Policy paper

Index of responses from the government and the Nuclear Decommissioning Authority to the recommendations in both reports

Published 20 July 2021

Recommendations from Magnox Inquiry

See the Magnox Inquiry final report

Ref.	Recommendation from Magnox Inquiry	Summary	Gov	NDA
4.03	I recommend that BEIS takes overall responsibility for the implementation of those of my Recommendations that relate to the NDA and ensures that it has in place a system of regular and robust reporting from the NDA Board on how these are being implemented and managed by the NDA in practice.	Agreed - Ongoing	N/A
4.06	BEIS should promptly consider the scope of work that the NDA is accountable to deliver in light of the size and resources of the organisation, in comparison with industrial companies that are directly managing such complex and expensive programmes.	Agreed - Ongoing	p20
4.07	…should include questioning how the NDA manages its site licensing companies, including (a) whether the PBO/SLC model (where the NDA is essentially at least one step removed from the supplier in charge of delivery), can ever adequately manage the programme, and (b) whether risk can ever be adequately passed onto the supply chain.	Agreed - Ongoing	p21
4.08	Specific consideration should be given as to how, in any operating model that it puts in place, the NDA will ensure that it maintains both sufficient oversight and adequate quality assurance of the services and work performed by contractors and sub-contractors.	Agreed - Ongoing		p86
4.09	The review should also consider whether, and how, the NDA can attract and retain the world class expertise to be an ‘intelligent’ buyer of such services, and how this might be supplemented effectively with suitable external experts.	Agreed - Ongoing		p64
4.1	This review should be carried out in conjunction with, or as part of, any review undertaken as a result of the Public Accounts Committee Report: The Nuclear Decommissioning Authority’s Magnox Contract dated 28 February 2018.	Agreed - Complete	N/A
4.11	The outcome of the review should result in an action plan to be agreed with the Secretary of State.	Agreed - Complete	N/A
4.12	Following the review and drawing up of an agreed action plan in Recommendation 1, I recommend that the NDA should undertake and implement a root and branch review of its organisational structure, staffing levels, and competency, and develop and implement a plan to ensure it has in place a structure with suitably qualified and experienced resources at all levels to deliver its business plan. The review should include a critical evaluation of the skills and capabilities of relevant existing staff matched against the NDA’s current and future skill set requirements.	Agreed - Ongoing		p66
4.13	The NDA must, where necessary, supplement its own resources through the whole of the nuclear decommissioning procurement process with external expertise (which may include financial, technical and legal advice) to ensure that the best possible overall skill set is utilised. External providers should be encouraged to contribute widely to the successful accomplishment of the entirety of the procurement process, and thus to the success of the NDA.	Agreed - Complete		p67
4.14	The NDA should ensure there is an adequate diversity of background, training and experience of those individuals fulfilling leadership and other management roles within the organisation. This will help ensure that new ideas and best practices used in other industries can find fertile ground in the NDA, and encourage and support a more outward looking approach.	Agreed - Ongoing		p81
4.15	The NDA Board should at all times be confident that the CEO has in place an NDA Executive team with roles and accountabilities that are clear, appropriate and properly documented.	Agreed - Complete		p68
4.16	The commercial capability within the NDA has already been increased by the recruitment of a suitably experienced Commercial Director. Any future material changes to the scope and seniority of this role should be determined by the NDA Board and approved by BEIS.	Not agreed - Context Provided	p23
4.17	The role of General Counsel within the NDA should continue to be embedded at Executive level with the NDA Board agreeing the job description (and any material changes to it) for this role. As a minimum, the General Counsel shall attend Board meetings, and shall be the only Executive charged with reporting to the Board on any matters of legal risk. The General Counsel should oversee the internal legal team (which I recommend should increase its capacity and capabilities on complex procurement and contract management). External advisers, including legal advisers, should have an established route by which to escalate any concerns they may have arising out of their involvement or their advice. In appropriate circumstances, they should also have direct access at Board level.	Agreed - Complete		p115
4.19	The NDA Chair should be given delegated authority to decide on the mix of expertise required, and the appointment of Non-Executive Directors, to ensure that the NDA Board has a spread of expertise from within and outside the nuclear sector, which maps onto those areas of greatest risk and importance to the NDA.	Agreed		p45
4.2	The NDA (and BEIS) should focus on improving the operation of the NDA Board. The Chair should also ensure that the NDA Board is able to provide an effective challenge to the NDA Executive across the entirety of its business, and not just with a focus on Sellafield.	Agreed - Complete		p37
4.20.1	The Board should satisfy itself that accountability for delivery of all key objectives is clearly laid down, and that the resourcing and organisation plans are appropriate	Agreed - Complete		p38
4.20.2	SROs for major projects should personally provide regular updates to the Board	Agreed - Ongoing		p130
4.20.3	The Board should set up a subcommittee to provide stronger oversight of all projects and assurance activities, and ensure key pieces of assurance are presented directly to the subcommittee members.	Agreed - Complete		p39
4.21	The governance and management structure of the NDA ought to be streamlined and simplified. I recommend that BEIS should take a more active, direct role in overseeing the NDA, and that UKGI (acting on behalf of BEIS) should be removed from the day to day oversight of the NDA.	Under review	p12
4.22	UKGI should be called upon by BEIS to provide independent advice on its areas of expertise, in particular to review and advise periodically on governance arrangements. Any recommendations UKGI make must have teeth, and either be followed through, or formally rejected with written reasons by the NDA.	Under review	p12
4.23	Corporate performance objectives and appropriate key performance measures should be agreed by the BEIS Accounting Officer (Permanent Secretary), who should take an active role in managing the NDA against these measures on a quarterly basis. Formal quarterly reports on progress against these measures should be part of the regular information reviewed by the NDA Board.	Agreed - Ongoing	p15
4.24	In addition, I recommend that the NDA Chair must have annual performance objectives set by the Permanent Secretary, who should conduct a formal annual performance review of the Chair. The review should include feedback from the Senior Non-Executive Board Member, the Non-Executive Directors, and the NDA’s CEO.	Agreed - Complete	p16
4.25	I further recommend that the NDA CEO must have annual performance objectives set by the NDA Board, and a formal annual performance review conducted by the Chair, which should include input and feedback from the Senior Non-Executive Board Member and the Non-Executive Directors. The review should be formally documented, and sent to the Permanent Secretary.	Agreed - Complete		p41
4.26	In the second part of this section, I set out certain general recommendations which I consider relevant to all complex procurements being conducted by central Government and the wider public sector. The NDA Board should require the NDA Executive to demonstrate how its policies and procedures have responded, or will respond, to these recommendations in relation to future procurements.	Agreed - Complete		p106
4.27	In particular, as I recommended in my Interim Report, the NDA should devise a transparent, but simplified, set of competition rules, which focus on the substance of what it is looking for, rather than on process. Self-evidently this requires those responsible for devising and managing the procurement process to have a clear understanding of what they are trying to achieve, and how it will be effectively delivered.	Agreed - Complete		p107
4.28	The NDA should carefully consider its approach to ‘thresholds’, when these should be adopted and how they should be evaluated. Particular consideration should be given to the potential consequences (inclusive of the avoidance of unintended consequences) for a bidder not meeting a proposed threshold.	Agreed - Ongoing		p107
4.29	Prior to commencing further competitions, I recommend that the NDA should take all necessary steps to assure itself that the information presented to bidders is as complete and accurate as possible. Such assurance could come from appropriately qualified and experienced internal and/or external sources. This will help ensure that final tenders (and business cases) are put together on the basis of the best information available at the time and, in doing so, reduce the risk (which transpired with the Magnox Contract) of material cost escalation.	Agreed - Complete		p108
4.3	I further recommend that the evaluation criteria should be thoroughly tested through a range of different scenarios to ensure that they are workable, do not give rise to unintended consequences, and do indeed achieve the objectives of the NDA.	Agreed - Complete		p109
4.31	I also recommend the targeted use of challenge or peer reviews, whose terms of reference would be signed off by the NDA Board, and any lessons learned from the reviews would be the subject of appropriate follow up action.	Agreed - Complete		p109
4.32	Where risks of bidder challenge or other material bidder disputes are identified, the NDA must ensure that they are escalated appropriately, and considered at NDA Board level with the benefit of access to independent legal and commercial advice where necessary.	Agreed - Ongoing		p115
4.33	I recommend that the NDA should significantly enhance its own internal assurance resource, by ensuring that it has the right level capability and skills that can in turn be supplemented by external assurance of its activities. The NDA must ensure that the scope and limitations of internal and external assurance are clear upfront, and that where possible all assurance carries out sample checks, and goes beyond purely relying on interviews.	Agreed - Ongoing		p88
4.34	The NDA must develop annual assurance plans and programmes commensurate with its activities, and the risks to which they give rise. Assurance requirements must be specified in detail, and include a sufficiently broad scope of the activity or process to be assured. Reviews must ensure that themes can be identified, such that corrective actions and plans can be effectively developed.	Agreed - Complete		p90
4.35	A Board subcommittee should ensure that the full programme of assurance will cover the spectrum of possible risks. The mandate for the reviews should be to identify all reasons which might prevent a particular decision being taken, and senior management should consider and address all of those before proceeding. Thorough documentation of the relevant accountability, and the decision to proceed, must be a base requirement. External assurance should be forensic and thorough, and should stand on its own, that is, not be reliant on other assurance reviews for its conclusions.	Agreed - Complete		P92
4.37	The culture of an organisation is at the heart of what it and its employees do, and how they do it. The NDA has world class expertise in nuclear decommissioning, but needs to realise that ‘nuclear is not an island’, and that there is much to be learned from comparable sectors grappling with complex infrastructure and costly, long term commitments.	Agreed - Ongoing		p76
4.38	There has to be a change in culture in the NDA to ensure full and open dialogue, one that encourages challenge and embraces the delivery of ‘bad news’, and moves away from optimism bias. Individuals should be empowered to bring forward concerns, and a clear system of identifying the risks, combined with open discussion, should be integral to decision making, rather than pressing ahead in the belief that doing so accords with the particular leader’s wishes.	Agreed - Ongoing		p78
4.39	Assurance should be an aid to and support good decision making, not just a hurdle to be crossed.	Agreed - Ongoing		p93
4.4	I would encourage future CEOs to keep under review the need for an injection of external, competent personnel to be seeded in the organisation to help ensure it remains dynamic and high performing, and operates with sufficient regard to current industry best practices and processes. This must be underpinned by a strong system of accountability and reporting. Tools like an annual employee survey would help focus on whether an individual’s responsibilities and accountabilities are clear.	Agreed - Ongoing		p69
4.41	Procuring authorities should ensure that Boards or senior Departmental oversight bodies appoint a Non-Executive director (with a background in procurement) to advise on key decisions to be taken by the Board or equivalent body in relation to a complex procurement	Agreed - Complete	p32
4.42	Procuring authorities should consider the composition of the steering group/ body directly involved in oversight of a complex procurement. Care should be taken to ensure that that body has a majority of members who are not directly involved in delivery of the complex procurement itself.	Agreed - Complete	p32
4.43	Procuring authorities should embed appropriate involvement of senior executives with relevant responsibilities within any strategy for complex procurement from an early stage. This may avoid any subsequent perceived need to exclude senior input and oversight in order to ensure an untainted procurement process.	Agreed - Complete	p32
4.44	Procuring authorities must recognise that successful procurement is materially assisted by robust and effective contract management, which, in particular, should produce sufficient, accurate quality data. This enables both the procuring authority and bidders respectively to identify, offer and assess a sustainable and affordable delivery model and pricing structure.	Agreed - Complete	p33
4.45	Procuring authorities should clearly differentiate between items in their decision-making process which are compliance–related and pass/ fail, and those which are qualitative and go to the nature of the tendered proposals. A pass/ fail item should be just that i.e. an omission or mistake in a tender which is of such magnitude that the authority would want to have the ability to decline that tender	Agreed - Complete	p33
4.46	Procuring authorities should decide whether pass/ fail items are mandatory or discretionary. If the latter, there should be a documented decision-making process to ensure that any discretion is lawfully and defensibly exercised.	Agreed - Complete	p33
4.47	There should be clear business ownership of the award criteria with direct linkage to the procurement strategy.	Agreed - Complete	p34
4.48	The evaluation criteria should be scenario tested thoroughly to ensure that the desired business objectives are achieved, and that any unintended consequences are understood and dealt with.	Agreed - Complete	p34
4.49	Procuring authorities should keep contemporaneous records of dialogue meetings and share with bidders a record of any decisions reached or assurances given, which they may rely upon in their tenders. These do not have to be audio recordings.	Agreed - Complete	p34
4.5	Evaluators should understand that their written remarks and observations made during evaluation may be discoverable in the event of litigation. Subject to this, they should be permitted and encouraged to keep working notes so that they have an accurate record of their conclusions.	Agreed - Complete	p35
4.51	Evaluation may be and often is an iterative process. Procuring authorities should ensure that their processes allow for provisional scores to be arrived at, and that systems and records clearly denote what are provisional and final scores.	Agreed - Complete	p35
4.52	All evaluation processes should employ moderation to ensure consistency, and to ensure that evaluators have a common view of what good looks like.	Agreed - Complete	p35
4.53	Legal advisers should be asked to assess and report on legal/challenge risk and mitigations at the outset of a complex procurement, and to review this advice on a regular basis. Such advice should be addressed to the oversight body (not simply the individual directly leading the procurement) and should be provided in its own terms to ensure legal risk is accurately reported and legal privilege respected.	Agreed - Complete	p35
4.54	In the context of complex procurements where bidders may have invested many millions of pounds, procuring authorities should regard debrief interviews as a key part of the procurement process, not simply an administrative step (involving if necessary the SRO or CEO). Debrief interviews provide a significant and genuine opportunity to listen to bidders, and to mitigate concerns/risk of challenge.	Agreed - Complete	p36
4.55	The relevant authority must seek legal advice on the merits, cost and timeframe for the dispute, and weigh those considerations against the prospect and size of any formal claim. It must articulate and regularly review its commercial and legal strategy in the light of material developments (for and against) which fundamentally will be whether to defend or settle the dispute.	Agreed - Complete	p36
4.56	Where the dispute involves policy considerations, carries reputational risk and/or a material cost risk, the sponsoring Department (in the case of an arm’s length body) and Cabinet Office should be consulted. Their views on those matters should also be weighed carefully in the balance when devising - and revising - the commercial and litigation strategy.	Agreed - Ongoing	p37
4.57	In my view, using the same law firm in litigation as has advised on a procurement should not be considered automatic. I recommend that the decision on legal representation, once legal proceedings have been brought, should be taken only after the fullest consideration of all potential implications, and should also be formally sanctioned at senior management level.	Agreed - Complete	p38
4.58	Wider Government should review the approach it takes to public procurement litigation generally. Although a sub-species of public law litigation, this should not disguise the fact that many issues underlying public procurement litigation are comparable to those within complex commercial litigation. This accentuates the need to adopt a consciously more commercial approach to the assessment and quantification of the relevant costs and risks involved.	Agreed - Ongoing	p38
4.59	Cabinet Office, with input from the Government Legal Department, should put in place suitable procedures to capture key lessons learned and best practice in the conduct of procurement litigation on an ongoing basis, and ensure these are shared across Government and the broader public sector, given the financial and wider reputational impact of such cases.	Agreed - Complete	p38
4.6	I am aware that the IPA is developing improvement plans, and in this connection I recommend it should focus on fewer but deeper reviews for high risk, high complexity projects only. Reports by the IPA should be presented to the board or relevant subcommittee of the organisation, and should be clear and upfront about exclusions, and thus leave no doubt about areas where no assurance can be given.	Agreed - Ongoing	p26
4.61	In light of the recommendation in the preceding paragraph, the IPA ought to undertake a skills and capability assessment of all IPA reviewers, and formally document and regularly audit the competence and capability, skills and experience required, before assigning reviewers to particular reviews.	Agreed - Ongoing	p27
4.62	The IPA should clearly state the purpose of each review, and identify the prime ‘customer’ of any review (e.g. the SRO, the CEO or possibly the full board of an organisation). It should make it clear what actions should be taken as a result of the review.	Agreed - Complete	p27

Departmental Review into the NDA

See the Departmental Review into the NDA

Ref	Recommendation	Summary	Gov.	NDA
1	The NDA should work with government to ensure that the formally agreed definition of “value for money” as applied to nuclear decommissioning is clearly communicated and used consistently by all parties.	Agreed - Ongoing		p28
2	BEIS should consider how it can work with the NDA to help it measure and evaluate: (i) the impact of its socio-economic activities, including the benefits to the delivery of the NDA’s core mission; and (ii) NDA’s net zero targets; ensuring that the overall strategic approach aligns with wider socio-economic priorities as well as the Energy Act requirements, and are given the right level of challenge and support by central government.	Agreed - Ongoing	p39
3	The NDA should maintain its current approach of pursuing active collaboration with overseas partners, including supporting international promotion of the UK supply chain, and where appropriate, and by agreement with BEIS, supporting broader UK interests. It should be able to demonstrate that none of these activities impact negatively upon, or distract the NDA from, its core mission. We recommend that the government periodically review how effectively these arrangements are working.	Agreed - Ongoing		p55
4	The NDA Board should keep under regular review, the appropriate balance between core clean-up and decommissioning and pursuing new commercial opportunities to secure additional revenue on the other, and report its findings to BEIS, who may then wish to give the NDA a clearer steer as to the desired policy outcome. This should consider: the skills, expertise and capacity available to the NDA; the level of additional risk any new commercial activity would create for the Government; the extent to which the Board and executive team would be able to dedicate appropriate oversight and control to such activity; and the direct and indirect opportunities it might create for the delivery of the core mission.	Agreed - Ongoing		p56
5	BEIS and UKGI should consider ways of simplifying the current multi-channel engagement with – and therefore reducing unnecessary transactional burdens on - the NDA.	Agreed - Ongoing	p13
6	BEIS and UKGI should carefully consider succession plans in place to mitigate the risks to the good working relationship with the NDA associated with the turnover of key staff; and that BEIS and the NDA work together to develop a light-touch process to enable staff in both organisations to spend time working in one another’s teams, either through work shadowing or secondments, in order both to create a stronger sense of shared context, and to develop a practical understanding of one each other’s roles and the challenges they face.	Agreed - Ongoing		p31
7	The Framework Document should be kept under regular review, and formally updated to a frequency set by BEIS/UKGI, at least every two years.	Partially agree, context above - Ongoing	p18
8	The department and the NDA should consider how to facilitate more frequent and more direct conversations on matters of strategy and policy implementation. This could be led by the Chair. This would allow on the one hand the Secretary of State and junior ministers to share their priorities, insights, and expectations of the NDA, referencing their wider policy and delivery vision as appropriate, and on the other give the NDA a forum to explain both their progress and surface any challenges they wish to bring to ministers’ attention.	Agreed - Ongoing	p14
9	BEIS and UKGI should establish a clearer, more transparent mechanism for identifying those NDA top-level risks that merit formal reporting to BEIS’ Performance and Risk Committee, and to the BEIS Director General.	Agreed - Ongoing	p26
10	The revised Framework Agreement should make clear that all of the NDA’s wholly-owned subsidiaries should work towards full disclosure of salaries above the normal transparency threshold for publication, from a point in time agreed between the NDA and BEIS to allow the necessary time to implement, recognising that there may be contractual or other legal matters to resolve before doing so. In addition, Government should introduce a group-level pay control total, agreeing the total number of staff that may be paid above a certain threshold across all of the NDA’s subsidiaries, with the corporate centre working with the subsidiaries to allocate the roles, and Government reviewing the effectiveness of this change every year.	Agreed - Ongoing	p19
11	As the NDA consolidates its understanding and management of its businesses and sites, and drives up the quality of its own performance management, Government should actively consider ways of easing the impact of the scrutiny it applies. This is likely to be over a period of several years. For example setting higher levels of delegated authority for sanctioning of projects and programmes, in recognition of measurable progress made by NDA in developing transparent, comparable management and financial information from all Group businesses.	Agreed - Ongoing	p16
12	Board Effectiveness Reviews should take place at a frequency in line with current best practice (i.e. an externally facilitated review every three years, and an internal review annually). BEIS and UKGI should work with the Chair to set the terms for a skills audit to complement the externally facilitated Board Effectiveness Review in order to assess whether the Board has the right mix of skills given the evolving nature of the group model and the merits of recruiting further additional nuclear expertise. The outcome of the Board Effectiveness Review and the skills audit should be shared in writing with BEIS / UKGI.	Agreed - Ongoing	p24
13	NDA should present Government with costed and evidenced options for the streamlining of the Group. This should include: (i) potential savings to the public purse of reducing the number of boards, (ii) justifying the presence of non-executive directors on those boards that are retained; (iii) achieving savings from merging functions, and demonstrating to the satisfaction of the ONR that such reform comes without risk to existing safety and security obligations.	Agreed - Ongoing		p46
14	In order to demonstrate their continued value to the NDA group, and test whether the same level of service could be provided by the private sector at lower cost and / or more effectively and without additional risk, NDA should review the transport solutions that are likely to be required to deliver the mission over the coming years and consider make/buy options in line with operational requirements, value for money and the risk profile. The Board should ask for a first pass on this within two years and regularly thereafter.	Agreed - Ongoing		p48
15	NDA should look carefully at the staffing structure in the corporate centre with a view to rooting out any inefficiencies created by unnecessary shadowing of subsidiaries and providing a clear and transparent explanation of the roles and value provided by every team in the corporate centre.	Agreed - Ongoing		p49
16	The NDA should carry out a fundamental review of the distinct accountabilities and responsibilities of the subsidiaries, relative to those of the NDA Corporate Centre, to ensure boundaries are clear and subsidiary boards have an appropriate remit. The implications for regulatory accountabilities of the subsidiaries of any changes proposed will need to be fully understood by the relevant regulators, and where necessary formally approved by them. When reviewing the remit of subsidiary boards, a single group wide Remuneration Committee should be considered, to ensure more visible consistency with senior pay controls as agreed with government.	Agreed - Ongoing		p50
17	As the proposed creation of the Group Leadership team evolves, The Infrastructure and Projects Authority should work closely with the NDA to realise the opportunities for more appropriate designation of SROs for NDA projects on the Government’s Major Projects Portfolio, including considering the designation of senior members of the subsidiary executive teams to ensure formal accountabilities are sited at the right level.	Agreed - Ongoing		p128
18	BEIS should review how its business case approvals mechanisms, including the PIC, can complement the NDA’s assurance process rather than replicating it. BEIS and NDA should consider seconding staff into the Corporate Centre and/or a Site Licence Company to provide enhanced capability on the drafting of business cases.	Agreed		P51
19	We recommend that the NDA produce clearly defined terms of reference for each layer of governance in the business case approvals and sanctions process that explains the roles and responsibilities of each and highlights their additive value. Unnecessary layers should be removed. Additionally, IPA should consider formally assessing NDA’s PPM capability with a view to offering advice and support as it enhances it.	Agreed	p29	p129
20	As part of the improvement plan being developed to raise the NDA’s Equality, Diversity and Inclusion standards, we recommend that NDA review the availability, promotion and effectiveness of formal mechanisms for workers in all parts of the Group to raise concerns about bullying, harassment and discrimination in the workplace, including provision of whistleblowing helplines.	Agreed - Ongoing		p83
21	The NDA should consider what changes to the workforce structures and ways of working adopted the Covid pandemic could become permanent features. Additionally, the NDA should work with its businesses to agree where there is scope for further workforce efficiencies given the likely increase in home-working.	Agreed - Ongoing		p120
22	Given the changing business model which now sees the corporate centre’s commercial role more focused on assurance of the commercial activities of its subsidiaries, we recommend that the NDA keep under careful review the range of core skills and competencies in the centre, as well as those of the subsidiaries’ commercial teams. This should include a mechanism for giving BEIS assurance on subsidiaries’ understanding of and compliance with all relevant public sector procurement rules and standards.	Agreed - Ongoing		p61
23	The NDA should continue its drive to improve and standardise financial reporting by the subsidiaries, in order to create, as soon as possible, a fully-functional Integrated Financial Reporting Framework to give the NDA Board full confidence in the corporate centre’s ability to allocate, prioritise and monitor spend across the whole group.	Agreed - Ongoing		p124