Bosses at the UK's most complex and challenging nuclear site decided to scrap HM Treasury-agreed plans to shrink staff numbers by more than 20% because of safety fears, a National Audit Office report has revealed.
Sellafield committed to reduce the number of people it employs from 11,600 to 9,100 over the course of a decade as part of its 2021 Spending Review settlement, with "more efficient working" expected to be part of the solution.
However a new report from the NAO says that last year Sellafield's board decided that addressing workforce capability needed to be prioritised ahead of SR21 commitments because previous operating plans were "not credible".
The finding is one of a litany of problems facing the Cumbria facility, which is tasked with storing spent nuclear fuels from power stations across the UK. Other issues include "ongoing concerns" over project management and the pace of delivery.
Sellafield is owned by the Nuclear Decommissioning Authority, an executive non-departmental body sponsored by the Department for Energy Security and Net Zero.
According to the NAO, Sellafield's board decided to U-turn on its headcount reduction commitment in October last year in the wake of "serious concerns" about the "diminishing capability" of the workforce to safely operate facilities and maintain assets.
"The board decided to increase the authorised headcount from 11,200 to 12,000," the NAO said. "It did not discuss this with HM Treasury – even though this decision meant that Sellafield was no longer trying to achieve its SR21 commitment."
The report said that Sellafield's SR21 commitment, which would have required headcount to drop from 11,600 to 9,100 by 2031, could not have been achieved by existing change programmes. It added that Sellafield had not developed a workforce plan that demonstrated it was on course to achieve the 2,500 reduction in staff numbers, or that the target could have been achieved without "negative consequences" for the site.
The NAO said the safety-assurance team's 2022 concerns were focused on a feeling that the site was "becoming increasingly unsafe" because of a weakening of "barriers" that collectively served to prevent serious accidents.
"The factors they identified included the deteriorating condition of assets and inadequate numbers of suitably trained staff," the report said.
The report added that buildings at Sellafield frequently had to be shut down because there were not enough people available to operate them safely – something that had been a "very rare occurrence" before the Covid-19 pandemic, but which had since become "normalised".
Sellafield is now developing a new approach to strategic workforce planning to support future decisions, including how it responds to higher turnover.
A third of Sellafield's workforce will be eligible to retire in the next 10 years, but there is increased demand for military and civilian nuclear projects. The NAO said projections from the Nuclear Skills Delivery Group indicated that the sector as a whole would need to hire 40,000 additional staff by 2030 – doubling the current recruitment rate.
The NDA told Civil Service World that it had invested heavily in strengthening the capability and capacity of its teams over the past 12 months because it had prioritised "ensuring we have the right number of people to maintain the safe operation of the site at all times".
"Not achieving value for money"
NAO head Gareth Davies said the latest deep dive had found areas of improvement since 2018, when the organisation last reported on Sellafield. But he said performance on some major projects was still heading in the wrong direction.
"The NDA needs to build new facilities to treat and store different types of nuclear waste, while maintaining ageing facilities and associated infrastructure until they can be decommissioned," Davies said.
"Despite progress achieved since the NAO last reported, I cannot conclude Sellafield is achieving value for money yet, as large projects are being delivered later than planned and at higher cost, alongside slower progress in reducing multiple risks.
"Continued underperformance will mean the cost of decommissioning will increase considerably, and ‘intolerable risks’ will persist for longer."
Among its recommendations, the NAO said the NDA should work with DESNZ and HM Treasury to consider what benefits longer-term financial settlements could bring for Sellafield.
NDA group chief-executive officer David Peattie said the report recognised progress over the past six years.
"Sellafield is one of the most complex environmental programmes in the world," he said. "We’re proud of our workforce and achievements being made, including the unprecedented retrieval of legacy waste from all four highest hazard facilities.
"But, as the NAO rightly points out, there is still more to be done. This includes better demonstrating we are delivering value for money and the wider significant societal and economic benefits through jobs, the supply chain, and community investments."
A DESNZ spokesperson said the NDA and Sellafield had made "significant progress" with managing large volumes of waste and improving organisational culture.
"Managing the nation’s nuclear legacy is a hugely important mission and that’s why we will work closely with them to ensure value for money and hold them to account,” they said.
Decommissioning costs now set to hit £136bn
The NAO update on Sellafield found that projections for the total cost of decommissioning the site have now risen to £136bn, reflected in 2023-24 prices. The figure is up £21.4bn on the 2019 estimate – after adjusting for inflation.
According to the NAO, the increases are down to the identification of new risks, stretched expectations of the time that projects will take, and "more realistic assumptions" about future efficiency savings. The Nuclear Decommissioning Authority currently expects all buildings on site at Sellafield to have been demolished by 2125.
The report says that while Sellafield has been able to demonstrate that it can safely remove the most hazardous material stored on the site from ageing buildings, deemed by the NDA to pose an "intolerable risk", progress is problematically slow. One such "intolerable risk" structure is the Magnox Swarf Storage Silo, which leaks 2,100 litres of contaminated water every day.
The NAO said facilities used to treat nuclear waste on the site could reach the end of their useful lives before all of the waste that needs to be treated has been retrieved. It said milestones for substantially emptying three legacy ponds and silos had been pushed back by up to 13 years compared with plans from 2018.
According to the report, one area of particular concern are Sellafield's 70-year-old sample analysis facilities, which are described as being "vital" to the site's safe-running but also "in extremely poor condition". The NAO said Sellafield had spent more than seven years and £265m on a project to refurbish another building to replace the analysis facilities, but the project was paused earlier this year because of escalating costs and the expectation that the facility would not be ready until several years after it is needed. A decision on how to proceed is expected in December.
Staff bonus error costs £2.1m
Elsewhere, the report found that Sellafield had overpaid its employees by a total of £2.1m because it miscalculated bonus payments for 2022-23. The NAO said senior management had chosen to treat one missed target as if it had been met and excluded another missed target from its assessment of how well the organisation had performed in the year. The bonus paid to staff, equating to around £200 per person, was not reduced as a result.
According to the NAO report, non-executive directors and the NDA "raised objections" to the approach, but the bonus payment was made before the issue was resolved.