO Nuclear Stewardship Ltd.
NDA Group	This is the group of businesses included in the statutory accounts. These are NDA, Sellafield, INS, DRS, RWM, NDA Archives, NDA Properties and Rutherford Indemnity.
One NDA	A way of working more effectively and efficiently to maximise the opportunities within the group of businesses.

Useful links and documentation

• NDA Strategy - March 2016
• NDA Business Plan 2018 to 2021
• Mid-Year Performance Report 2018-2019
• NDA Corporate Centre: NDA: gender pay gap report and data 2018
• Register of Director’s Interests
• NDA Direct Research Portfolio (DRP) Projects 2018/19: Quarter four update
• NDA 5-year research and development plan 2019 to 2024
• NDA SME Action Plan 2019 to 2022
• Sellafield Ltd Transformation Plan

Contact details

NDA Headquarters
Herdus House
Westlakes Science and Technology Park
Moor Row
Cumbria
CA24 3HU
Contact: +44 (0)1925 802001
Visit: www.gov.uk/nda

London Office
10 Victoria Street
Westminster
London
SW1H 0NN

Harwell Office
Building 329 West
Thomson Avenue
Harwell Oxford
Didcot
Oxfordshire
OX11 0GD

Warrington Office
Hinton House
Birchwood Park Avenue
Risley
Warrington
WA3 6GR

Dounreay Office
D2003 – Zone 8
Dounreay
Thurso
Caithness
KW14 7TZ

Department of Business, Energy and Industrial Strategy
1 Victoria Street
London
SW1H 0ET

Principal Bankers
Government Banking Service
Wellesey Grove
Croydon
CR9 1WW

Auditor
The Comptroller and Auditor General
National Audit Office
157-197 Buckingham Palace Road
Victoria
London
SW1W 9SP

Appendices

Appendix A

Appendix A - Nuclear Provision

Appendix B

Appendix B - NDA Group - Summary of events confirmed as INES1 or higher during 2018/19

Appendix C

Appendix C - Major Projects Cost and Schedule