Nuclear Decommissioning Urgent Question House of Commons

Thank you, Mr Speaker. I'd like to ask the Secretary of State for

business, energy and industrial strategy if he will make a statement

on the nuclear decommissioning authority's early contract

termination at the Mike estate. The Secretary of State for business,

energy and industrial strategy. This morning I informed the House

that the nuclear decommissioning authority has terminated its

contract with the Cavendish floor partnership for the decommissioning

of 12 redundant Magnox sites. The MDA ran a ?1.6 billion tender

process from April 2012 which resulted in a 14 year contracts

being awarded in September 2014 to the partnership, a joint-venture

between the British-born Cavendish Nuclear and Floor Incorporated. They

started a consolidation process to ensure that the scope of the 2012

tender matched the actual status of the commission. It became clear that

there is a significant mismatch between the work tended for and the

actual scale of the work that is required to be carried out. The MDA

board concluded that it should terminate the contract in two years'

notice. Termination was made with the agreement of CFP, and has no

reflection on their performance. Dealing safely with the UK's nuclear

legacy is fundamental. Decommissioning work will continue

for a further 2.5 years. The MDA will establish the placements for a

structure to be put in place when the current structure ends. The MDA

has also settled outstanding claims against it by Energy Solutions in

relation to the 2014 Magnox contract. The MDA was found by the

High Court to have wrongly decided the outcome of the procurement

process. It is clear that the 2012 tender process was deeply flawed.

The MDA has agreed settlement payments with Energy Solutions of

?26.5 million, plus 8.5 million of costs. And with Bectel,

approximately ?12.5 million in total. These are very substantial

costs which could have risen further if the case had proceeded. Tax must

be able to be confident that public bodies are operating effectively and

securing value for money. Where this has not been achieved, such body

should be subject to rigorous scrutiny. I've therefore established

an independent enquiry into the original procurement process and why

the 2014 contract proved unsustainable. These are separate

issues that need to be examined thoroughly. I've asked Mr Steve

Holliday, former chief executive of National Grid, to lead this enquiry.

The enquiry will take a cradle to grave approach beginning with the

MDA's procurement and ending with the contract termination. The

enquiry will set out the lessons learned and recommend any further

action it sees fit, including any disciplinary investigations or

proceedings that may be appropriate. The enquiry will report jointly to

me and to the Cabinet Secretary, and his report will be available to this

house and to the select committee. Mr Speaker, this was a defective

procurement with significant financial consequences, and I'm

determined that the lessons to be learned should be exposed and

understood. But those responsible should be properly held to account,

and that it should never happen again. Bakun Bailey. The MDA has

withdrawn an appeal against the judgment handed down in late July

last year. Comey secretary therefore confirm why this decision has been

taken now? Why the matter was brought to appeal in the first

instance? The whether both actions were indeed sanctioned by the

Secretary, or indeed his predecessor. The Government

concerned that the MDA had not acted properly in the tender process and

that the MDA was acutely aware that unsuccessful bidder might challenge

the outcome of the competition. The court also stated that the NBA had

published -- the court stated that the MDA had fudged the report to

achieve a particular outcome. What's also more worrying is that the MDA

attempted to get rid of information that might have been detrimental to

it, including reference to shredding notes. Given the serious nature of

the judgment, will the Secretary of State assure the House that work

there will be full public disclosure, and a public hearing.

Does the secretary also agreed that the future operation of the MDA has

been called into question as a result of this case? And will he

confirm what structural changes are necessary, and when? Can he offer

any assurances to workers in Magnox going forward? And finally the

secretary's written statement confirms that it has become clear to

the MDA that there is significantly a mismatch between the work

specified in the contract as tended in 2012. Can be secretary therefore

confirm when he or his predecessor was first aware of this mismatch,

and whether this would have been apparent from the work already being

carried out by previous contractors? Thank you, Mr Speaker. The

honourable lady is quite right to ask the question and I hope she will

agree that the written statement I made today is thorough and

comprehensive. I'm very happy to have conversations with her and the

select committee over the weeks and months ahead. She asked some

specific questions about both the termination of the contract and the

litigation. In terms of the litigation, there was indeed a

hearing at the court in July. There was another one in December. On the

1st of March of this year, a few weeks ago, a new chief executive and

chair of the MDA took office. It seems to me appropriate that a new

set of eyes should consider these matters, and a course of action,

rather than those people who were responsible and involved in the

procurement exercise. In answer to your question, it was a decision for

the MDA board, that is how it is constitutionally established. But

its decision required ratification by me, by the Chief Secretary to the

Treasury, and by the accounting officer in my department. She raises

some very important questions about the conduct of the original

procurement, and mismanagement. This is exactly why it seems to me we

need to have an independent figure, independent of government and the

MDA, to report to this house, and also the Cabinet Secretary. Not only

to learn the lessons to make sure that things cannot happen again, but

if there is a fault and an error has been made, then the recommendation

of disciplinary action can follow from that. She quite rightly raises

the question of the Magnox workforce. For whom this will be a

difficult day. She should, and I'm happy to confirm to the House, that

there is no question of the good performance, operationally, of the

contract. It was the question of the terms of letting the contract. Good

progress has been made. The workforce that is employed in the

decommissioning contract will continue as planned. And when the

report is made available, lessons will be learned about the structure

of the MDA, as well as any particular procedural aspects. Mr

John Whittingdale. Will my right honourable friend and join me in

paying tribute to the workforce in my constituency who are doing a

magnificent job in decommissioning that power station. Will he confirm

that nothing will prevent that work going forward? That will he also

listen to their real concerns about the effect on their pension

entitlements with changes made with regard to the cap on exit payments?

I certainly join him in paying tribute to the workforce there. Good

progress has been made, as he will be aware, improbable, in terms of

decommissioning the site there. With the underground waste vaults

containing intermediate level waste having been cleared and

decontaminated. That is a reflection of the hard work there. In terms of

the pension arrangements, there is a separate agreementth consultation

and discussion going on surrounding that which is not related to today's

announcement. Mr Speaker, I thank the Minister for his response and

the shadow Secretary for securing the subject question. This debacle

shows that the UK Government cannot even manage its nuclear project,

which comes at great cost to the taxpayer, leaving its case for

nuclear energy future more threadbare than ever. When we take

into account the bizarre and illogical decision to leave Euratom,

we are right to be concerned and to seek reassurances that uncertainty

over the future of decommissioning will not lead to stand is

deteriorating. What assurance Comey secretary give today? This should be

a wake-up call. The UK Government's nuclear obsession will do nothing to

lower energy bills and will only bird in the next generation with

unprecedented economic environmental and security instability and risk.

The Tories should do the responsible thing and scrap the nuclear

obsession in favour of investment in renewable energy and carbon capture

technology. Scottish renewables recently reported that one in six

renewable energy jobs in Scotland is under threat in the next year. Will

the Government acknowledged that its energy policies need to be reviewed

to allow the Scottish Government to continue with its competent and

ambitious vision of a prosperous, green future? And finally when can

we expect full details of the timetable of this investigation into

this matter? Well, I would say to the honourable

lady that humility might be appropriate here because the

Scottish Government's provided oversight to this procurement as

part of the competition programme board and I'm sure that the lessons

to be learned will apply to the Government in Scotland as well

between 2012 and 2014. I am sure the people of Scotland as well as those

of the whole of the United Kingdom, whatever their view of the future of

nuclear power, would want the existing nuclear power stations to

be decommissioned safely and to have arrangements in place so that that

could be done reliably. In terms of the payment review, which I hope she

welcomes, I have asked Mr Holliday to give some interim findings by

October of this year so that it can inform the further decisions. Thank

you, Mr Speaker. I am sure that my Right Honourable friend will pay no

attention whatsoever to the bizarre protestations of the SNP spokesman

but I hope in asking Steve Holliday personally and we all have very

considerable confidence to do this review, he will seek to bring the

review itself to a final conclusion reasonably soon after the interim

report in October so that we can actually get to the bottom of this

and make sure as he rightly says that this does not repeat itself in

future years. I agree. I think it is important quickly to learn the

lessons and to apply them. This is very important work. The work has

been and is being carried out to a high standard but those lessons need

to be learned and need to be applied. May I thank the Secretary

of State for his courtesy call to me on this matter this morning and the

subsequent letter. The Select Committee will challenge and work

constructively with him and Steve Holliday on this important issue.

Will he clarify whether the enquiry will be confined to the procurement

process which led to this specific contract will consider other

contracts such as that to decommission Dounreay with the same

company that won the Magnox contract and will be enquiry be broad enough

to consider whether the arrangements have always been and will continue

to be fit for purpose? I am grateful to the chairman of the Select

Committee for what he said. I can confirm what he said which is that

the management arrangements are very much in scope. I have the terms of

reference and put them first thing this morning into the library of

both houses of parliament. It is open to Mr Holliday to go where the

evidence takes him, to use the phrase on this. The particular

concern is about this contract, but if he feels that he needs to look at

other aspects of the management, years absolutely free to do so.

Thank you. I welcome the characteristic candour and openness

with which the Secretary of State has approached this is you. Can he

reassure me and the house that in the contracts -- context of the

scope of this enquiry, not only will it look at the NDA but also looking

at the role of any of the UK Government departments at the

Scottish Government in this process as well. I will indeed. The terms of

reference which are available and will be published this morning make

it very clear that it applies to the NDA and two Government departments

as well and that is absolutely right and proper and from the beginning of

the procurement in 2012 to the conclusion of the litigation and

determination of contract. Under current plans, the power station

will lose most of its jobs in under ten years. The Government has

committed to continuous decommissioning as recommended by

the Welsh affairs Select Committee. Well he published plans and will he

agreed to meet with me to discuss the future? I will certainly meet

with the honourable lady and I am glad she has given me the

opportunity to emphasise that the work will continue but all of the

sites as planned and I think she will know that the work is ahead of

schedule in the plant that she mentions, but in the light of it

being ahead of schedule, I will meet with her to update on the latest

timetable. Thank you, Mr Speaker. This was clearly a defective

procurement with quite serious financial consequences. And I

welcome the Secretary of State's determination that the reasons for

it will be exposed. But will he assure this house that where people

are found to be responsible or at fault, they will be brought to

account? Mr Speaker, I can confirm to my honourable friend that the

terms of reference are very clear that the enquiry can make any

recommendations it sees fit, including as to any disciplinary

investigations or proceedings that may in its view be appropriate as a

result of these findings. Thank you, Mr Speaker. Goody Secretary of State

please confirm that the thousands of people waiting for an outcome on

their pensions will not be ripped off? Yes, Mr Speaker. There have

been constructive discussions with the representatives of the

workforce. They are continuing, the consultation continues and of course

we want to bring them to a satisfactory conclusion. The NDA

settlement payments are very substantial. Can my Right Honourable

friend confirm that whilst these payments were made without accepting

liability that the cost has potential to rise much further, had

they gone to court? My honourable friend is absolutely right. We have

a duty to consider the further risks to public money, which is why it

might accounting officer and the Chief Secretary to the Treasury and

I, on advice, accepted is, that however painful it is an these are

very significant sums of money as my honourable friend said, that we

should be preventing those sums of money being even greater. Given the

cost problems with this NDA decommissioning Magnox contract, how

can they Secretary of State have any confidence whatsoever in the cost

figures for Hinkley point which will itself need decommissioning,

especially giving the farce of the massive cost overruns and huge time

delays in building the EDF sister reactors in Finland and Normandy,

neither of which has opened years later, massively cost overrun? This

is about a procurement process that was wrongly specified around

decommissioning, not against the built costs of a future reactor. But

when we have the other reports of Steve Holliday, if there are wider

lessons for the industry, then we will be sure to take them. There is

much that all public sector organisations can learn from the

procurement process and public - private initiatives, as the amount

of money spent by the NHS on PS I will attest. We'll be Secretary of

State assure me that all departments will be given the opportunity to

learn best practice from this review? I think it is important

whether such a serious set of consequences to public money that

the conclusion should be publicly available, available to the south

and including four other Government departments if they would want to

reflect on it. Cannily Secretary of State confirm the holiday enquiry

will have reached its final conclusions and issued its final

report in time for any lessons to be learnt, to be taken into account

before the new contract process begins? What I would say to my

honourable friend is that one of the reasons I asked Mr Holliday to make

a report by October so that that can happen. I will meet with him in the

coming days, as he sets out the scope and timetable, but that is one

of the key reasons for the report and I'm sure he will want to make

his recommendations available for the new process. What were the terms

of the payoff? He has not mentioned it. I have mentioned the settlement.

It is nearly ?100 million for the settlement of the litigation and the

Chief Executive of the NDA has come to the end of his contract.