Nuclear Decommissioning Authority Annual Report and Accounts 2020/21

HC 437 NDA Annual Report and Accounts 2020/21 NDA Annual Report and Accounts 2020/21

Nuclear Decommissioning Authority

Annual Report and Accounts 2020/21

Report presented to Parliament pursuant to Section 14 (6) of the Energy Act 2004 and Accounts presented to Parliament pursuant to Section 26 (10) of the Energy Act 2004.

Report laid before the Scottish Parliament pursuant to Section 14 (8) of the Energy Act 2004 and Accounts laid before the Scottish Parliament pursuant to Section 26 (11) of the Energy Act 2004.

Ordered by the House of Commons to be printed on 20 July 2021

HC 437 SG/2021/145

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© Nuclear Decommissioning Authority copyright 2021

This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit nationalarchives.gov. uk/doc/open-government-licence/version/3. Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned. This publication is available at www.gov.uk/official-documents. Any enquiries regarding this publication should be sent to us at: Nuclear Decommissioning Authority, Herdus House, Westlakes Science and Technology Park, Moor Row, Cumbria, CA24 3HU

978-1-5286-2777-1 CCS0621829302 07/21

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Contents Chair’s Overview of 10 statement 8 performance Overview of Performance

10 Chair’s statement 14 Group Chief Executive’s statement 18 Financial review 20 The NDA and our mission 22 The NDA group 2019/20 Highlights: 24 How we’re organised Site Decommissioning 26 Our strategic approach and themes and Remediation 28 Our driving themes and strategic outcomes 38 Our critical enablers Our strategic 26 approach and themes Accountability Report

52 Directors’ Report 54 Section 172 statement 56 Statement of Accounting Officer’s responsibilities 57 Governance statement 28 86 Remuneration report Our driving 92 People report themes and strategic 101 Health, safety, security, environment and wellbeing report outcomes 107 Financial summary 2020/21 110 Nuclear provision 112 Parliamentary accountability disclosures 114 The audit report of the Comptroller and Auditor General to the House of Parliament Annual Accounts Our critical 117 Annual accounts 38enablers Performance Analysis and other information

166 Performance analysis 196 Glossary and abbreviations 198 Useful links and documentation 199 Contact details 200 Appendix A - NDA group - summary of events confirmed as INES1 or higher during 2020/21 201 Appendix B - Major Projects Cost and Schedule Performance 166 analysis

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Overview of performance 2020/21

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unprecedented circumstances for organisations for people and the environment, has remained the the world over. The NDA is no exception. Our same, despite the challenges of COVID-19. businesses, stakeholders, employees and their Taking on a new direction as an all-encompassing families have all been affected. Our focus has group of nuclear decommissioning companies, been to provide unwavering support for our we have fully embraced a ‘One NDA’ approach employees’ wellbeing during such difficult times. to maximise the benefits of working together in a This has been a constant priority, recognising the more focused and integrated way. This approach effects on mental health and the issues faced by will bring greater benefits in the pursuit of our those working from home and in isolation. Equally, mission and greater value to the taxpayer. Chair’s statement we have recognised the very different challenges that those who have continued to run our sites This year we have continued to make progress as Dr Ros Rivaz throughout the pandemic have experienced. we have adapted ways of working, and the lessons learned during the pandemic are being evaluated, Throughout this crisis, individuals, groups and shared and embedded in our new way of working. communities have found ways to adapt, perform Since joining the Nuclear for his contribution and his support to me as I essential duties and above all stay safe. For The developments over the last few years leading transitioned into this role. I am also pleased to the NDA, this applies to our many employees to the new group operating model present an Decommissioning Authority welcome Professor Francis Livens to the Board. and stakeholders, both at work and within the opportunity for the next stage of efficient delivery (NDA) in September, I have had Francis brings a depth and breadth of nuclear communities surrounding our sites. Our employees across the NDA estate. In the future, we will expertise, which will assist us as we continue to across the group adapted very quickly to the share skills, learning and best practice, to deliver the privilege of seeing how we steer our mission. I am keen to take the opportunity evolving reality of our need to pause non-essential more integrated approaches to the nuclear to thank Michelle Heath for her contribution to the work programmes at sites, working from home decommissioning challenge. Our Mission Delivery are successfully dealing with some Board and wish her well with her new venture. where possible and ensuring we had COVID-secure Progress communications, publicly available, of the world’s most complex workplaces at sites and offices where essential work are widely circulated and our revised Strategy, When I joined the Board, it was clear the NDA and continued. meeting the requirements of the Energy Act 2004, nuclear decommissioning. its group had been set on a new trajectory under was extensively consulted upon and endorsed David Peattie’s leadership as CEO, moving towards There was significant uncertainty and in the year before publication. Our commitment a collaborative way of working with shared goals, This work is of vital national importance and, in unpredictability during 2020/21. In many ways, this to openness and transparency sees us engage instead of one dominated by commercial contracts. taking on this role, I wanted to use my experience year provided a test of our operational competence with our stakeholders regularly, with feedback The NDA is an organisation with a clear vision and to lead the Board in ensuring the NDA delivers and resilience. A test that we passed. Some projects encouraged and acted upon. sound strategy, and this provides a strong base against its ambitious operational and cultural goals. and programmes were necessarily paused or from which we can build. slowed, with some impact on our mission delivery. With safety and security being our overriding My predecessor, Tom Smith, served as Chair for priority, it is encouraging to see that our leadership 3 years during which time he established a solid Challenges of COVID-19 Delivering our mission together in cyber resilience, working with the National Cyber platform and gave valuable guidance in steering Security Centre, has further enhanced our security the NDA on its journey of leading the UK’s nuclear Reflecting on the events and activities of the Our mission, to clean-up the UK’s earliest nuclear and cyber infrastructure, at a time when global clean-up programme. I would like to thank Tom last year, the COVID-19 pandemic has created sites safely, securely and cost-effectively with care threats are on the increase.

“The COVID-19 pandemic has created unprecedented circumstances for organisations the world over. The NDA is no exception”

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consider broader matters in our decision making, on climate change. We endeavour to support the expert arm’s-length nuclear decommissioning body, Creating great places to work I am pleased to introduce the new ‘Section 172’ Government’s carbon net zero targets and we to find the right way to handle this challenge in the approach in this report which highlights how are focused on plotting a course towards more future. Our employees, supply chain and stakeholders matters such as sustainability and the views of our sustainable operations. Our goal is to ensure a have been exemplary in their response to the stakeholders have been factored into our decisions legacy where our environmental contribution pandemic. While our business has mirrored Governance and Board evolution and direction of travel. This socially responsible and impacts on local communities helps them the mental health challenges seen globally, the standard helps our considerations as stewards of be thriving places to live and work as we move resilience and camaraderie throughout the group The NDA has been through a period of unrivalled the environment, our relationships with people and through our decommissioning mission. and in our communities has been a source of pride. scrutiny following the legal judgment on the how we lead the organisation. Furthermore, we can now maximise the benefits Magnox contract issues back in 2016, from a Within the NDA group, I see tremendous of a re-imagined future and create truly modern contract tender which began in 2011. Publication The Board’s desire to promote and reinforce good expertise, a highly skilled workforce and a capable ways of working. We have gained ground in better of the Magnox Inquiry Report by Steven Holliday governance also encompasses the lessons learned non-departmental public body that is focused understanding our culture and enhancing support on 4 March 2021 provided further insight into how from external reviews, for example, the Competition on its critical mission of cleaning up the UK’s for our diversity and inclusion agenda. Our journey the NDA, including the Board, and government and Markets Authority and the Brydon and historic nuclear facilities. I extend my thanks to follows a long-term path, and as with any journey, can make changes to improve our governance. Kingman reviews relating to governance and audit. our dedicated employees for their hard work, we have experienced highlights and challenges - Significant steps have already been taken to address our stakeholders for their challenge and our from which we continue to learn. the Inquiry’s interim findings in 2017 and we will communities for their continued support. ensure we respond to additional learning from the The year ahead Trusted to do more in the UK and Inquiry’s final Report. However, the NDA is today a very different organisation than it was in 2016 and Moving forward as a reinvigorated organisation globally is stronger and more capable. Of course, we can be will include acting on the recommendations from better still, and that is our focus. the recent publication of the BEIS Departmental We are delighted that this year has seen the Review of the NDA. Following on from the Magnox Department for Business, Energy and Industrial The Board is aware of its legal and fiduciary Inquiry Report, this Review and the learning from Strategy (BEIS) develop a plan to address the responsibilities. Our agenda and Board Committees its findings will allow the NDA to leave behind the impending need to decommission the country’s continue to evolve, responding to internal drivers, shortcomings of the past and move forward with Advanced Gas-Cooled Reactor (AGR) fleet, the expectations of our stakeholders and to address confidence. operated by EDF Energy. Transporting and storing external conditions. We work, where relevant, Dr Ros Rivaz spent AGR fuel has been an integral part of our within the UK Corporate Governance Code, It is important to consider, as our mission business for many years. The end of life of this NDA Chair and have a greater focus on the environmental, progresses, the effect our decisions and operations 15 July 2021 important low-carbon energy source offers the social and governance agenda. In our drive to have on the environment and the overall impact opportunity to support the government, as its

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Solutions (NTS), began a programme to return year and Low Level Waste Repository (LLWR) high-level waste shipments to Germany in 2020/21. followed earlier this month. The programme is a key component of our strategy to repatriate high-level waste from the UK, fulfil Earlier this year we saw our two transport overseas contracts and deliver UK Government companies, Direct Rail Services (DRS) and policy in this area. International Nuclear Services (INS), come together to create a leading nuclear transport and logistics Group Chief Executive’s Statement At Sellafield, we saw significant progress in critical organisation, NTS. We also announced our decommissioning work being achieved, with half intention to create a single waste division and of the waste being removed from the Pile Fuel bring together our group-wide waste management David Peattie Storage Pond. The site is working towards removing expertise from the LLWR and Radioactive Waste bulk radioactive material from the facility by 2024, Management businesses. which is one of the UK’s biggest nuclear hazards. Meanwhile, the skyline at the site continued to We’re already beginning to benefit from operating our programme to build and strengthen the change with work progressing to carefully take as a group, harnessing the opportunities that 2020 has been one of the most NDA group. down chimneys and stacks in some of the oldest come from our scale and breadth to drive effective unprecedented and difficult and most challenging parts of the site. The and efficient mission delivery. We’ll continue to The pandemic also acted as a catalyst for finding demolition of the second iconic Windscale Pile strengthen, embed, and capitalise on the work years in modern history. I have new ways to work and connect with each other. We chimney is a very visible demonstration of the work that’s been done to build a strong NDA group to have, as a result, been able to accelerate our move been heartened by the way our being done to make Sellafield a safer place and is a deliver decommissioning success and value for the to more agile working and our digital improvement significant step in the site’s clean-up mission. UK taxpayer. employees, supply chain and programme in the NDA and across the NDA group. stakeholders have come together The commitment to our nationally important I was delighted with Government’s recently to support each other and our Clean-up and decommissioning work was reflected in the Government’s one- announced decision to transfer EDF Energy’s progress year spending round, with record funding levels advanced gas-cooled reactor stations, post wider communities. secured. We are acutely aware, in this economic defueling, to the NDA for decommissioning. This environment, how important it is to maximise the is testament to the skills and experience within the Keeping our workforce safe during the pandemic value from this taxpayer investment, and we’ll NDA group and the progress being made on our has had an impact on some of our operations and They have joined in with the national and local continue to make this a priority. mission. efforts from helping the NHS, to delivering targets. Despite this, we have been able to progress important clean-up and decommissioning work. vital supplies to supermarkets, and even the Importantly, we’ve published the fourth iteration of To maximise the benefits of working together in a manufacture and donation of personal protective the NDA’s Strategy. This sets out our approach to ‘One NDA’ approach, we’ve taken important steps At Dounreay, work on its newest radioactive waste equipment to frontline health workers. dealing with the UK’s nuclear legacy and direction to revise the NDA group’s leadership structure. store is progressing well with the walls nearly of travel for achieving our mission, informed by Pivotal to this, is the creation of a new NDA complete. The store is an important part of our Despite the scale of the challenges brought by the stakeholder views gleaned through intensive Group Leadership Team (GLT) to drive improved waste storage strategy and will hold waste in safe global crisis, we celebrated the achievement of engagement. leadership, assurance, collaboration and transfer long-term storage in line with Scottish policy. notable milestones last year, both in our of learning and skills across the NDA group. The Our new transport division, Nuclear Transport clean-up and decommissioning work and against These successes have been achieved during GLT has representatives from the NDA and our incredibly difficult times and I’m immensely proud operating companies and by taking a cross-group of our people and the commitment they’ve shown view, the team will drive benefits for our mission, “We’ve published the fourth in challenging circumstances. people, site communities and the taxpayer. iteration of the NDA’s Strategy. Building the NDA Our people group to support mission delivery This sets out our approach to The change to the way we’ve been required to In last year’s report, I wrote about the important work, because of the pandemic, has given us an dealing with the UK’s nuclear steps being taken to strengthen and simplify the opportunity to build on our flexible and agile way our group is organised, including moving to a working arrangements. We’re committed to legacy and direction of travel for subsidiary model. All of our operating companies creating great places to work for everyone and have now become NDA subsidiaries. Dounreay integral to that is our commitment to diversity and achieving our mission.” became a wholly owned subsidiary in March this inclusion at every level.

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We’ve taken significant steps over recent years to Following on from the NAO’s work, the Public improve our workplace culture and are starting Accounts Committee published a report in to see this vitally important agenda gathering November on the Magnox contract after a hearing pace across our entire group. However, we are in early October. The Committee recognised the not complacent nor blind to feedback and know inherent uncertainties and the challenges we there is still more to do, and we will continue our face in delivering our mission and acknowledged relentless focus in this area. that progress is being made, including increased understanding of our sites and the nature of At the same time, we’re turning our attention to their waste inventory. The Committee also made giving the same heightened focus on improving the important recommendations, including some way we embed sustainability into our operations around our estimates for future decommissioning to support the UK’s net-zero greenhouse gas costs. emissions target, set out by the Government in 2019. Fighting climate change is a national priority In March this year we saw the publication of the and we’ve made carbon net-zero a priority across Magnox Inquiry. I welcome its publication and across the NDA group. thank Mr Steven Holliday for his recommendations, which we’ll carefully consider before publishing Our priorities and direction are always guided by a formal response later this year. We’ve already our stakeholders, who play such an important acted upon the findings that came from the Interim role in our mission. Our stakeholders are vitally Report in 2017. In addition, BEIS’s Departmental important to us and, with our sites spread across Review on the role of the NDA was published in the UK, it’s crucial that we continually engage with June 2021, and we are examining the findings and them and the communities in which our sites are will respond to these in due course. based. Building and maintaining the trust of our stakeholders remains an enduring priority. The NDA is now a much stronger organisation, operating under a very different model than at the We continue to regularly engage with our site time of the issues, which we’ve learned from. We’ve stakeholder groups as part of our commitment to made improvements to the way the NDA operates openness and transparency, and we encourage to provide greater focus, discipline, standardisation, feedback and engagement from our stakeholders and simplification. at every opportunity. The pandemic posed new challenges for us in meeting with our stakeholders, With thanks and we’ve embraced digital platforms and seen increased levels of engagement through these new ways of connecting. Making full use of digital I was delighted to welcome Dr Ros Rivaz in technology has also helped to introduce us to new, September as the new NDA Chair, after Tom Smith harder to reach, audiences. stepped down having been in post for 3 years. Ros brings with her experience in working with some of the world’s most respected companies to support Scrutiny, learning and acting on us as we deal with some of the world’s most recommendations complex challenges.

In September, The National Audit Office (NAO) Finally, I would like to recognise and thank our published its report on the termination of the workforce who are so pivotal in the execution Magnox contract. It’s right and proper that public of our important mission. I am grateful for their bodies such as ours are scrutinised to ensure that dedication and commitment, particularly amidst we’re providing value for money and successful the unprecedented challenges of the last year. outcomes for the taxpayer. I’m grateful for its important findings and pleased that the Report recognised some important progress on the Magnox sites, particularly since Magnox became a subsidiary in September 2019. David Peattie Accounting Officer and Group Chief Executive Officer 15 July 2021

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Financial Review Performance against financial targets Mel Zuydam - Group Chief Financial Officer

How £3.059bn funding was used on A year of effective portfolio management of income and the NDA mission Expenditure Expected Net funding resources across the group, balancing risks and opportunities, £2.082bn Sellafield limit income limit £408m Magnox - = £3.468bn £0.862bn £2.606bn and maximising our business plan delivery where possible. £169m Dounreay £72m LLWR The COVID-19 outbreak and prolonged periods of Our funding for the new financial year was secured £59m RWM £49m INS lockdown has brought about challenges across all in the recent 1-year Government spending review £46m Springfields and Capenhurst industries. Financially, our focus has been continuing to and preparations are under way for the longer-term £174m Other progress our nationally-critical decommissioning mission Government spending review expected later this year. within the country’s challenging and ever-changing financial environment. We have continued to develop our new ways of working, developing the Integrated Financial Framework (IFF) Making sure our businesses and their supply chains have during the year. The IFF is a programme of continuous Actual Actual Actual net had access to adequate flows of funds, and the ability to improvements in our financial management, and this expenditure income funding accelerate payments to ensure the safe progress of work year we have added Risk and Assurance as a fourth - = £3.059bn £0.612bn £2.447bn and financial stability has been paramount. workstream as it comes under the umbrella of the IFF, alongside the existing areas of People, Reporting & The need to follow Government restrictions and keep Performance and Value for Money & Internal Control. our people safe meant that some of our complex construction and engineering projects needed to be As we look ahead to the new year, we are pleased to slowed down or paused, particularly in the first few welcome Dounreay Site Restoration Ltd (DSRL) and months of the pandemic. We were, therefore, able to Low Level Waste Repository Ltd (LLWR) into the NDA return a significant amount of funding to HM Treasury, group. These additions, alongside the integration of our at a time when the public finances were under most transport businesses into Nuclear Transport Solutions Ltd pressure. and the formation of our new waste division, complete NDA actual income £612m the main restructuring activities in the group and provide - £2.082bn - £408m - £169m - £72m - £59m - £49m - £46m In total, our net expenditure for the year was £2,447 a platform for more efficient working, value for money, £275m Reprocessing/waste contracts million compared to the original voted net expenditure of and transparency in reporting. £2,606 million. Our capital investment was £1,801 million £213m Spent fuel management and our resource expenditure (including our own admin £4m Energy sales expenditure) was £1,258 million. We were able to maintain delivery of the commercial operations and contracts to Other costs £49m Nuclear materials and transport our customers, generating £612 million of income during Mel Zuydam Industry costs £100m £71m Other the year. Group Chief Financial Officer Fees to SLCs £16m Energy costs £3m NDA running costs £55m Note the figures in the above graph are prepared on the basis of Government financial reporting, (HM Treasury Consolidated Budgeting Guidance), which differs in part from the “Our focus has been continuing Total £174m basis used to prepare the financial statements. to progress our nationally-critical decommissioning mission within the £3.1 billion £2.5 billion £0.6 billion £55 million country’s challenging and ever-changing A total of £3.1 billion A net total of £2.5 £0.6 billion of income NDA’s own running costs spent in the year billion funded by the are 1.8% of overall estate financial environment.” Government budget

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Our sites The UK’s nuclear landscape began to electricity for homes and businesses. take shape in the post-war period. The Fuel fabrication and reprocessing plants focus during the Cold War arms race were built from the 1970s to 1990s. was on producing material for Britain’s nuclear deterrent. When the nation’s Our 17 sites reflect this legacy and 17 priorities shifted, facilities were turned include the first fleet of nuclear power nuclear sites into nuclear power stations, and, from stations, research centres, fuel-related across the UK 1956 onwards, the UK’s first nuclear facilities, and Sellafield, which has the power stations began generating largest radioactive inventory and the The NDA and our mission most complex facilities to decommission.

Current plans indicate it will take more than 100 years to complete our core DOUNREAY mission of nuclear clean-up and waste management. The goal is to achieve the operating11 end state at all sites by 2120. The NDA is charged, on behalf of Government, with the companies mission to clean up the UK’s earliest nuclear sites safely, securely and cost effectively. Doing this with care for our people, communities and the environment is at the heart of our work. We’re committed to overcoming the challenges of nuclear clean-up and decommissioning, leaving the 15,000 HUNTERSTON A 17 nuclear sites ready for their next use. employees across the group

CHAPELCROSS What we do How we’re set up

As owners of one of the largest nuclear We’re an executive non-departmental public SELLAFIELD decommissioning and remediation programmes body created by the Energy Act 2004 to lead the LLW REPOSITORY in Europe, our main priority is to lead the work clean-up and decommissioning work at our 17

across the NDA group and develop the strategy sites on behalf of Government. We’re sponsored SPRINGFIELDS for how it should be carried out. We also play and funded by the Department for Business, an important role in supporting Government’s Energy and Industrial Strategy (BEIS). Our plans 1,043 CAPENHURST WYLFA aspiration for the UK to be a global leader in the for cleaning up the sites are approved by BEIS hectares of civil nuclear sector. and Scottish ministers, who provide a framework designated TRAWSFYNYDD for us. land on nuclear Our strategy is continually evolving and is licensed sites updated every 5 years. Our fourth iteration was We have 6 offices across the UK, in Cumbria, SIZEWELL A published in March 2021. Dounreay, Harwell, Warrington and London and BRADWELL employ 284 permanent staff. BERKELEY We strive to deliver best value for the UK HARWELL taxpayer by focusing on reducing the highest OLDBURY hazards and risks, while ensuring safe, secure, HINKLEY DUNGENESS A and environmentally responsible operations at POINT A our sites. By generating revenue through our WINFRITH commercial activities, we seek ways to reduce levels of public funding from Government. 800+ buildings to be demolished

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The NDA group

We don’t deliver our mission alone. Accomplishing this important work requires the best efforts of the entire NDA group.

Cleaning up and decommissioning the UK’s Services (INS), Direct Rail Services (DRS) and INS’s nuclear legacy is a complex undertaking and subsidiary Pacific Nuclear Transport Ltd (PNTL) relies on the full range of expertise and skills into a single transport division – Nuclear Transport within the NDA group. Over the last few years, Solutions (NTS). we’ve transformed the way in which our group is organised, transitioning our operating model NTS specialises in the operational, commercial, from a parent body organisation (PBO) structure engineering, legal, and regulatory expertise that to a subsidiary model. The PBO model saw our underpin nuclear transport and logistics operations. sites managed by private sector consortiums and moving to a subsidiary model removes previous It operates DRS and PNTL, which continue to deliver commercial barriers, enabling us to simplify rail and shipping services for customers, building our structures, pursue opportunities, overcome on decades of experience of providing safe, secure challenges together and share learning, skills, and reliable transport solutions. and technologies. All of the operating companies The Radioactive Waste Management (RWM) within the NDA group have transitioned to being subsidiary leads the NDA’s work to deliver a NDA subsidiaries, enabling us to fully harness the Geological Disposal Facility (GDF) and provides opportunities that come from working effectively radioactive waste management solutions. A GDF and efficiently. This will bring benefits for our is recognsied internationally to be the safest mission, the taxpayer, and our people. permanent solution for managing higher activity Site licence companies radioactive waste, isolating it deep in solid rock, via a network of vaults and tunnels. The 4 organisations in the group charged with running our sites are called site licence companies As we continue to bring together important (SLCs). Sellafield, Magnox, DSRL (from 1 April 2021) expertise under our new operating model, we and LLWR (from 12 July 2021) are all wholly owned announced this year our intention to create a NDA subsidiaries. single waste division. This will bring together our group-wide waste management expertise in RWM Enabling organisations and LLWR and help us to grow capability, simplify how we operate and deliver greater value for the Other important subsidiaries within the group taxpayer. are responsible for delivering crucial support and enabling activities, including our transport Our other subsidiaries are Rutherford Indemnity, organisations. In February 2021, we brought NDA Archives, NDA Properties and Energus. together the extensive transport and logistics expertise of our subsidiaries International Nuclear

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The NDA organisational structure

Department for Business, Energy and Industrial Strategy (BEIS) BEIS is the Government sponsor of the NDA and sets policy and funding

UK Goverment Investments (UKGI) UKGI provides strategic oversight of the NDA’s corporate governance and performance

The NDA is charged with the mission to clean-up the UK’s earliest nuclear sites safely, securely and cost-effectively. Doing this with care for our people, communities and the environment is at the heart of our work.

Operating company subsidiaries Other businesses that support our mission

SELLAFIELD MAGNOX 1DOUNREAY 2LOW RADIOACTIVE INTERNATIONAL DIRECT NDA NDA RUTHERFORD ENERGUS URENCO SPRINGFIELDS NUCLEAR FUELS LTD LTD** LTD** SITE LEVEL WASTE WASTE NUCLEAR RAIL SERVICES ARCHIVES PROPERTIES INDEMNITY RESTORATION REPOSITORY MANAGE- SERVICES LTD** LTD** LTD** LTD** STEWARDSHIP LTD** LTD** MENT LTD** LTD** LTD

including ENERGUS Owner Owner subsidiaries; URENCO Westinghouse PNTL, INS Nuclear Electric UK Japan, INS Stewardship Ltd Holdings Ltd France SAS

Decommissioning contract, residue From February 2021, INS and Coming together as the NDA processing, leases and other DRS were brought together into group’s Waste Division commercial arrangements a single Transport Division

1Dounreay Site Restoration Ltd was owned by Parent Body Organisation, Cavendish Dounreay Partnership Ltd, 2 up to 31 March Low Level Waste Repository Ltd was owned by Parent Body Organisation, UK Nuclear Waste **NDA Group for Statutory Accounts Management Ltd, up to 11 July 2021.

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Our strategic themes We use 5 strategic themes to describe all the activities needed to deliver the NDA’s mission.

The first 4 strategic themes, Spent Fuels, Nuclear is known as Critical Enablers. The diagram below Materials, Integrated Waste Management and Site demonstrates how they interplay. Decommissioning and Remediation relate directly Currently, the most urgent task is dealing with to our clean-up and decommissioning work and are our sites’ highest-hazard materials, spent fuel, known as driving themes. nuclear materials and highly-radioactive wastes. Once the inventory has been made safe, the The fifth theme describes the important activities redundant nuclear facilities can be dismantled and needed to support the delivery of our mission and demolished.

Integration of our strategies

Our strategic approach and themes

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Spent Fuels Strategic outcomes 1-15

Our strategy defines our approach to managing The NDA’s strategy is to bring the reprocessing the diverse range of spent fuels for which we are programme to an end. The Thermal Oxide responsible, which are divided into magnox, oxide Reprocessing Plant has already closed and the and exotic. Once spent fuel is removed from a reactor, Magnox Reprocessing Plant will follow. All remaining it is stored in a pond or dry store until it can be spent fuel will be safely stored until a permanent dispatched to Sellafield. solution for disposal is available. Reprocessing extracts materials (plutonium and uranium) that could potentially be re-used and Our spent fuel work is separated into 15 strategic also generates highly-radioactive wastes, or ‘fission outcomes that we must deliver, outlined below. products’. LLWR Sellafield Magnox Dounreay RWM NTS Capenhurst Springfields

2021 % complete

1 All Magnox sites defueled 100%   

2 All legacy Magnox fuel retrieved Our driving themes and 25%  3 All Magnox fuel reprocessing completed 94%  strategic outcomes 4 All remaining Magnox fuel in interim storage 25%  SPENT MAGNOX FUEL 5 All remaining Magnox fuel disposed 0%   6 All EDFE oxide fuel received 54%   Across our 4 driving themes, we break our mission down into 7 All legacy oxide fuel retrieved 100% 47 strategic outcomes. These outcomes represent the significant  pieces of work that have to be achieved to deliver our mission. 8 All oxide fuel reprocessing completed 100%  9 All remaining oxide fuel in interim storage 49%  SPENT OXIDE FUEL 10 All remaining oxide fuel disposed In March 2021 we published our new Strategy. Overall, good progress continues to be made 0%   As a consequence, we have revised some detail across our mission as we safely manage All exotic fuel defueled for a number of outcomes to ensure they our nuclear inventory and reduce the risks 11 67%   continue to align with our strategic approach. associated with it. Last year saw more spent fuel of all types placed in interim storage. 12 All exotic fuel consolidated 55%    Increasingly, we’re building a more accurate picture of the work that’s been completed across More strategic outcomes will be achieved with 13 All exotic fuel reprocessing completed 90%  our 47 outcomes and that which is still left to do. the closure of the reprocessing facilities and the The percentage figures in the charts opposite building of new modern treatment and storage 14 All remaining exotic fuel in interim storage 83% show how much of the work has been achieved facilities to manage nuclear material and waste, SPENT EXOTIC FUEL  in each outcome so far. ultimately working towards the final disposal of 15 All remaining exotic fuel disposed 0% nuclear inventory and the release of land for   other economic uses. Table 1 - Mission Progress Reporting Strategic Outcomes  Denotes outcome complete  Applicable to each SLC/company

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Case Study - Nuclear materials Nuclear Materials Strategic outcomes 16-25

Our strategy defines our approach to dealing with All of our plutonium is stored at Sellafield. Our the inventory of uranics and plutonium currently uranium is located at a number of our sites and we stored on some of our sites. These nuclear materials are continuing to consolidate it at sites, which we are by-products from different phases of the fuel consider are best suited to its management. cycle, either manufacturing or reprocessing. Our nuclear materials work is separated into 10 All nuclear materials must be managed safely and strategic outcomes that we must deliver, outlined securely, by either converting them into new fuel or below. immobilising and storing them until a permanent UK disposal facility is available. LLWR Sellafield Magnox Dounreay RWM NTS Capenhurst Springfields

Nuclear materials 2021 % complete 16 All plutonium produced 97%  17 All plutonium consolidated 100%    German Vitrified 18 A: All plutonium repacked in long-term storage 0%  B: All cans not suitable for extended storage repackaged 0% Residue Returns PLUTONIUM 19 All plutonium in interim storage 0%  20 All plutonium reused or disposed 0%   A programme to return high-level radioactive The waste results from the reprocessing and 21 All uranium produced 93%  waste in the form of vitrified residues to recycling of spent nuclear fuel at the Sellafield Germany, started at the end of 2020. site, which had previously been used by utilities 22 All uranium consolidated 80%       to produce electricity in Germany. The first of 3 shipments saw waste sent to federal 23 All uranium treated 4%   storage facilities in Germany. The Vitrified Residue Returns programme is a key URANICS component of the NDA’s strategy to repatriate All uranium in interim storage 56% 24   These returns involve Sellafield Ltd, working in high-level waste from the UK, fulfil overseas partnership with Nuclear Transport Solutions, to All uranium reused or disposed 1% contracts and deliver UK Government policy. 25    return the waste to its German customers. It is then transported by sea on a specialist vessel to a German port, then onwards by rail to the final destination.

30 31 NDA Annual Report and Accounts 2020/21 NDA Annual Report and Accounts 2020/21

Case Study - Integrated waste management Integrated Waste Management Strategic outcomes 26-39

Our strategy considers how we manage all forms of level waste, some has already been permanently waste arising from operating and decommissioning disposed of. our sites, including waste retrieved from legacy facilities. Retrieving, treating and interim storing the radioactive waste from Sellafield’s 4 legacy ponds Managing the large quantities of radioactive waste and silo facilities is the NDA’s highest priority. from electricity generation, research, the early defence programme and decommissioning is one Our Integrated Waste Management (IWM) work is of the NDA’s biggest challenges. separated into 14 strategic outcomes that we must deliver, outlined below. Some of this radioactive waste is in a raw (untreated) form, some has been treated and LLWR is being interim stored and, in the case of low Sellafield Magnox Dounreay RWM NTS Capenhurst Springfields

2021 % complete 26 All LLW produced 7%       Geological Disposal Facility engagement 27 All LLW treated - to enable diversion or reuse 8%        and working group progress 28 All waste suitable for disposal in NDA facilities 14%       

LOW LEVEL WASTE 29 All waste suitable for permitted landfill disposed 4%        An important start was made in identifying a The search for a suitable site and willing community 30 All ILW produced 33%       willing community and a suitable site in England or is a nationwide process in England and Wales. It will Wales to host a Geological Disposal Facility (GDF) include detailed investigations to make sure a GDF 31 All legacy waste retrieved 8%   with the formation of two separate local working can be constructed safely and securely. groups. Both were from west Cumbria, with the 32 All ILW treated 9%      first established in Copeland in November 2020, Deep geological disposal is endorsed followed by Allerdale two months later. internationally as the best long-term solution for 33 All ILW in interim storage 15%      the safe and secure disposal of higher-activity The working groups have started local discussions radioactive waste. Building a GDF will be one of the 34 INTERMEDIATE LEVEL WASTE INTERMEDIATE All ILW disposed 0%     and fact-finding about the opportunity of hosting biggest environmental protection projects in the UK a GDF in their area and will identify prospective and a major infrastructure project. 35 All HLW produced 68%  search areas where future geological investigations could be carried out. A GDF consists of highly-engineered vaults and tunnels located deep underground, designed to 36 All HLW treated 73%   t is also anticipated that existing working groups protect the environment and keep waste safe and will want to develop into longer-term community secure while the radioactivity decays naturally. All HLW waste in interim storage 83% 37   partnerships and take the process forward with their local communities. This will trigger access to Radioactive Waste Management Ltd is working 38 All overseas HLW exported 11%   community investment funding for initiatives that in partnership with communities to explore how HIGH LEVEL WASTE drive economic development, improve the local having a GDF in their area can provide long-term 39 All HLW disposed 0% environment, or community wellbeing. economic and employment benefits and play a major part in their development plans.

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Case Study - Integrated waste management Case Study - Integrated waste management

In 2020, we set out plans for an Integrated Waste Management (IWM) Programme, which has the potential to revolutionise the way the nuclear industry manages waste and save billions for the UK taxpayer. Integrated Waste Our radioactive waste strategy, published in 2019, committed to the creation of an IWM Management Programme that would aim to deliver more sustainable, efficient, and innovative ways of Programme managing radioactive and non-radioactive waste.

The new approach moves towards a more ‘risk-informed’ approach based on the chemical and physical properties of the waste, rather than only the current radiological classification.

Re-considering the way waste is managed Low Level Waste Repository presents opportunities for greater flexibility and improved efficiency, from treatment, Gemini Container Programme through to packaging and disposal.

In working more collaboratively at all points along the waste lifecycle, a greater Three Gemini–type waste containers, used to The container fleet supports the NDA group’s understanding will be gained about the UK’s transport drums of radioactive waste, have been waste transport programme and its mission to waste inventory. refurbished and modernised in a collaborative ensure the safe and cost-effective transport of New treatment and disposal options can project between NDA group operating waste. be opened across the NDA group offering companies, Low Level Waste Repository Ltd Virtual reality (VR) tools have been used to train opportunities to significantly reduce the (LLWR), Magnox and Sellafield. personnel at Magnox and Sellafield in handling volume of waste that is packaged and The containers will play an important part in a 5 the containers. placed in interim storage. Re-evaluating the year project to transfer around 700 concrete-lined types of waste sent for disposal is an area drums of radioactive waste from Magnox sites for Delivered by LLWR’s Waste Management Services with huge potential for improved efficiency. storage at Sellafield. team, VR headsets were used with virtual scenarios which mirrored conditions encountered Innovation from within NDA group Having gone through rigorous testing at the at Sellafield and Magnox sites. companies and the supply chain can have end of 2020, following a 3 year refurbishment in a massive impact on reducing processing, France, the first of the containers is due to be fully During training, Sellafield operators saw a replica packaging and disposal costs. operational by October 2021 with the others set of the container receipt facility on site, bearing the same dimensions and equipment. Similarly, Waste management accounts for around to be in service by the end of the calendar year. Magnox operators saw an exact mock-up of a £25 billion of the whole nuclear provision. receipt facility at Harwell, as part of their training. But moving to an integrated, full lifecycle approach, could reduce that bill by over £2 billion.

34 35 NDA Annual Report and Accounts 2020/21 NDA Annual Report and Accounts 2020/21

Case Study - Site decommissioning and remediation

Site Decommissioning and Remediation Strategic outcomes 40-47

Our strategy defines our approach to The NDA is currently assessing alternatives for the decommissioning redundant facilities and final stages of decommissioning that could lead managing land quality in order that each site can to earlier release of land, continued employment be released for its next planned use. and opportunities to re-use the land.

After the buildings on our sites have been Our site decommissioning and remediation work decommissioned, decontaminated, and is separated into 8 strategic outcomes that we dismantled, the land will be cleaned up to allow must deliver, outlined below. it to be released for other uses. At that point, its ownership would transfer to the new user of the land. LLWR Sellafield Magnox Dounreay RWM NTS Capenhurst Springfields Sellafield skyline changes

2021 % complete

In just the last few years, the Sellafield skyline has The project to demolish the stack is now nearing 40 All planned new buildings operational TBD changed dramatically as a result of the ongoing an end with the stack reduced to a 30cm stub.       work to demolish 2 iconic chimneys. 41 All buildings primary function completed 35% Other techniques were used in the work to OPERATIONAL OPERATIONAL PLANNED AND       The First Generation Reprocessing Plant (FGRP) remove the Windscale Pile One chimney, which

stack and the Windscale Pile One stack have been stood at 125 meters. 42 All buildings decommissioned 18%       gradually reducing in height as the chimneys are steadily removed as part of Sellafield’s 100-year Diamond wire saws were used to cut out 6-tonne 43 All buildings demolished or reused 16% AND DEMOLITIONAND       blocks of concrete which were then removed by a DECOMMISSIONING decommissioning programme. giant crane. 44 All land delicensed or relicensed 9%    The project to remove the chimneys was a priority for Sellafield. The aging structures were The first piece to be removed was the square- 45 All land in End State - 41%       surrounded by critical nuclear facilities in a shaped ‘diffuser’ at the top of the chimney. all planned physical work complete congested area of the site and taking them down Famously, this filtration system was a last-minute SITES       will see 2 of the site’s intolerable safety risks addition, placed unusually at its summit by 46 All land demonstrated as suitable for reuse 9% removed. designer Sir John Cockroft. It turned out to be      a masterstroke - in 1957, fire broke out in the 47 All land dedesignated or reused 9% The FGRP stack, which provided ventilation to Windscale Pile One reactor. The sky-high filters various buildings and plants on the Sellafield site, captured an estimated 95% of the radioactive had to be demolished by hand because of the dust created. risk to the buildings containing nuclear material that surround it. Working from a platform, The demolition of the 2 chimneys is a very visible which clung to the chimney using friction alone, demonstration of the work being done to make the team carefully cut away the concrete and Sellafield a safer place and is a huge step in the steel stack using hand tool. Over a period of clean-up mission of the site. 30 months, 52 metres of the structure were removed.

36 37 NDA Annual Report and Accounts 2020/21 NDA Annual Report andHealth Accounts and 2020/21 safety

People Our fifth strategic theme, Our mission needs a diverse range of individuals critical enablers, covers the and organisations to provide the capability and capacity to deliver effectively, so having the right important activities needed skills at the right time within the NDA group and our supply chain is a priority. Our strategy on to support the overall skills is threefold: attracting the right calibre of delivery of our mission. people, developing future skills, and developing our existing talent.

Socio-economics Health, safety, security, We have a responsibility to support the environment and wellbeing sustainability of our sites’ communities, up to and Safety is, and always will be, our number one after their closure. priority. Our focus is to reduce the highest hazards and risks, while ensuring safe, secure and The NDA group’s socio-economic strategy is environmentally responsible operations at our built upon supporting sustainable incomes, sites. It’s our duty to carry out this highly-complex resilient economies and thriving communities. mission safely and efficiently while ensuring Our approach is to work locally. This means people and the environment are safeguarded at working in partnership with local authorities and all times. organisations to better understand local needs.

We will apply the principles of sustainability Research and Development to ensure that our mission outcomes and the Delivering our mission needs many ‘never- journey to achieve them are the right balance of done-before’ solutions, which require significant environmental, economic and social impacts. innovative and novel engineering approaches. Our strategy is to solve the challenging technical We have a responsibility to ensure that the group problems safely, while aiming to be more has the appropriate levels of physical, personnel, effective, efficient, and wherever possible, for less cyber and ICT capability, and competencies to cost to the taxpayer. minimise risks and protect all group assets. Research, development and innovation is essential Supply Chain to decommissioning our sites and is delivered in A diverse, ethical, innovative, and resilient partnership with our supply chain. supply chain is essential to delivering the NDA mission and provides value for money for the UK Developing innovative ways to overcome our taxpayer. challenges will see us focus on areas such as remote and robotic technologies in the coming Our strategies are aligned to business operations, years and take advantage of innovation in other Our critical enablers informed by excellent market insight, and sectors such as space, oil and gas. recognise that value comes in many forms, such as an improved environment, reduced hazard, Public and stakeholder engagement social amenities, cost savings and employment Engaging openly and transparently with all our opportunities. stakeholders is crucial to building the support, confidence and trust we need to deliver our Transport and Logistics mission. The effective delivery of the NDA mission relies To find out more about our other critical enablers on our ability to transport radioactive materials please refer to our revised Strategy which can (e.g. spent fuel, radioactive waste, contaminated be found at https://www.gov.uk/government/ items) and bulk materials (e.g. spoil, concrete, raw publications/nuclear-decommissioning-authority- materials) to, from and between our sites. strategy-effective-from-march-2021

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Case Study - Critical enablers - People Case Study - Critical enablers - People

Equality, diversity and inclusion at the NDA

The NDA group’s important work on diversity and inclusion continued to be a key focus throughout 2020/21. As part of this NDA group’s response to the COVID-19 pandemic ongoing work, we launched 4 networks across the NDA group to provide greater focus, visibility and support to underrepresented The NDA group’s skilled workforce has risen quickly As well as donations of time, the workforce has also employee groups, and create and inspire a respectful and to the sudden and ongoing challenge of the been organising and contributing to fundraising COVID-19 pandemic. schemes for the NHS and provision of essential inclusive culture. equipment. From the manufacture and donation of vital This included the creation of the gender balance and provides a safe support forum to share personal protective equipment to frontline health Just over £450,000 has so far been given to the network, race equality network, disability network experiences and discuss relevant issues. workers across the UK, to scientists, engineers, safety communities around our sites for COVID-19 relief and LGBT+ network. teams and other personnel helping during the time support. Supporting and highlighting the needs of the NDA of international crisis. Ensuring gender equality is fundamental to the group’s disabled community, the disability network This has been granted to local councils and NDA group. The gender balance network will play acts as a collective voice for disabled colleagues, The NDA’s rail subsidiary, Direct Rail Services Ltd, community groups which have used the funding to an important role in this agenda by providing promotes positive attitudes and raises awareness of played a key role during national lockdowns in go towards emergency provisions, including food mentoring opportunities, working with other disability equality. delivering vital supplies to supermarkets around the supplies, local business support and other essential networks across the group and helping to identify UK. social support services. and address diversity issues. Our LGBT+ community has been a huge supporter of our diversity and inclusion agenda and we are NDA group employees have also helped during the Meanwhile our commitment to supporting the delighted to now have a group-wide network. As effort with many assisting and supporting elderly advancement of diversity and inclusion will benefit well as their work to promote the safety, equality and vulnerable members of the community, with the from the launch of the race equality network. The and wellbeing of LGBT+ colleagues, they will play an likes of delivering prescriptions and food supplies. group provides an additional platform to advance active role in growing a supportive community of equality, diversity and inclusivity of ethnic minorities allies.

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Case Study - Critical enablers - Transport and Logistics Case Study - Critical enablers - Public and stakeholder engagement

Transport division created and operational Stakeholder engagement for Strategy 4 consultation

Earlier this year, we brought our extensive transport By bringing together that expertise into a single The Energy Act 2004 requires us to review our Using virtual platforms enabled us to host more and logistics capabilities together into a single organisation, NTS has become a centre of Strategy every 5 years. The Strategy sets out our regular meetings with stakeholders with many transport division – Nuclear Transport Solutions excellence in the transport of radioactive and other strategic direction and long-term objectives for the finding it easier to attend digital meetings. (NTS). critical materials. NDA group. Following the consultation process, we received 77 Delivering our mission relies on being able to safely It combines responsibility for transport and The drafting process for each iteration of sets of feedback from a wide range of stakeholders, transport radioactive materials and other freight. packaging, along with the operational, commercial, the Strategy involves extensive stakeholder including individuals, public bodies and private engineering, legal, and regulatory expertise that engagement. The Strategy also must be publicly organisations. The Strategy 4 consultation received The UK has long been a global leader in this field underpin nuclear transport and logistics. consulted upon providing an opportunity for more responses than any of our previous strategy particularly through the expertise that exists within people to feedback their views on the proposed consultations, and these responses were carefully our subsidiary organisations, International Nuclear NTS supports the NDA group’s important mission Strategy. considered in developing the final Strategy, which Services Ltd (INS), Direct Rail Services Ltd (DRS), by transporting spent nuclear fuel from UK power was subsequently published in March 2021. and the INS subsidiary Pacific Nuclear Transport Ltd stations to Sellafield, returning reprocessing In August 2020, we launched a public consultation (PNTL). products to customers overseas, and providing for Strategy 4 which ran for 12 weeks. A bespoke We’ll be taking the learning from the success of the packaging and licensing solutions to the NDA digital campaign was created to deliver the virtual consultation onto other areas of work. group. consultation virtually, taking into consideration COVID-19 restrictions. Our Strategy can be found here: It also generates revenue through commercial opportunities in the UK and overseas – offsetting Online meetings and live streaming, which saw https://www.gov.uk/government/publications/ the cost of delivering decommissioning and clean- NDA experts present on key topics, were used to nuclear-decommissioning-authority-strategy- up work at the UK’s oldest nuclear sites. connect with our stakeholder audience. A virtual effective-from-march-2021 exhibition was also developed for stakeholders to NTS operates DRS and PNTL, which will continue access more information. to deliver rail and shipping services for customers, building on decades of experience of providing safe, secure and reliable transport solutions.

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Case Study - Critical enablers Health, safety, security, environment and wellbeing

Carbon net-zero

The NDA’s sites were at the forefront of generating A carbon management plan will be developed low-carbon electricity for many years. Now, our to support the delivery of lower carbon and mission is to clean-up the UK’s earliest nuclear sites sustainable initiatives within our operating safely, securely, cost effectively and with care for companies. our people, communities and the environment. Our carbon footprint will be routinely reviewed We’re committed to making the journey towards and more accurate tools will be devised for delivering our mission a sustainable one. In 2020, calculating the impact of the goods and services we committed to support the UK Government’s we procure, where a low-carbon culture will be target to have net-zero greenhouse gas emissions embedded into our procurement process. by 2050, with the Scottish Government target being 2045. We will be addressing the ways we indirectly impact the environment through the goods and We made it a key business priority to focus on our services we procure. For example, the electricity carbon footprint and take action to reduce our we buy may be produced from processes which emissions as much as possible. generate greenhouse gases, the commodities, materials and equipment we use all take resources Identifying our top 3 carbon emission contributors and energy to produce and transport. as being the fuel we burn, the electricity we purchase, and the business travel and goods and There will still be some hard-to-decarbonise services we procure, we’ve developed a activities, but our goal is to offset these by net-zero roadmap. This identifies opportunities removing greenhouse gases from the atmosphere Sustainability at the NDA for us to reduce our energy use by changing our by natural means such as planting trees or behaviours, using our plant and systems more restoring peatland where possible. efficiently and looking at the role renewables can play in our future.

The report can be found here: www.gov.uk/ In our approach to sustainability, government/publications/nda-sustainability-report- we believe our duty is to leave a financial-year-april-2020-to-march-2021 positive lasting legacy. The report showcases the work across the group Magnox - Hydro-electric energy to promote and support the positive social and A legacy where our environmental contribution environmental outcomes we realise as part of our Maentwrog hydro-electric power station, in The water is carried by a pipeline to drive two and our impacts on the communities in which we operations. Gwynedd North Wales, is a unique asset in the turbines, which generate enough electricity to operate, helps them be thriving places to live and NDA group’s portfolio. power around 12,000 local homes each year. work - providing future generations with an even There are many ways that we can maximise the firmer foundation from which to grow and develop. positive impacts of our work, and the value our Owned and operated by Magnox Ltd, the site During 2020/21, Maentwrog generated 74.2 operations bring through employment, training, generates electricity using rainwater collected from gigawatt hours of renewable energy - enough to As part of this ongoing work, we published our first education and by supporting our communities to streams and rivers that feed into Trawsfynydd lake. make 2.9 billion cups of tea. ‘Sustainability at the NDA’ in March 2021. become healthy and prosperous places.

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Case Study - Critical enablers - Socio-economics Case Study - Critical enablers - Socio-economics

St Ola Pier Môn communities forward Envision Unlocking East Quay St Ola Pier, at Scrabster Harbour in Thurso, Môn Communities Forward (Môn CF) has Envision is a South Gloucestershire community Work continued on the £7 million East Quay Caithness, has been at the heart of a major assisted local people and businesses by offering a apprentice mentoring programme, which has been community project in Watchet, West Somerset, development project to allow the port to professional recruitment service and employment supported by £90,000 of Magnox funding. which is on track to open in summer 2021. accommodate larger and deeper vessels. support package specifically tailored to meet the needs of Anglesey people and enterprises. The programme is a cross-school active citizenship Supported by £250,000 of NDA group funding, Enabling port infrastructure for growth in the competition, which has been supported by Magnox it houses a gallery, restaurant, studios and energy industry and cruise tourism, the project With the help of Magnox funding over a number of since 2018. Since then, it has helped over 300 accommodation. It aims to support the local has been supported by £5 million of NDA group years, it has grown from offering vocational training students from 5 schools in the area. The scheme economy while increasing community engagement funding. and hands on work experience, to developing a aims to encourage disadvantaged young people with art and culture. training academy and becoming an accredited to develop employability skills through the support In developing the existing pier, a more versatile training centre with additional employability and and feedback of business mentors. Based in an area which has the lowest social port infrastructure has been created to increase support projects. mobility in the country, the project intends to capacity and functionality. Specifically, work on Working in teams, young people design, develop, boost visitors to the area, create jobs and provide the pier and quay walls have created a 375-metre Its recent success is the Next Steps project which, and deliver a social action project to raise opportunities for young people. It will contain 14 deep-water berthing area, including a new with £300,000 of Magnox funding, included awareness and funds for a local charity of their studio workspaces, 2 gallery areas, a print room, 250-metre outer berth. supporting the roles of delivery manager and choice. Employees from businesses involved in the an education space, a restaurant and 5 self- training team co-ordinator at its training centre. scheme act as mentors throughout each of the 12- catering accommodation pods. A deck area and dedicated heavy lift pad also The funding also helped Môn CF to leverage further week programmes. features in the redevelopment. The project is due funds to purchase and renovate its training centre It will run a programme of events, exhibitions and to be completed in September 2021. and main offices in the town centre of Holyhead. Over the last 3 years, 127 volunteers have mentored indoor and outdoor activities for visitors, locals young people on the scheme, with 21 Magnox and school groups. Despite COVID-19 restrictions in the final year, employees having directly helped students. during 2020/21, 600 individuals were supported, 60 work placement opportunities provided, and 450 To date, 69% of young people have improved qualifications gained. During the same period, 240 their self-efficacy and 82% of young people have people were helped into work across the Anglesey improved their social confidence. area.

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Case Study - Critical enablers - Socio-economics Case Study - Critical enablers - Research, development and Innovation

Western excellence in learning and leadership project Sort and seg competition

The Western excellence in learning and leadership and language with reception-aged children. Research, development and innovation are essential Fourteen successful companies were awarded project (WELL) is an education programme, which to the mission, accounting for over £90 million of contracts, worth up to £60,000 each, as part of the aims to raise standards in every classroom in west A range of training and resources in 13 programmes annual investment across the NDA group. first phase of the competition and were then required Cumbria. designed to improve disadvantaged pupils were to produce feasibility studies for their proposals, also secured for local schools and will be complete As we move from operations to full-scale including robotics, advanced sensors and artificial Backed by £1.7 million of NDA group funding, its by July 2021. decommissioning, our research, development and intelligence. main focuses are improving the consistency and innovation strategy drives forward the need to seek solutions that are safer, more efficient and more cost- The feasibility studies were delivered in May this quality of teaching, raising pupil achievement to be The programme has helped 45 school staff from effective, while accelerating timescales. year with the winners competing for a number of in line with the UK average, improving attendance across the region receive Youth Mental Health First Aid training. contracts, each worth up to £900,000, for 15-month levels, and enhancing students’ health and One programme which was launched in July 2020, ‘demonstrator projects’. wellbeing. The project has seen significant support invited proposals for using innovative technology for During the COVID-19 pandemic, the WELL project from local schools since its launch in 2019, with 117 handling mixed radioactive wastes at the UK’s oldest Competitions like this are an important way of lessened the impact to disadvantaged students schools engaging with WELL. nuclear sites. engaging the supply chain, encouraging diversity in the area by enabling up to 2,500 breakfast of thinking and finding innovative techniques and By July 2020, at least 95% of headteachers, other deliveries per week for vulnerable children and The £3.9 million ‘Sort and Seg’ innovation competition technologies from other sectors to help deliver the teaching and support staff, and some governors in those of key workers. challenged supply chain companies to come up with NDA’s decommissioning mission. participating schools had accessed training, related innovative approaches to remotely handle and sort to pupil premium for disadvantaged children and The project also co-ordinated allocations of over radioactive waste. developed appropriate strategies for their schools. 500 redundant Sellafield laptops to 73 schools to The NDA, Magnox Ltd, Sellafield Ltd and innovation support remote learning. David Peattie agency Innovate UK announced the winners of the During the year, 55 schools received training and Accounting Officer and competition in February this year. funding for resources aimed at improving speech Group Chief Executive Officer 15 July 2021

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Accountability report

50 51 NDA Annual Report and Accounts 2020/21 NDA Annual Report and Accounts 2020/21

Pensions Governance Statement.

NDA employees are eligible to participate in the Civil Personal data Service Pension Arrangements. A small number of employees who transferred to the NDA from INS There were 3 personal data breaches in the in 2019 continue to accrue benefits in the UKAEA NDA during 2020/21. All 3 incidents were classed Combined Pension Scheme. as minor and have all been investigated fully with appropriate mitigating actions taken to Employees within the group participate in various reduce the chance of re-occurrence. None defined benefit pension schemes detailed in note were classed as reportable to the Information Directors’ report 26 to the accounts. Commissioner’s Office. Group employees also participate in various schemes Other disclosures which are accounted for on a defined contribution basis, with details given in note 26 to the accounts. Disclosures on equal opportunities, learning and development and how the NDA engages with all The NDA is an Executive Non-Departmental Public Body, Better payment practice staff are in the Remuneration and People Report on pages 86-100. established by the Energy Act 2004 to oversee and monitor the The NDA supports the Better Payment Practice Code decommissioning and clean-up of the UK’s civil nuclear legacy. Since in its treatment of suppliers with the aim of paying Details of investment in socio-economic undisputed invoices as soon as possible. The key developments, research and development and then, the NDA’s remit has been extended to include the long-term principles are to settle the terms of payment with funding, counterparty and foreign exchange risk are management of all the UK’s radioactive waste by finding appropriate suppliers when agreeing the transaction, to settle all included in the financial statements. disputes on invoices without delay and to ensure storage and disposal solutions. that suppliers are made aware of the terms of The NDA’s environmental performance is detailed payment and to abide by those terms. in the Health, Safety, Security, Environment and Wellbeing report on pages 101-106. Accounts direction Electricity North West Ltd and Director of North During the year, the NDA has achieved a 90.46% West Electricity Networks Ltd and will therefore, success rate for payment of suppliers in accordance Events after the reporting period These accounts have been prepared in a form be excluded from any involvement with Moorside with terms (2019/20 – 91.23%). The average number directed by the Secretary of State with the approval deliberations. of payment days from invoice date was 31 days and The NDA acquired the share capital of Dounreay of HM Treasury and in accordance with section 26 of for a valid invoice, (i.e. one with all details correct Restoration Services Ltd effective from 1 April 2021 the Energy Act 2004. The other members have no personal, private or and entered on the accounting system), 14 days commercial interests which present material conflicts (2019/20 - 31 days and 12 days). The proportion that On 23 June 2021 the NDA, HM Government and The Board comprises of a Non-Executive Chair, with their role as a Member of the NDA Board. A full is the aggregate amount owed to trade creditors at EDF Energy entered into new decommissioning Non-Executive Members, the NDA Group CEO and register of Members’ interests and the associated the year end compared to the aggregate amount arrangements for 7 Advanced Gas-cooled Reactor the NDA Group CFO whose details are set out in the procedure is available at: www.gov.uk/government/ invoiced by suppliers expressed as a number of days (AGR) stations in which HM Government has Governance Statement on page 60. publications/nda-register-of-directors-interests is 8.41 days (2019/20 – 23.49 days). directed NDA to take on the future ownership of the stations for decommissioning. The work will be Directors’ interests As a result of the coronavirus, COVID-19 pandemic undertaken by the NDA subsidiary Magnox Ltd. Auditor of the NDA the NDA implemented Procurement Policy Notes Members of the NDA Board must declare any (PPN) 01/20, 02/20 and 04/20 which relate to The NDA acquired the share capital of Low Level personal, private or commercial interests. A register The NDA is audited by the Comptroller and Auditor the provision of supplier relief. The PPNs set Waste Repository Ltd effective from 12 July 2021 of such interests is maintained by the NDA. General (C&AG) in accordance with the Energy Act out information and guidance for public bodies 2004. The services provided by the C&AG relate to on payment of their suppliers to ensure service Going concern Rob Holden declared a commercial interest. He statutory audit work for the NDA. No fees were paid continuity during and after the pandemic. The NDA is a Non-Executive Director of NNB Generation to the C&AG for services other than statutory audit acted promptly to ensure suppliers at risk were in a A full explanation of the adoption of a going Company (SZC) Ltd, a Non-Executive Director of work. position to resume normal contract delivery once concern basis appears in note 2.1 of the financial the lockdown restrictions were over. statements. For more information, see page 71 of the

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monthly and quarterly meetings with Government materials, the management of nuclear wastes and and regulators. There are a number of technical decommissioning of our sites more generally. forums (Nuclear Decommissioning Policy and Strategy Group and Theme Overview Groups for A copy of the revised Strategy can be found at example) which take input from subject matter https://www.gov.uk/government/publications/ experts, regulators, Government and other parties. nuclear-decommissioning-authority-strategy- Local stakeholder engagement is built around effective-from-march-2021 Section 172 statement our 17 sites and their site stakeholder groups, a large number of other standing forums and 11,000 COVID-19 people regularly engaged through our stakeholder database. Based on direct feedback from our The NDA put in place its business continuity annual survey, the communications team is looking measures to support its employees, supply The NDA sets out the issues and factors it takes account of in its at whether more can be done to engage hard chain, local communities and key government decision-making in its Value Framework, which has been revised as to reach and underrepresented groups such as stakeholders as part of its pandemic response younger people or people who have not worked in across the group. Within a matter of days from the part of Strategy 4. the nuclear industry. initial COVID-19 lockdown, the NDA implemented a plan to provide additional ICT capability and As well as the general consideration of value of view, enabling better informed decisions Board decisions are informed by the views of supporting home working guidance, facilitating for money and affordability, the NDA’s Value and creating confidence in the operation of relevant stakeholders through the mechanisms the move from office and site operations to a safe Framework provides a structured mechanism to the organisation. Given the nature of its work, set out above. For example, the Board has been home working environment. The NDA maintained consider: the NDA group has a large number and range kept updated on stakeholder feedback through a focus on the physical and mental wellbeing of of stakeholders and therefore stakeholder the various iterations of Strategy 4, the timing • Health and safety our employees with display screen assessments at engagement is an important element of the of Magnox decommissioning and plutonium • Security home, with equipment provided for each individual NDA Board and Executives’ responsibilities. The disposition. The NDA group Chief Communications • Environment need, and the provision of mental health support executives and the senior leadership groups and Stakeholder Relations Officer is invited to the • Risk/hazard reduction from internal and external staff, including Mind. represent the organisation and build an ever- • Socio-economic impacts Board and provides a strong link to stakeholders increasing understanding of stakeholders’ interests. and a specialist view of stakeholder perspectives • Finance Active consultation and monitoring took place and concerns, where relevant, at Board meetings. • Enabling the nuclear decommissioning mission at the most senior levels in the NDA covering These leaders are supported by members issues such as: remote working safety and security; Strategic decisions coming to the NDA Board build of the communications team which contains All Board members are involved in a wide-range working at sites; supply chain support programmes; in these considerations systematically and they are specialists in stakeholder engagement with a deep of stakeholder events, such as staff meetings, volunteering policy; changing grant programmes to also reflected and assured in subsequent business understanding of stakeholder organisations and engagement with Government, parliamentary giving immediate financial and personal protective case approvals. individuals. These structured engagements are meetings and site stakeholder meetings. equipment support to communities. Finally, the supplemented by roadshows and by an annual To determine the relevance of stakeholders to NDA maintained effective and timely reporting stakeholder summit. The NDA Board considers that it has acted in of our status to government and regulatory our decision-making, the NDA segments its good faith in a way most likely to promote the stakeholders into 4 broad categories: organisations, to ensure we provided an accurate For employee engagement, there are well- achievement of its decommissioning mission for the COVID-19 view within the NDA. established formal bargaining and consultation benefit of the country and having regard (amongst • External governance and scrutiny: decision- mechanisms in place to engage with trade union other matters) to factors (a) to (f) S172 Companies makers with a direct or indirect impact on the representatives. Board members also carry out Act 2006, in the decisions taken during the year Nuclear provision NDA’s ability to make decisions and allocate engagement individually to hear from people first- ending 31 March 2021. These decisions include: resources The NDA maintains and publishes the long-term • Employees, workforce and their representatives hand. Board members attend employee breakfast sessions and the Joint Consultation Group (which Adoption of NDA Strategy 4 costs of decommissioning its estate of sites (the • Supply chain and commercial partners nuclear provision) to support long-term decision- • Other influencers and opinion formers: MPs, brings together management and employee making by society as a whole. MSPs, Welsh assembly members, County representatives). There have also been virtual site The NDA has published its revised strategy on 18

Councils, Borough Councils, civil society, Non- visits which have included discussions with the March 2021 after consultation with stakeholders. Governmental Organisations, local communities Unions or other employees (e.g. Women’s Network It sets out the rationale for the approach the NDA Magnox reactor decommissioning (including site stakeholder groups), international at Dounreay). takes to decommissioning and was consulted organisations etc. on to ensure good quality decision-making in The concept, continuous reactor decommissioning, Stakeholder engagement takes place through the long-term interests of the country. During was discussed with stakeholders for more than Stakeholder engagement is an enabler to mission regular and structured contact, augmented by the consultation, there were more than 1,000 two years, in a series of workshops, briefings and delivery. It allows the NDA group to understand informal relationships. For example, formal items of feedback which informed thinking roadshows, where their comments, suggestions and issues better by obtaining stakeholders’ points decision-making in the NDA is supported by on supply chain, transportation of nuclear responses were considered and built into our plans.

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Statement of Accounting Officer’s Governance statement Responsibilities The NDA is sponsored by the Department for Business, Energy and Industrial Strategy (BEIS). UK Government Investments (UKGI) provides strategic oversight of the NDA’s corporate governance and corporate performance, working closely with and reporting directly to BEIS senior Under Section 26 of the Energy Act 2004, the Secretary of State (with officials and providing advice to BEIS Ministers. The formal agreement the approval of HM Treasury) has directed the NDA to prepare for each between the NDA and BEIS is set out in a framework document, financial year a statement of accounts in the form and on the basis set out supported by a memorandum of understanding between BEIS and UKGI. in the Accounts Direction. The Scottish Government also has a governance role, working closely with BEIS to ensure its expectations are met. The accounts are prepared on an accruals basis The Accounting Officer for the Department for and must give a true and fair view of the state of Business, Energy and Industrial Strategy has The following Governance Statement provides an Certain scopes of work require approval from BEIS. affairs of the NDA and its income and expenditure, appointed the Chief Executive Officer as Accounting insight into the corporate governance framework for Where work falls outside the NDA’s delegated Statement of Financial Position and cash flows for Officer of the NDA. the NDA and its group entities during 2020/21. authority, then it must seek approval before the financial year. commencing the work and demonstrate that it is The responsibilities of an Accounting Officer, The framework is used to measure the performance affordable, aligned to the NDA mission and provides In preparing the accounts, the Accounting Officer including responsibility for the propriety and and effectiveness of the NDA in the delivery of its value for money. is required to comply with the requirements of the regularity of the public finances for which the strategic and operational objectives. Government Financial Reporting Manual and in Accounting Officer is answerable, for keeping particular to: proper records and for safeguarding the NDA’s Board and board committees assets, are set out in Managing Public Money The NDA’s Governance Framework • Observe the Accounts Direction issued by the published by HM Treasury. The NDA Board sets the strategic framework and Secretary of State with the approval of HM The NDA is a body corporate governed through the direction for operations and is responsible for Treasury, including the relevant accounting and As the Accounting Officer, I have taken all the steps Energy Act 2004; the Government’s NDA framework ensuring high standards of corporate governance disclosure requirements, and apply suitable that I ought to have taken to make myself aware of document; and Cabinet Office guidelines for Non- at all times; sets the risk appetite; agrees plans accounting policies on a consistent basis any relevant audit information and to establish that Departmental Public Bodies (NDPBs). The NDA also against which the NDA performance is measured; the NDA’s auditors are aware of that information. aims to draw on best practice as set out in the UK and maintains an appropriate control framework • Make judgements and estimates on a So far as I am aware, there is no relevant audit Corporate Governance Code where appropriate, that provides assurances on risk assessment and the reasonable basis information of which the auditors are unaware. reporting exceptions to UKGI. This is within the application of appropriate controls. context that NDA’s value is not primarily financially • State whether applicable accounting standards metric driven and that its remuneration policy is in The Board delegates the day-to-day management of as set out in the Government Financial line with public sector guidance. the NDA group to an Executive Team, comprising of Reporting Manual have been followed, and 2 Board Members: the Group Chief Executive Officer disclose and explain any material departures in NDA’s governance, whilst effective for the previous and the Group Chief Financial Officer and other the accounts operating model, is being enhanced and will be senior executives. further strengthened as a result of the findings • Prepare the accounts on a going concern basis of recent external reviews, the revised framework The Chair of the Board is accountable for delivering document and the transition to the NDA group obligations under the Energy Act 2004 and providing • Confirm that the Annual Report and Accounts Operating Model. Work is underway in several areas effective leadership and direction of the Board. as a whole, is fair, balanced and understandable as outlined within this report. and takes personal responsibility for the Annual The Group Chief Executive Officer is responsible for Report and Accounts and the judgements David Peattie The Energy Act 2004 requires the NDA to prepare a leadership and operational management of the NDA required for determining that it is fair, balanced Accounting Officer and strategy for carrying out its functions and to prepare and is accountable to the Board and as Accounting and understandable Group Chief Executive Officer in respect of each financial year an annual plan. The Officer to Parliament for NDA activities, public funds 15 July 2021 Strategy and Annual Plan must be approved by the employed and ensuring targets are met. Secretary of State and, to the extent appropriate, with the Scottish Ministers.

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Governance statement continued Governance statement continued

The following table sets out the purpose of the Board, Board committees and Executive committees.

Board and board committee Purpose Meeting Chair Executive Committees Purpose Meeting Chair

NDA Board The NDA Board sets the strategic framework and Chair Executive Accountable for implementing strategy and plans Group Chief Executive direction for operations and is responsible for Committee approved by Board. Includes sanction and decision Officer ensuring high standards of corporate governance making. at all times, sets the risk appetite; agrees plans against which the NDA performance is measured, and maintains an appropriate control framework Executive To oversee the effectiveness and quality of the Group Director of Risk that provides assurances on risk assessment and the Audit, group risk management framework, processes and and Assurance application of appropriate controls. Risk and practices and monitor risk exposure against group risk Assurance appetite. To monitor and manage risk and assurance The Secretary of State and, to the extent appropriate, Committee mechanisms. To monitor findings from audit and the Scottish Ministers, are responsible for approving assurance reviews. To advise the Board A&RAC. the NDA’s Strategy and annual Business Plan. Finance and To review and approve annual reports and accounts Group Chief Financial Performance and recommend to the Board for approval. To review Officer The Board delegates oversight of certain risk topics Committee sanction plan and approve sanction requests within and themes to sub-committees and the day-to-day delegation and endorse onward submission where Non-Executive management of the NDA group to the executive Group Chief required. To review overhead and headcount budget Chair team, comprising the Group Chief Executive and other Executive and review group performance in preparation for Officer senior executives. quarterly performance reviews. Audit The committee provides advice and assurance to the Non-Executive Board Sanction To review and sanction work activities across the NDA Group Chief Financial estate, including programmes, projects, procure- and Risk Board on risk, control and governance. The committee Member Committee Officer ments, IT expenditure, contracts, asset disposal, and Assurance oversees audit and financial reporting, advises and investment opportunities. Further approval by the Committee reports on the plans, activities and performance NDA Board and Government may also be required. (A&RAC) of internal and external audit, and provides an Strategy To approve business and technical strategies. To Group Director of assessment of assurance reliability and integrity. The Committee review the portfolio of strategic decisions/initiatives Nuclear Strategy and committee oversees the effectiveness and quality of under development and endorse for forward Technology the group risk management framework and monitors submission to the Sanction Committee. risk exposure against group risk appetite. Nominations To consider the composition and skills of the Board, Chair Committee advise on the structure and size of the committees, (NOMCO) and assess succession planning and talent management.

Remuneration To advise the Board on remuneration, and monitor Non-Executive Board Committee performance of senior executives. Member (REMCO)

Health, To support the Board in discharging its responsibilities Non-Executive Board Safety, in respect of issues of Health, Safety (including Member Security and both nuclear and non-nuclear safety), Security and Environment Environment in the NDA group. (HSSE) This was formerly known as the Safety and Security Committee Committee (S&SC).

Programmes To advise the Board on sanction, performance and Non-Executive Board and Projects assurance of programmes and projects. Member Committee (P&PC)

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Governance statement continued Governance statement continued

As at 31 March 2021, the NDA Board comprised of 8 Non-Executive Board Members, including the The following table provides details of each Board Member’s attendance at Board and committee Non-Executive Chair and 2 executive members, the Group Chief Executive Officer and Group Chief meetings during the period 1 April 2020 to 31 March 2021. Financial Officer. The table below sets out the names of the Board members during the period 1 April 2020 to 31 March 2021, their respective terms of office and membership of Board committees.

Board Term of Office Ends/ Board A&RAC REMCO HSSE P&PC NOMCO Committee Chair Ended Total number of 10 7 6 4 9 2 meetings Non-Executive Board Members

Ros Rivaz (1) Non-Executive Chair NOMCO 31 August 2023 Non-Executive Board Members

Janet Ashdown Non-Executive Board HSSE 31 January 2022 Ros Rivaz 6 of 6 (and 2 of 4 of 4 (1) 3 of 3 (1) 2 of 3 (1) 4 of 6 (1) 2 Member & Senior 2)(1) Independent Member Janet Ashdown 10 7 - 4 9 2 Volker Beckers Non-Executive Board A&RAC 31 October 2021 (2) Member Volker Beckers 10 7 5 of 6 - - 2 Evelyn Dickey Non-Executive Board REMCO 31 January 2022 Evelyn Dickey 10 - 6 4 - 2 Member Rob Holden Non-Executive Board P&PC 31 January 2022 (3) Rob Holden 10 - 6 - 9 2 Member Alex Reeves 10 7 6 - 2 Alex Reeves Non-Executive Board Not applicable 31 January 2025 Member Francis Livens 3 of 3 (and 1 of - - 1 of 1 3 of 3 1 of 2 (part year) Nick Elliott (6) Non-Executive Board Not applicable 30 April 2021 1) (1) Member Nick Elliott 1 of 1 (1) - - - - - (part year) Francis Livens (4) Non-Executive Board Not applicable 30 November 2023 Michelle Heath 2 of 2 - - 1 of 1 2 of 2 - Member (part year) Tom Smith Non-Executive Chair NOMCO [to August 31 August 2020 Executive Board Members 2020] David Peattie Michelle Heath (5) Non-Executive Board Not applicable 30 June 2020 10 7 (1) 5 of 6 (1) 4 9 2 of 2 (1) Member Mel Zuydam 10 7 (1) - - 8 of 9 (1) - Executive Board Members Board Observer David Peattie Group Chief Executive Not applicable Not applicable Jenny McGeough 4 of 4 - - - - - Officer (part year) Mel Zuydam Group Chief Financial Not applicable Not applicable Officer

Notes: Notes: (1) Ros Rivaz was appointed to the Board on 1 September 2020 following the end of Tom Smith’s (1) In attendance only term on 31 August 2020 (2) The term of office for Volker Beckers was extended from 31 January 2021 to 31 October 2021 (3) The term of office for Rob Holden was extended from 31 January 2021 to 31 January 2022 (4) Francis Livens was appointed to the Board on 1 December 2020 (5) Michelle Heath resigned from the Board on 30 June 2020 (6) Nick Elliott was appointed to the Board on 15 March 2021 and resigned on 30 April 2021

All Non-Executive Members were independent on appointment.

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Governance statement continued Governance statement continued

Board Members Dr Ros Rivaz NDA Chair and Chair of the Nominations Committee (from 1 September 2020) (Chair Designate for 4 months prior to appointment)

Ros has been Chair of the Nuclear manufacturing and engineering Decommissioning Authority since businesses. Her current portfolio September 2020. includes non-executive, senior Tom Smith David Peattie Mel Zuydam independent director and Ros has a wide range of experience committee chair roles variously for NDA Chair and Chair of the Group Chief Executive Group Chief in executive and non-executive Defence Equipment and Support Nominations Committee Officer and Accounting Financial Officer roles in blue chip companies, (DE&S) within the Ministry of Officer predominantly in highly regulated Defence, Computacenter plc, the (until 31 August 2020) and high hazard environments, chemicals company Victrex plc both in the UK and internationally. and the specialised steel company Tom began his career in the David began his career at BP in Mel is an experienced CFO with Aperam SA. She has also held a diplomatic service, working in 1979 as a petroleum engineer a strong track record in financial Ros started her career at range of other board roles with London, Hong Kong and Beijing and, during 33 years at the change, business growth, mergers ExxonMobil, working across private and listed companies between 1979 and 1990, when company, held a number of & acquisitions (M&A) and Treasury, all business areas, with an including ConvaTec plc, Boparan he was part of the team that technical, commercial and senior and effective performance increasing focus in manufacturing, Holdings, RPC Group plc, Ceva negotiated the 1984 treaty with management positions. management in the UK and engineering and Environmental, Logistics and Rexam plc. China on Hong Kong. international infrastructure and Social and Corporate Governance His roles included Head of engineering sectors. (ESG). After some 19 years, Ros Ros also plays important roles in In 1990 he joined Trafalgar BP Group Investor Relations, progressed to perform senior roles the charity sector and academia. House plc and held several Commercial Director of BP He’s worked across the private and in international companies including She was Non-Executive Director senior positions before Chemicals, Deputy Head public sector, with organisations Tate & Lyle, ICI, Diageo and Smith of the ‘Your Life’ initiative, which becoming Managing Director of of Global Exploration and including Balfour Beatty, CH2M, & Nephew. Ros’s executive career was a Government led, industry- Midland Expressway Ltd in 1997, Production, Head of BP Group and The Highways Agency, culminated as Smith & Nephew’s sponsored campaign to increase where he led the development Planning, and finally as Head and as a CFO in both the listed Global Chief Operating Officer, take up of maths and physics and construction of the M6 Toll, of BP Russia where he was environment and with private a position she held from 2011- amongst 14-16 year-olds; Deputy the UK’s first privately financed responsible for BP’s interests in infrastructure investors such as GIC 2014. There, Ros led work on the Chair of Southampton University, toll motorway. He subsequently the TNK-BP joint venture as well and JP Morgan. group’s global transformation and was the first chair of the joined the Go-Ahead Group as its businesses in the Russian for supply chain, manufacturing, University’s HSE & Risk Audit and plc as Managing Director Rail Arctic and Sakhalin. In addition, Mel joined the NDA as Group engineering and procurement. She Assurance; and is on the board of Development and in over he was BP’s lead Director on the Chief Financial Officer in January was also responsible for regulatory the community interest company 10 years was instrumental in board of TNK-BP and Chairman 2020 matters including health, safety, Eton Community CIC. Ros was turning Go-Ahead into one of of its Health, Safety and environmental performance, IT and awarded an honorary doctorate in the country’s largest passenger Environment Committee. cyber-security; she retains a strong 2015 for services to industry and to rail operators. He was Chairman interest in all of these areas as the voluntary sector. Her interests of the Association of Train David joined the NDA as Chief reflected in her subsequent board include travelling, skiing, walking, Operating Companies from 2009 Executive Officer & Accounting roles. music and theatre. Ros is married to 2013. He was a Non-Executive Officer in March 2017 and in with 4 children. Board Member of Highways January 2020 David was invited Ros’s non-executive career has England from 2014 to 2016. to be Patron of Women in retained sector breadth whilst Nuclear, a position he was focusing principally on high hazard, honoured to accept.

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Board Members (continued) Board Members (continued)

Janet Ashdown Volker Beckers Evelyn Dickey Rob Holden CBE Alex Reeves Michelle Heath Senior Non-Executive Non-Executive Board Non-Executive Board Non-Executive Board Non-Executive Board Non-Executive Board Board Member and Chair Member and Chair of the Member and Chair of the Member and Chair of the Member and UKGI Member of the Safety & Security Audit & Risk Assurance Remuneration Committee Programmes and Projects Representative (until 30 June 2020) Committee Committee Committee

Janet worked for BP plc for Volker was Group Chief Executive Evelyn has extensive human Rob led the London and Alex is a Director in UKGI, Michelle is an experienced over 30 years, holding a Officer of RWE Npower plc until resources experience, leading Continental Railways team in having joined its predecessor business manager with a career number of local and global the end of 2012 and prior to this, design and delivery of major a series of transactions that organisation, the Shareholder spanning 20 years in the nuclear positions in fuel supply, its Group Chief Financial Officer change programmes, business secured the future of the Executive, in 2010. Alex has led a industry, holding senior positions manufacturing, oil trading from 2003 to 2009. restructuring, employee Channel Tunnel Rail Link later variety of corporate finance and within BNFL, Springfields Fuels and retail marketing. She was relations, resourcing, executive renamed High Speed 1. In 2009 corporate governance projects for Ltd and Toshiba Westinghouse. a senior leader in BP, running He has worked as senior remuneration, organisational he was awarded a CBE for Government, in sectors including She has a range of operational, their UK retail and commercial leader in RWE’s regulated capability and performance services to the rail industry. aerospace, technology, steel, real radiological, commercial and fuel business in her last role. and non-regulated divisions management initiatives. estate and asset management. strategic experience and has internationally, grid (transmission Rob is a chartered accountant focused her career on nuclear Janet was, until the end of and distribution level), retail, Evelyn has worked in HR with a career background of He currently leads on inward waste and residue processing. 2012, Chief Executive Officer of generation (including nuclear, consultancy and as HR Director managing long term projects M&A and other corporate finance Michelle is well versed in the Harvest Energy Ltd. conventional and renewable (HR Operations) for Boots including the Trafalgar and projects and runs UKGI’s Non- challenges of managing this energy) and midstream the Chemist, before joining Vanguard classes of nuclear Executive Director Forum. material, and as Global Product businesses. Severn Trent’s HR function in powered submarines and Manager for Residues’ Treatment November 2006, retiring as Crossrail. He now combines his for Westinghouse, has had Since 2013 Volker has held non- Director of HR in 2017. non-executive role with advisory many successes in developing executive roles in the public assignments on transport and processing options for a variety and private sector as well as defence projects both in the UK of waste types for a diverse range academia and charities. and overseas. of international stakeholders.

Since April 2018, Michelle has been self-employed. Michelle resigned from the Board on 30 June 2020.

A full register of Board members interests and associated procedures is maintained and available to view at: www.gov.uk/government/publications/nda-register-of-directors-interests

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Governance statement continued Board Members (continued) Board Performance

Corporate governance compliance The NDA is committed to having a diverse Board in terms of gender, experience, skill, knowledge The NDA supports high standards of governance and background. The biographical details of the and where appropriate, given the size, status Board members together with details of the senior and complexity of the organisation, the NDA independent member can be found on pages 62- has continued to develop its governance taking 66 account of the principles set out in the Government Code of Corporate Governance and Government All Board and Board Committee meetings held guidance for an arm’s length body and Body during the year have been quorate. All decisions Corporate. The NDA also aims to draw on best made by the Board and its committees have been practice as set out in the UK Corporate Governance recorded appropriately. The Board reviews the Professor Code where appropriate, reporting exceptions to effectiveness and the terms of reference of each of UKGI acting as shareholder. Francis Livens its committees in line with best practice. Non-Executive Board Member Work on the Codes will take place in parallel The Non-Executive Board Members bring a wealth (from 1 December 2020) with further developments under the One NDA of experience and complement the executive framework and the BEIS Departmental Review of its representation on the Board in the provision of governance. Francis is a member of the Nuclear challenge, scrutiny and support on operational and Innovation & Research Advisory strategic matters. Key focus areas for the Board regarding Board advising Government, as well governance this year have included: as the Office for Nuclear Regulation The Board has a collective responsibility for • The appointment of a new Chair Independent Advisory Panel. He setting the strategic direction and the effective • Transitioning to a group ownership model has also performed numerous management of the NDA’s affairs and ensures that • Reviewing risk areas and mitigations in line with other important advisory roles in it complies with the requirements of the Energy Act the agreed risk appetite the UK and internationally, as a 2004, the Framework Document, Cabinet Office • The introduction of the Group Leadership Team recognised expert in radiochemistry Guidelines for non-departmental public bodies and • Taking an active role in stakeholder relations in particular plutonium and nuclear other statutory and contractual obligations. and seeking greater engagement with the materials. workforce As Director of the Dalton Nuclear The Board provides effective and proactive Institute, he is responsible for co- leadership within a robust governance framework A S172 statement is set out on pages 54-55. Key ordination of nuclear research and of clearly defined internal controls and risk engagements have included employee breakfast education across The University management processes. The Board sets the NDA’s sessions, attendance at the Joint Consultation of Manchester. He is particularly vision, values and standards of conduct and Group and site visits. focused on the linkages between behaviour. science and engineering and Improvements to the internal governance humanities, addressing the The unitary nature of the Board means that Non- framework have included: societal, cultural and organisational Executive Members and Executive Members • A revised Framework Document to be issued aspects of implementing nuclear share the same responsibility to challenge Board • Having greater regard to the UK Corporate technologies in modern societies. decisions and development of the NDA’s Strategy Governance Code He is also Nuclear Theme Champion and operations. The Board delegates operational • An external effectiveness review (more at the Henry Royce Institute. management and execution of the strategy to the information on page 69) Francis is a Fellow of the Royal Group Chief Executive Officer and the Executive • An improved induction process for new Society for Chemistry and Member Team and has established a governance committee members of the Institute of Strategic Studies. structure to provide it with assurance that it is • Strengthening the HSSE Committee remit discharging its responsibilities. Further considering the roles and responsibilities of key individuals

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Board Performance (continued) Board Performance (continued)

All Board members have full and timely access to Board performance The Board undertakes an annual evaluation of its Clarity of roles and accountabilities relevant information to enable them to discharge effectiveness. • Board composition priorities and planning their responsibilities. The Board places particular and effectiveness review • Subsidiary governance (clear line of sight) emphasis on the quality and integrity of the data Throughout 2020/21, progress was maintained and assurance submitted for its use. Critical processes and outputs In March 2021, the Board received the final on the findings from previous reviews including fall within the control of the NDA Assurance report from the Magnox Inquiry. Work is actions to address: The Board will continue to review the output Framework and are subject to peer review and/ underway to carefully review and implement the and action plans over the course of 2021 by or independent review by the NDA internal audit recommendations from this report. • Changes to the composition of the Board to recognising the strengths and addressing function which reports to the Audit and Risk strengthen and further improve effectiveness any weaknesses and will undertake a further Assurance Committee. Significant change has been introduced since the • Improvements to the business case and effectiveness review during 2021/22. interim report in 2017 and the NDA will build on sanctions process and The Board met 10 times during the year. Due this in light of the findings and recommendations • A revised board induction programme The Chair undertook the annual performance to COVID-19, these meetings (and Committee of the final report. More recently, the NDA has appraisals of the Non-Executive Board Members meetings) have been held using secure, online received the BEIS Departmental Review report and Collective assessments by the Board during during March 2021. systems and technology. the findings and recommendations are now being 2020/21 agreed that findings are being acted analysed by the management team and relevant upon and good progress is being made in all key The senior independent member led the annual At each of its meetings, the Board reviews key subject matter experts. The NDA’s responses to areas. appraisal of the Chair’s performance during performance information, including reports on the both of these reports will be published later in the March 2021. NDA’s group performance, operational activity, year. Recognising the importance of these external An interim internal effectiveness review was financial position, forecasts and sensitivities and insights, the Board is fully engaged with this work. undertaken in July 2020 prior to the arrival of the The Board were unable to undertake the delivery of its strategic direction. new Chair. The following actions were identified usual number of site visits, but individuals and The publication of these reports will also and continue to be progressed: groups have benefited from ‘virtual’ site visits to Key discussions for the Board this year have permit the NDA to respond to the remaining Sellafield, Dounreay, Oldbury and Berkeley. included: recommendations from the 2018 Public Accounts • Proactive engagement with stakeholders The Chair has visited (in person) Sellafield, LLWR, Committee reports regarding Sellafield and • Delivery of One NDA overarching governance Harwell and the PNTL terminal at Barrow-in- • Response to COVID-19 Magnox. These recommendations require the NDA framework Furness and (virtually) the Magnox sites at Wylfa • One NDA and group development to have received and understood the content of • Completion of the revised Framework and Trawsfynnyd. • Advanced Gas-cooled Reactor (AGR) the reports and the development of the responses Document; and transaction can now be undertaken. NDA is working with BEIS • Delivery of improved processes around • Cyber risks and others to respond to these recommendations reporting and transparency of group and will submit our response within the 6 month performance and financial reporting The proceedings at all Board and committee timeline. meetings are fully recorded through a process that An external effectiveness review by Boardroom allows any Members’ concerns to be recorded in In addition the NDA continues to progress the Review Ltd was conducted during Q4 of 2020/21. the minutes and assurances provided. The redacted recommendations from the 2020 National Audit The review included one-to-one interviews Board meeting minutes are published on the NDA’s Office and Public Accounts Committee reports on on identified priorities with individual Board public website. The Board ensures that a balanced the management and termination of the Magnox Members and consideration of key governance assessment of performance is reported to BEIS and contract. documents. A workshop was held during the regularly reviews the main group strategic risks March 2021 Board meeting. The key actions and facing the NDA group. priorities were identified as:

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During the year, the A&RAC has: arrangements and substantive testing of the support payments made to suppliers; • Established a virtual forum to facilitate the • Supported the development of the compliance Board Committees sharing of challenges and good practices function and Speak-Up Policy throughout the pandemic, allowing a proactive • Received regular updates on Speak Up (whistleblowing) issues, reviewed key matters The Board has 5 committees: Audit and Risk Each committee is chaired by a Non-Executive and collaborative approach to emerging raised via speak up reports and ensured Assurance Committee (A&RAC); Nominations Board member. The Group General Counsel and risks. Topics included business continuity and the procedures allow proportionate and Committee (NOMCO); Remuneration Committee Company Secretary attends all meetings. Each resilience, the emerging and heightened risks in independent investigation of such matters, as (REMCO); Health, Safety, Security and Environment Committee reports directly to the Board by way of areas such as fraud and cyber and the impact on well as appropriate follow up action Committee (HSSE); and Programmes and Projects a committee Chair’s report and access to minutes. people • Approved an updated Speak-Up Policy and Committee (P&PC). Urgent matters are escalated by the committee • Focused on information management and introduced a Compliance & Ethics Committee to Chair to the Board as appropriate. security in particular cyber risk and the General support the triaging and handling of concerns. Each committee membership is made up of Data Protection Regulation, and improvements A Group Chief Compliance & Ethics Officer was Independent Non-Executive Board Members. If Substantial additional governance has been to commercial contract management systems also appointed, to strengthen the group wide Executive directors are also members of a Board undertaken on the AGR transaction. This has been • Provided oversight on the further development approach Committee then the majority members on the at Board level, supported by a Steering Committee of the NDA’s Risk and Assurance Frameworks • Ensured that the NDA accounting practices are in committee are Non-Executive Board Members and Executive Decision Group. • Supported the ongoing development of the line with BEIS and HM Treasury guidance; and maintaining the majority of votes. Group Internal Audit Target Operating Model • Had oversight of the assurance of the supplier • Ensured the NDA met all financial reporting payment scheme including a group-wide Internal obligations Audit review of the PPN02/20 and PPN04/20 Audit and Risk Assurance Committee (A&RAC) control design and operating effectiveness Number of meetings in the year: 7 • Group Chief Executive / Accounting Officer • Group Chief Financial Officer The A&RAC consists of 3 Independent Non-Executive • Group Director of Risk and Assurance Nominations Committee (NOMCO) Board Members: • Group Chief of Staff and Security Officer Number of meetings in the year: 2 The following persons may also attend committee • Group Head of Internal Audit meetings at the invitation of the Chair: • Volker Beckers (Chair) • Group Chief Compliance Officer The NOMCO consists of 7 Independent Non-Executive • Group Chief Executive/Accounting Officer • Janet Ashdown • Head of Financial Operations Board Members including the NDA Chair. • Group Chief People Officer • Alex Reeves (from March 2020) • External Audit Representation (NAO) The following persons may also attend the • Representative from Government Internal committee meetings: Audit Agency (GIAA) • Standing Advisor (Bruce Martin was appointed in • Chair of BEIS A&RAC The NOMCO considers the composition and skills • Reviewed the timings of Non-Executive Board August 2020) • Chairs of the SLC A&RACs of the Board and senior executives, advises on the Member terms of office and the appointment of • NDA Chair structure and size of the committees, and assesses further Non-Executive Directors succession planning and talent management. • Reviewed succession plans in the NDA Corporate Centre and NDA group • Reflected on the diversity of the Board and the The A&RAC is made up solely of Non-Executive • Assurances relating to the management of risk During the year, the NOMCO has: NDA Corporate Centre. Board Members with relevant sector experience and and corporate governance requirements for ensures continuous monitoring of the effectiveness • Been informed about and welcomed the the NDA as an organisation; anti-fraud policies, introduction of a Leadership Academy and of the financial and risk assurance control frameworks Speak up processes and arrangements for special Standard established by the NDA. investigations • Proposals for tendering for either internal or Remuneration Committee (REMCO) external audit services or for purchase of non- The A&RAC is accountable for and Number of meetings in the year: 5 • Group Chief Executive / Accounting Officer audit services from contractors who provide audit advises the NDA Board on: except for discussion in relation to their own services; the accounting policies, the Annual Report The REMCO consists of 4 Independent Non-Executive remuneration. and Accounts, matters arising from the external • The effectiveness and quality of group risk Board members: • Group Chief People Officer except for discussion audit, and management’s Letter of Representation in relation to their own remuneration. management framework and monitors risk to the external auditors • Evelyn Dickey (Chair) • NDA Chair exposure against group risk appetite • The plans, activities and performance of internal • Rob Holden • NDA Non-Executive Board Members • The strategic processes for risk management, • Volker Beckers • NDA Head of Reward and external audit information risk management, control and • Alex Reeves • The adequacy of management response to issues governance within the core NDA, and across the Further details on the work of the REMCO is contained identified by audit activity, including the External wider NDA group The following persons may also attend the in the Remuneration Report on pages 86-100. Auditor’s Management Letter committee meetings:

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Board committees continued Board committees continued

From time to time, and as considered necessary, the The Committee also receives and commissions Committee will receive reports from group businesses independent reports from NDA’s in-house HSSE and Health, Safety, Security and Environment (HSSE) Committee on events and accidents. This year, the Committee security and resilience teams, including trend analysis and received detailed reports from Sellafield Ltd regarding the reports of work undertaken by the NDA to promote high Number of meetings in the year: 4 The following persons may also attend the committee electrical incident, including a presentation on the Board standards and encourage collaboration. meetings: of Inquiry Report. The HSSE Committee consists of 5 members • Per Lindell – Standing Advisor (3 of which are Independent Non-Executive • NDA Chair Board Members): • Group Director of Risk and Assurance • Director of Health, Safety and Wellbeing • Janet Ashdown (Chair) • Director of Environment • Evelyn Dickey • Group Chief of Staff and Security Officer Programmes and Projects Committee (P&PC) • Michelle Heath (until June 2020) • Head of Security and Resilience • Francis Livens (from January 2021) • Regulators (attend once per year) Number of meetings in the year: 9 • David Peattie (Group Chief Executive & • David Peattie (Group Chief Executive & • Group Chief Financial Officer Accounting Officer) Accounting Officer) • Site Licence Company representatives The P&PC consists of 5 members, 3 of which are • Alan Cumming (Group Chief Operations and • Alan Cumming (Group Chief Operations and (specific items) Independent Non-Executive Board Members: Performance Improvement Officer) Performance Improvements Officer) • Chairs of the SLC S&SCs • Rob Holden (Chair) The following persons may also attend committee meetings: The HSSE Committee supports the NDA Board in NDA group, including presentations and updates • Janet Ashdown discharging its responsibilities in respect of issues of from SLC representatives on issues, action plans to • Francis Livens (from January 2021) • Group Chief Financial Officer health, safety including both nuclear and non-nuclear prevent recurrence and lessons learned • Michelle Heath (until June 2020) • Group Director of Risk and Assurance safety, security and environment in the NDA group. • An external perspective on relevant good practices • Head of Sanction and industry trends, including recommendations as The responsibility for these issues within the NDA group to when and where the Board should seek advice lies with the Site Licence Companies (SLC). In particular, the SLCs have unambiguous responsibility for health, safety, security and environment on their sites. However, During the year the HSSE the NDA Board has a duty of care over the performance Committee has: The Programmes and Projects Committee provides of its whole group in line with its governance framework During the year, the P&PC has: additional oversight and scrutiny of major programmes and, in particular, must be assured that the SLC’s are • Had oversight of the group response to and lessons and projects within the NDA group. The Committee discharging their responsibilities properly. learned from COVID-19 and a particular focus on • Provided oversight to and advised the Board on supplements Board oversight; it is not intended to mental health issues several major business cases including those related supplant it. Security and resilience includes business associated • Undertaken ‘virtual’ visits to NDA sites at Sellafield, to the transition to One NDA functions such as information governance, Cyber Security Dounreay, Oldbury and Berkeley to review • Reviewed the impact of COVID-19 on productivity and ICT. performance and discuss safety with site staff The P&PC advises the NDA and costs across the group • Engaged with the Office for Nuclear Regulation • Provided oversight of sanction and assurance (ONR), inviting senior representatives to provide an Board on: improvements The HSSE Committee advises the assessment of NDA’s current security status and point • Provided oversight of completed assurance in • Progress of major programme and projects against to areas of interest for the future support of impending board decisions and forward NDA Board on: approved business cases and funding • Encouraged the NDA’s development of performance assurance in support of later board decisions • Assurance that emerging issues concerning major • HSSE performance in the NDA group (current and indicators and a sustainability policy including a focus programmes and projects are understood and that projected), including sustainability, health and on the carbon net zero target; and mitigations are being appropriately pursued wellbeing and future plans • Had oversight of improvements to Health, Safety • Outcomes of assurance reviews (internal or external) • Detailed summaries of safety, security and other and Wellbeing Policy Policy reviews and the and progress against actions plans to address any information supplied to the NDA Board recommendations from the Cross Estate Significant issues raised in these reviews • Regular reviews of the HSSE information provided on Event Review • The forward plan of programmes and projects/ the NDA group, including key performance indicators business cases coming to the Board for approval and periodic reviews of supplier HSSE arrangements The Committee’s routine business this year has been to

• Assuring the NDA Board that the HSSE culture is scrutinise the management of health, safety, security, supportive of NDA’s stated ambition environment and wellbeing risks and performance across • Assurance, or reviews and reports if applicable, the NDA group. Performance is benchmarked against in relation to the findings of investigations into relevant industry sectors. significant incidents and audit findings within the

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Governance statement continued Governance statement continued

Executive leadership team Executive leadership team

David Peattie Mel Zuydam Alan Cumming Kate Ellis Neil Harnby Jeremy Harrison Group Chief Executive Officer Group Chief Group Chief Operations and Group Chief Commercial Group General Counsel Group Director of Risk & Accounting Officer Financial Officer Performance Improvements and Business Development and Company Secretary and Assurance Officer Officer

Board and Executive Board and Executive Executive Team Member Executive Team Member Executive Team Member Executive Team Member Team Member Team Member For more information see page 63 For more information see page 63 Alan joined the NDA as Group Kate joined the NDA in November Neil is a senior executive lawyer, Jeremy joined the NDA in October Director of Nuclear Operations in 2017 from the Ministry of Justice, general counsel and company 2018, following 4 years at HS2 Ltd. April 2018. He has responsibility for where she was Commercial secretary with more than 25 years all operations, including health and Director for Her Majesty’s Prison of international experience. Jeremy worked in the rail industry for safety. and Probation Service. Kate brings 22 years. He pioneered early thinking a wealth of valuable commercial Neil joined the NDA in October on safety risk and then went on to A Chartered Civil Engineer and a knowledge and experience to NDA. 2019 and brings a wealth of lead on project and corporate risk. Chartered Structural Engineer, Alan experience, from advising and This included setting the standards completed his nuclear training at Previously, Kate was with BP for 22 working with organisations and policies for risk management Massachusetts Institute of Tech- years. She held several senior roles including Royal Mail and General and value management, across the nology in Boston and has an MBA with the organisation, including Electric. infrastructure projects on the national from Strathclyde Business School in Commercial Director of BP rail network. Glasgow. Shipping. Jeremy chaired the UK Risk Before joining the NDA, Alan was Management Committee for BSI and Capital Projects and Engineering supported Government initiatives Director for Viridor, part of Pennon, to improve risk management across Deputy Project Director for EDF major projects. Energy’s New Build Nuclear Pro- gramme and Director of Projects for British Energy.

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Governance statement (continued) Governance statement (continued)

Executive leadership team Executive leadership team

Frank Rainford Dr Adrian Simper Duncan Thompson Paul Vallance David Vineall Group Chief of Staff and Group Director of Nuclear Director of Group Group Chief Communications Group Chief Security Officer Strategy and Technology Development & Stakeholder Relations Officer People Officer

Executive Team Member Executive Team Member Executive Team Member Executive Team Member Executive Team Member

Frank joined the NDA in February Adrian joined the nuclear Duncan has a mechanical and Paul began his career at BNFL, David has a wealth of experience 2017. He has responsibility for industry in research and environmental engineering becoming Group Communications within the industrial sector Security, Cyber, Digital, ICT and other development at Sellafield. His background with management Director. He joined the NDA in June having held a series of senior corporate services, as well as co- subsequent career has included experience gained over 27 2016 from Rolls-Royce, where he held HR leadership roles in TATA ordinating group development and strategic roles in research and years in the UK and overseas. a number of senior positions. Steel in Europe, BAE Systems development, technology, He has worked for The London One NDA. and GEC Alsthom. Roles have project delivery, commercial and Stock Exchange, Ford, British Paul was part of the executive team included HR Director for the finance both in the UK and the Overseas Aid and Unicef and as a Prior to joining the NDA, Frank spent that established Rolls- Royce’s TATA Steelmaking Operations US. management consultant he worked 3 years as the executive responsible with companies including National nuclear sector, which included both in South Wales and HR Director for the GE Aviation Aerostructures Adrian joined the NDA in Grid Transco, Railtrack and BP. the Civil Nuclear and Submarines for Shipbuilding and Support business in the UK and previously October 2005, he is also the NDA businesses. Paul was also the business across Glasgow and spent 21 years with BAE Systems and Group Mental Health Champion. From 2014 he led the work to customer lead for a number of Portsmouth within BAE systems. predecessor companies in the UK bring Sellafield in as a subsidiary Rolls-Royce’s key commercial and Saudi Arabia, holding several He was appointed to the Order of the NDA and then, as Sellafield relationships. David joined the NDA in April senior roles including Transformation of the British Empire (OBE) in Programme Director, embedded 2014 and plays a leading role in and Project Management Director. the 2017 New Year Honours’ list, and ran those subsidiary skills as a Board member for the Frank studied at Lancaster University recognising his services to the UK arrangements. ECITB (Engineering Construction gaining an MBA and MSc in Project nuclear industry in Japan. Industry Training Board), deputy In April 2019 Duncan took on the Management chair for the Nuclear National new role of Director of Group Skills Strategy Group and vice Development, responsible for chair for the National College for development and implementation of a group structure that best Nuclear. delivers our mission.

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Governance statement (continued) Governance statement (continued)

Executive committees Sanction Committee will scrutinise proposals and responsibility are identified, managed and reported. NDA businesses present their top risks and explain advise the NDA Accounting Officer, and where The responsibilities of our site licence companies are their management of them through the Quarterly The Group Chief Executive and Accounting Officer appropriate the NDA Board and BEIS Projects defined clearly through the regulatory framework. Performance Review process. In addition, the NDA is responsible for leadership and operational Investment Committee if above the NDA Accounting The NDA requires all parts of the group to align risk Corporate Centre risk team is engaging in additional management of the NDA and is accountable to the Officer’s delegation from the BEIS Principal processes, appetite, procedures and documents challenge and assurance in relation to risks across Board and Parliament for implementing the strategy Accounting Officer. to enable a consistent picture of the group’s risk the businesses. and plans approved by the Board and BEIS. landscape and profile. Risk management These may be subject to Board Committee deep The Group Chief Executive and Accounting Officer The identification and management of strategic dive, an example being a particular safety risk from is supported by an Executive team (the ‘Executive’) Effective management of risk enables us to achieve and delivery risks, demonstrates that the NDA has our Sellafield business. comprising of: Group Chief Financial Officer; Group our mission of decommissioning the UK’s nuclear robust planning, forecasting and control of risks. The Strategy and Technology Director; Group Chief legacy safely, securely and cost-effectively. effectiveness of control and response to these risks Horizon scanning and emerging risk Operations and Performance Improvements Officer; Risk management is a key decision-making tool for is supported by our assurance function and internal Group Chief People Officer; Group Development the NDA group. This allows us to proactively identify audit function. These risks are used in prioritisation Our overarching risk management framework Director; Group Risk and Assurance Director; Group the opportunities and threats that are relevant to for our internal assurance plan (IAP) and the group provides for the recognition and escalation of Commercial and Business Development Officer; our business. To achieve our business objectives, internal audit activities. emerging risks. Our collaborative work across the Group Chief Communications and Stakeholder requires minimising and managing the impact of NDA group businesses, with the Heads of Risk, Relations Officer; Group Chief of Staff and Security risks and ensuring that the risks are considered Risk hierarchy has developed significantly this year as well as Officer; and Group General Counsel and Company proportionately when taking business decisions. corporate centre focus with Risk Champions. This has Secretary. Biographies of each can be found on Embedding risk management at the heart of our The NDA has been developing and enhancing the included collective identification of joint risks and pages 63 to 66. decision making will be achieved by establishing a Group Strategic Risks (GSRs), these risks are the sharing on emerging / evolving risks. Workshops positive risk culture, where open and transparent principal risks to the NDA group. The criteria for have been held with the executive team using The Executive has in place a meeting governance discussion of risk forms part of everyday business. consideration are as follows: OpCo input, industry literature, and various other structure that aligns with that of the Board and the We will lead this by: pertinent sources of data to further embed horizon roles of each are set on pages 58-59. The Executive • Short, medium & long term risk scanning into the business, ensure we are resilient Committees meet monthly over a two-day period. • Providing a supportive environment • Risks to the existence of NDA group to future impacts of threats, and in a good position where people can have open collaborative • Risks to fundamental mission delivery to embrace opportunities. This will continue as the Financial control conversations about our risks and feel • Cumulative / aggregated / portfolio effects group-wide risk management framework matures. comfortable escalating risks and concerns • Proximity of risk occurrence – (considering last The NDA has strong financial controls to ensure it • Regularly discussing our risk appetite by actionable date) Risk Deep Dives remains within its budgetary spend for 2020/21 of understanding the effort required to manage the £3.5 billion. It has well-defined delegated authority risk, so that our people are empowered to seek Risks which impact more than one area of the group We undertake a rolling schedule of deep dive and a clear budgetary framework. The system business opportunities and be innovative and may require ownership or coordination from the reviews of GSRs, that examine all aspects of the risk. remains effective with no significant issues identified creative group. These could include: Over the past year our Board subcommittees have by internal or external audit during the year. • Ensuring that our people have the skills and reviewed six GSRs. During this year we have utilised knowledge to manage risks effectively; and • OpCos risks which also have a direct impact on expertise from across the group including NEDs We have a policy and procedures designed to • Ensuring that key risks are visible, owned, other OpCos within the NDA group or the NDA from subsidiaries. ensure compliance with the UK Bribery Act, which actively managed and prioritises support where Corporate Centre (e.g. DRS disruption impacting we continue to review and enhance to ensure that it’s most needed transport of nuclear waste) The involvement of Non-Executive Directors (NEDs) the risks we face are appropriately addressed and • Similar OpCos risks held in multiple OpCos and other independent experts brings external mitigated. Copies of these policies and procedures The effective management of risk (threats and where a central collective risk can be more industry and technical best practice to the in-depth are available on our website. opportunities) is critical to the successful delivery of effectively managed (e.g. Brexit). reviews of these risks. Recommendations are made the NDA mission and to support this, NDA aligns its • Risks which have a cumulative impact across the as to how to enhance the understanding of the risk Programmes and projects across the group are own principles to that of the BEIS Risk Management group – multiple correlated impacts (e.g. delays including controls and responses. controlled through Operating Companies (OpCo’s) Principles. to Geological Disposal Facility (GDF) own governance and assurance processes, overseen • The GSRs and associated controls are recorded by their Boards. Where a programme or project is The Board is ultimately accountable for NDA in the table below above the delegation given to the OpCo Managing risks. All staff across the NDA group businesses Director by the NDA Accounting Officer, the NDA have a duty to make sure risks in their areas of

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Ref Why they matter to us How we are responding

Group strategic risks 7 Major incident at an NDA site leading to large scale release of Our comprehensive controls across the Group align with nuclear or chemical material to the environment legal requirements and international recommendations. The aim of our mission is to complete the clean-up of our legacy sites REPPIR 2001 and COMAH regulations establish a Ref Why they matter to us How we are responding and release them for beneficial reuse. Due to its nature and scale, the framework for the protection of the public through delivery of our mission remains subject to significant uncertainties emergency preparedness for radiation emergency 1 NDA business performance The NDA is currently transitioning to a simpler operating model. and complexities. The risks and hazards the NDA manages are premises and specified transport operations. It is important to stakeholder confidence that the NDA The NDA group, is made up of a Corporate Centre with subsidiary amongst the most challenging anywhere in the world. Internationally We are continuously improving our understanding of the environmental impact of the mission, with plans in place group delivers on its commitments and achieves successful companies (OpCos) Each subsidiary is accountable for operating there are few programmes of the same scale and complexity. There is relentless focus is on avoiding a major incident which causes a large- to protect and enhance, reducing our impact as far as is performance. These commitments are about delivering the and managing the Sites and or businesses through their Boards. scale release to the environment either due to a failure in an asset, a reasonably practicable. agreed strategies, to target and as planned, projects within The One NDA approach seeks to simplify and standardise fire, explosion, or other initiating cause. timescales and budgets, procurements successfully and to arrangements to provide opportunity for enhanced business The NDA maintain a health, safety and wellbeing regulatory requirements. performance. 8 Safety / security system failure - insider and external threat The Energy Act 2004 requires the NDA to put in place measures for integrated improvement programme. This aligns with UK A significant shortfall in achieving these expectations and The strategic outcomes are defined and publicly reported. The the safety of people, secure the adoption of what we consider to Regulations whilst continuously improving performance commitments may undermine this confidence and damage NDA mission is now more visible and measurable to stakeholders. be good practice and give encouragement and support to activities through development of NDA integrated management reputation. The clear communication of these commitments, with a good that benefit the social or economic life of communities living near system processes and activities. A significant focus, explanation of what the mission is about and its complexity, helps our sites. Security is a fundamental element of all civil nuclear particularly during COVID-19, is our championing of stakeholders understand what the NDA group is delivering and operations. The NDA is committed to protecting nuclear facilities, mental health and wellbeing. We continue to deliver our how successfully. information, materials in use, storage, and transit, to meet all legal mental health and wellbeing improvement programmes. and treaty requirements. Examples requirements are, Nuclear The 5-year Security and Resilience (SAR) plan seeks 2 Integrated Waste Management The implementation of our Integrated Waste Management Industries Security Regulations 2003 and the International Atomic to establish and deliver innovative SAR solutions NDA may be unable to satisfactorily deliver its mission Programme is an enabler to the creation of new routes of effective Energy Agency Convention on the Physical Protection of Nuclear providing enhanced pragmatic and flexible approaches to decommission the UK’s nuclear legacy safely, securely and efficient disposal of waste. We continue to drive technology Material. to maintaining and supporting secure sites and working and cost-effectively, due to the management and disposal development and are leading industry groups to coordinate waste environment. requirements for the radiological waste. Disposal of such treatment opportunities for thermal treatment technologies, waste is highly sensitive and subject to UK Government encapsulation techniques and the effective management of 9 External Environment Impacts on Nuclear Reputation NDA Group response depends on the proximity and policy direction and funding. problematic radioactive wastes. To enable further efficient The NDA’s mission to decommission the UK’s nuclear legacy safely, impact of the event on the NDA estate. Group controls delivery, we are establishing a new Waste Division, bring together securely and cost-effectively relies significantly on the continued align with legal requirements and international RWM and LLWR. support of stakeholders, particularly the UK government and public. recommendations. Post the response phase, emergency An external nuclear event, over which the NDA has no control, may preparedness moves to the recovery phase, and strategies 3 Resource capability & capacity Our dedicated centre of excellent ‘One NDA Leadership Academy’ challenge stakeholder support and force the NDA to respond. If this are adjusted to account for the consequences of any The NDA mission is long term and requires the strategic has been initiated to future proof our leadership capability to is perceived as being in an inappropriate manner, it may amplify any external nuclear event. The NDA has improved their enabler of having the right people with the skills at the deliver the mission. impact from the external event. This may also delay or change our response plans following a review of the NDA’s response right time and place. The NDA needs to attract, retain and To grow our pipeline of internal talent we focus on school mission with significant cost increases. to COVID-19. develop a high performing, highly skilled, talented and engagement strategies and continue our commitment to 10 NDA Response to Cyber Threats The Civil Nuclear Cyber Security Strategy, published by motivated workforce and create a culture in which people apprentices and graduates to excite the next generation and those The government assesses cyber-attacks on the UK as a major threat BEIS in 2017, set out a path over 5 years to keep the sector can thrive. who influence their career opportunities. to national security. Nation states and organised cyber criminals ahead of the rapidly evolving threats. A clear purpose, strong development culture and excellent continue to target UK citizens and industry. The UK government’s To ensure alignment, the NDA’s group-wide Cyber learning opportunities, support the retention, engagement and National Cyber Security Centre has publicly highlighted the unique Security Resilience Programme’s strategy is to ensure career development, of the high-quality teams required. threat to the UK energy sector, with more specific advisories a more secure and resilient estate with a collective concerning civil nuclear. Cyber security and resilience are a UK, BEIS defence through the sharing of knowledge, skills and and ONR security priority and fundamental to the NDA’s mission and costs. Continued growth of NDA Group’s capabilities, 4 Supply Chain capability & capacity We continue to build a robust commercial capability which objectives. NDA’s operating companies are legally accountable to to positively shape the defence of critical national The NDA relies significantly on its supply chain to deliver maintains a resilient, sustainable, diverse, ethical and innovative their regulators to manage this risk. Inability to respond and recover infrastructure across the UK nuclear industry and the projects and programmes. The supply chain needs to supply chain, that optimises value for money for the UK taxpayer effectively from a cyber-attack may lead to a wide range of impacts wider energy sector. This is being achieved through depending on the nature and severity of the compromise. providing a modern, cost-effective, and secure technical have the capacity and capability to support the NDA’s when sourcing goods and services. infrastructure. targets, programmes and ultimately the mission. A shortfall Our group collaboration has enabled us to identify cross-Group may mean being unable to deliver HMG policy/ targets, synergies, sustainable procurement, while supporting the move to 11 COVID-19 The NDA group response to the pandemic has been increased government interest and reduced value for money net zero greenhouse gas emissions. Maintaining nuclear safety has been the fundamental priority dynamic aligned to government guidance. Lessons have during the global pandemic. This has been ensured by maintaining been learned, captured, communicated and embedded for the UK taxpayer. The resilience of government agencies COVID-19 and Brexit have been the key threat to supplier minimum manning levels, whilst managing the impact to the wider throughout the group. Weekly stakeholder and regulator to supplier problems has recently been tested e.g. the failure vulnerability over the past year. Dynamic risk management has group and business continuity. communication, business continuity, resilience forums and of Carillion and COVID-19. allowed targeted and swift actions. A residual risk still remains, key risk indicators were established early in the pandemic. and close monitoring of suppliers’ financial vulnerability continues. These are continuously monitored to enable risk-based decision making. 5 Funding prioritisation We have maintained focus on improving mission delivery as we Numerous staff and supply chain personnel were The importance of the NDA mission in dealing with the seek to reduce decommissioning costs in line with the ambition identified as ‘key worker’ status. Focus was to maintain UK’s nuclear legacy, is reflected in continued investment for the Nuclear Sector Deal. This value for money demonstration minimal manning levels. Remote working has enabled and support for safe and secure nuclear operations and helped to maintain stakeholder support in prioritising NDA continued mission delivery, with a focus on personnel decommissioning activities across the group. NDA’s annual expenditure and is reflected in NDA Spending Review 2021. wellbeing through a series of ongoing mental health spending is set by UK Parliament, combining government The NDA continues to explore all available options to optimise awareness campaigns. Improve ways of working have been identified out of grant with income from our commercial activities. This year revenue from existing assets. This includes working with BEIS to the response to the pandemic. These have included has seen government priories change due to the external explore opportunities that could emerge from changes in policy. simplifying processes and driving a digital agenda, to context of COVID-19 and Brexit. Working as a group, One NDA, has enabled the NDA to operate deliver our strategic objectives. portfolio management to maintain budget flexibilities.

One NDA, Structure, Interfaces and Behaviours Our transition from the Parent Body Organisation Model to the The NDA historical model for delivery of its mission, has Operating Companies being wholly owned subsidiaries of the NDA 12 Brexit The NDA group coordinated its response to BREXIT. been through a variety of contractual arrangements. is now complete. The Group Operating Model, Group Leadership Managing the impact to the NDA group of the change in UK to EU This included maintaining parallel risk response plans Managing the NDA mission, with the scale, complexity and Team and One NDA, has been launched and is a new way of relationships for ‘deal’ and ‘no deal’ exit scenarios. Assurance and uncertainty, through these various arrangements is resource working across the NDA group. It seeks to simplify and standardise internal audit activities were undertaken to test the intensive and difficult to ensure value for money. It has arrangements to provide opportunity for greater effectiveness, robust arrangements and the planning in place for Brexit also had the potential to limit the options for accelerating efficiency and progress. Readiness. Stakeholder and regulator communications were established with the key parties involved in focus mission progress and may lead to stakeholder loss of forums, risk planning and reporting. confidence in NDA mission delivery.

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Governance statement (continued) Governance statement (continued)

Information governance initiative, with the aspiration to seamlessly We are assessing the risk of modern slavery responsible for developing and maintaining the connect the NDA group and central within our supply chains, by targeting high risk Internal Control Framework in their own functional The NDA Group Chief of Staff and Security Officer Government bodies by end of 2021 categories of spend, and segmenting using the areas. Oversight and challenge to the system is has responsibility for information governance, • Continued to develop the group’s Cyber guidance provided by Government in its Modern provided by the Board and also by the Audit and information and communications technology, Apprentice and Graduate scheme that supports Slavery Assessment Tool. As an organisation, we Risk Assurance Committee, who ensure plans are in security & resilience and cyber. This covers all the whole civil nuclear sector set ourselves high standards and expect the same place to address any weaknesses. aspects of: • Supported more than 100 Cumbrian school approach from our supply chain. Our Supply Significant reliance is placed on those controls children in completing the National Cyber Chain Charter sets out the NDA’s position and its operated by businesses across the group, including • Cyber security Security Centre’s (NCSC’s) Cyber First scheme, expectations. We have embedded processes on the in the management of various compliance risks, • Physical and personnel security and resilience provided by the NDA and Energus management of any suspected or reported breach including tax risks. Significant focus and cross- • Knowledge and information management • Led industry working groups in unmanned of the Modern Slavery Act, these have support of group support has been given in-year to the • Digital and data management aerial vehicles, supply chain and personnel the victims as the focus. extended requirements of the off-payroll worker • Information security and assurance security rules (IR35). The NDA is compliant with the IR35 • Information risk management • Worked to agree cloud principles with a view Our commercial policies and processes are built requirements. • Information and communications technology to better collaboration & efficiency through to ensure that modern slavery checks are built in developing standardised architecture in the and considered as business as usual good practice. In line with Government requirements, the The Security and Corporate Services team have cloud Adoption of standard Government approaches, NDA Modelling and Analysis Team tests the continued to provide effective leadership and • Completed a sector-wide cyber exercise ‘Purple including the standard selection questionnaire, robustness of the end-to-end process used in management of information risks and issues arising Lumi 2021’, delivered virtually and including a contractual clauses etc. ensure that we support the developing all the group’s business-critical models across the nuclear estate. This includes governance, chain-of-command element for the first time Government aims for commercial as set out in the and spreadsheets that influence the NDA’s key assurance and oversight of a number of group- • Supported DEFRA, PHE, EA and BEIS in the Government Commercial Function Modern Slavery business decisions. The NDA is compliant with wide risk reduction programmes, all of which have development of nuclear and radiological Statement. the implementation of the MacPherson Review of delivered key benefits. response and recovery Quality Assurance (QA) of Government Analytical • Continued to make good progress across the Effectiveness of the control Models and has AQuA Book compliant processes in During the last year, we have: group with respect to compliance with the environment place. • Provided effective coordination across the NDA General Data Protection Regulations group in response to the COVID-19 pandemic. As Accounting Officer, I have responsibility for Our focus on aligning and improving audit and • Delivered a continued increase in cyber The NDA group Senior Information Risk Owner ensuring the System of Internal Control and its advisory services across the group in support of strengthened Audit and Risk Assurance maturity across our protect, detection, response (SIRO) forum, comprising senior NDA staff and effectiveness are both sound. I am also personally (A&RAC) oversight has continued. This year, the and recovery capabilities Directors from all of our businesses, who are accountable for safeguarding the public funds further embedding of our ‘virtual’ group internal • Delivered an NDA Warning, Advisory and responsible for managing information risk, meet allocated to the NDA, as well as departmental audit function and target operating model has Reporting Point that has been established to regularly to provide governance of assurance assets, in line with the HM Treasury publication improved the quality and consistency of group- share timely cyber threat intelligence across the programmes, and audit performance reviews ‘Managing Public Money’. Support for these wide arrangements and has supported our NDA group in the areas covered above. These assessments activities is provided by the NDA internal audit overall visibility, understanding and ongoing • Provided NDA group supply chain security audit and reviews, in turn, provide assurance to key function, the external auditors (the National Audit improvement of matters of corporate governance, and assurance services stakeholders including the regulatory community, Office) and other assurance functions, both within risk management and internal control. Compliance • Delivered the first phase of our ICT the NDA Board, BEIS and other Government the NDA and across the group. arrangements continue to develop; during the modernisation programme, transitioning NDA departments and agencies. year we approved a new Compliance Strategy and Corporate Centre, INS and RWM to Microsoft In accordance with HM Treasury guidance, the NDA reviewed the arrangements by which we support Office 365 System of Internal Control has been in place for the Modern Slavery Act 2015 the raising of concerns and the business in making • Continued delivery of the Cyber Security & period commencing 1 April 2020 up to the approval compliant and ethical decisions. Resilience Programme including transition to The Modern Slavery Act 2015 (s54) requires date for the Annual Report and Accounts. The remote delivery of services (training, exercising system is designed to manage risk to a reasonable organisations with a global turnover in excess Our A&RAC has continued to strengthen and technical testing) of £36 million to publish an annual slavery and level while complying with relevant rules and regulations. relationships and arrangements with the group’s • Continued to evolve the group-wide digital human trafficking statement. In the NDA this is supporting Audit and Oversight Committees at collaboration platform (The Hub) within our supplemented by a Modern Slavery and Human the subsidiaries and site licence companies. From secure infrastructure service (Ecosystem) Trafficking Policy which details the steps taken and It is impossible to eliminate all risk of failure in implementing policies, aims and objectives; April 2020 we held regular group-wide sessions for promoting the effective sharing of sensitive future developments to support our supply chains NDA and business A&RAC Chairs and members; data, knowledge and expertise, and enabling in eradicating these practices. therefore, the system provides assurance of effectiveness to a level that is reasonable rather to provide an opportunity to share challenges and the provision of cross-group secure services good practices arising as a result of the pandemic, • Initiated a ‘Group Unified Communications’ than absolute. My Executive team members are

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Governance statement (continued) Governance statement (continued)

and to focus in on emerging risks with facilitation at my request in response to concern over the to the business and to guide decision-making at from external subject matter experts. The group- design and operation of processes and controls the highest level. We have been responsive with wide representation and input at our NDA Group applied to senior pay across the group. Findings our assurance activity and switched focus to be A&RACs and Internal Audit Conference this year from this audit were quickly communicated to all supportive and advisory where required. Many of was the best yet and the outcomes from the event, stakeholders in order that improvement actions these techniques will be carried forwards into next including agreed audit and improvement areas for could be implemented and lessons learnt shared. year as we introduce a more agile and business 2021/22, evidence the benefits we are now realising partnering approach. from our One NDA approach to internal audit. 2020/21 internal audit reviews completed across the group by the year end were assigned ratings as On balance, as Accounting Officer, I am therefore Our group internal audit function developed and follows: ‘no assurance’ 4%, ‘limited assurance’ 1%, confident that the system of internal control delivered a group internal audit plan for 2020/21; ‘moderate assurance’ 29%, ‘high level of assurance’ operating throughout the past year is effective, including group audit themes, aligning our 35% and ‘substantial assurance’ 7%, with 22% and appropriate to meet the NDA’s objectives. In approach to the review of significant group-wide advisory and 2% not rated. The overall ‘moderate’ reaching this conclusion, I have taken advice from risks and controls. A significant focus of the group- assessment is reflective of the group position. the Group Head of Internal Audit and the Group wide work this year was to provide assurance over Chief Compliance Officer. the development and implementation of supplier Group-wide themes identified by internal audit relief schemes in response to COVID-19; an efficient reviews as requiring further strengthening included and effective response to a significant emerging our response to evolving risks around information, risk. In addition, planned group-wide audit work communications and technology; particularly on our asset management strategy, controls and in response to information governance and the asset performance which underpin mission delivery General Data Protection Regulation. Reviews also was completed. The internal audit work for 2020/21 highlighted the need for further improvement was further designed to provide assurance over key in our contract, risk and change management business processes, along with specific corporate arrangements. Addressing these topics with a David Peattie and business risks. group-wide approach to risk and control is not Accounting Officer and only strengthening oversight but also enabling Group Chief Executive Officer The findings from the internal audit reports across a collaborative and consistent approach to the 15 July 2021 the group receive close attention from both the development and implementation of improvement Executive team and the Board via the A&RAC. activities.

In line with the standard ratings of the Government Business operating processes, including financial, Internal Audit Agency, The NDA’s Group Head of internal procurement and broad HR controls were Internal Audit has provided an overall rating of generally found to be robust. ’moderate’ to the level of assurance that there is generally a sound framework of governance, risk I have also been mindful of the work by several management and control, both within the NDA and important bodies examining the Magnox the wider group. This view is based on the work of procurement and the Magnox transition; namely internal audit, including oversight of the various the NAO, the Parliamentary Public Accounts assurance activities undertaken by the NDA, its Committee and the Magnox Inquiry. We are subsidiaries and site licence companies and through currently reviewing the recommendations from engagement with the Internal Audit functions of the these reviews, and the recently published BEIS businesses. Departmental Review, and will formally respond later in the year. This will ensure a timely and In the NDA Corporate Centre the assigned ratings effective update to the system of internal control. were as follows: ‘no assurance’ 5%, ‘moderate assurance’ 11%, ‘high level of assurance’ 47% and ‘substantial assurance’ 5%, with 32% advisory. Looking forward, and in light of the COVID-19 crisis, Our audit into senior pay controls received the internal audit has had and will continue to have an ‘no assurance’ rating. This audit was undertaken important role to play as an advisor and assurer

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Remuneration report Remuneration Committee (RemCo)

The Remuneration Committee formally determines the remuneration and terms of service of the Chief The primary role of the Remuneration Committee is to ensure that an effective Executive and executive directors including individual salaries, setting and assessing performance targets, the remuneration policy is in place to enable the NDA to attract, reward and outturn of performance related pay and arrangements for joiners and leavers. For avoidance of doubt, the incentivise executives with the right skills and expertise to successfully deliver remit of the NDA Remuneration Committee does not include the NDA subsidiaries. our important goals. Remuneration Committee Membership • NDA Chair • Evelyn Dickey (Independent Chair) • Chief Executive / Accounting Officer except for I am pleased to present the 2020/21 Remuneration influenced by COVID-impacted performance in • Rob Holden (Non-Executive Board Member) discussion in relation to their own remuneration • Volker Beckers (Non-Executive Board Member) • Group Chief People Officer and Group Chief Financial Report for the NDA Corporate Centre, outlining the 2020/21. • Alex Reeves (UKGI Representative Board Member) Officer except for discussion in relation to their own areas of activity for the Committee during this financial remuneration year. The targets will be finalised in early 2021/22 and the The following persons may also attend the committee • Other NDA Non-Executive Board Members Committee will ensure that targets are fully relevant meetings from time to time: - • Group Head of Reward Our response to COVID-19 was a major focus and suitably stretching for the period ahead. throughout the year and the impact on incentive arrangements was considered carefully. Shortly after the year end the committee met to consider the outcome of the 2015-2018 Long-term During the year April 2020 to March • Supported the executive to develop the Reward section of the new Framework Agreement Shortly into the year, as the virus started to disrupt Incentive Plan (LTIP). The LTIP had 7 participants, 2021, the Remuneration Committee: our lives and business, the Committee reviewed the some of whom are no longer employed by NDA. between BEIS and the NDA, particularly performance against the 2019/20 incentive plan. providing advice on appropriate governance • Reviewed performance at the NDA and Eleven months of the performance period were The assessment, and any payment related to this LTIP, individual executive level to determine the unaffected by COVID-19 and performance against had been previously deferred pending the outcome • Reviewed the salaries of the NDA Executive Short-term Incentive Plan (STIP) awards for the targets was strong. The Committee decided to declare of the Magnox Inquiry led by Steve Holliday. The team and made changes effective 1 April 2020 year April 2019 to March 2020 a corporate out-turn in line with the formulaic target output of this inquiry was the Magnox Inquiry Report in line with the wider workforce achievement at 87.5% of the maximum. Mindful of which was published in March 2021 and highlighted the wider impact unfolding in society, the payments a number of corporate failings within the NDA • Finalised the performance targets for the • Appointed PwC as independent Remuneration were deferred until September and the CEO and during the relevant 2015-18 period which resulted 2020/21 STIP, confirming that targets would Committee advisers CFO voluntarily took a 20% reduction in their own in substantial costs for the taxpayer. After careful remain at pre-COVID levels payments. consideration of the Magnox Inquiry Report and

relevant issues the Committee decided to exercise its • Agreed the outcome and payments for the LTIP Remuneration Policy Similarly, the performance of the 2017-2020 long-term full discretion and recommended to the Board that no plan April 2017 to March 2020 vesting in 2020. incentive plan was carefully considered and a payment payment should be made to any participant in relation Attracting and retaining the right calibre of executives is critical if we are to deliver the NDA’s of 150% of the award value declared in line with the to this deferred LTIP. This was agreed by the Board. • Agreed the targets of the LTIP plan for years target achievement. Payments for these was also mission safely, securely, quickly and to provide April 2020 to March 2023, payable when deferred until September. During the year, the Committee continued to support value for the taxpayer. It is therefore essential that vesting in 2023 the Group CEO by looking at reward not just for the we offer reward packages that are competitive with Early in the financial year, the Committee finalised the two Executive Directors but for all Executive Team the markets in which we compete for talent, whilst • Commenced work to set the targets for the targets for the 2020/21 incentive plan and confirmed members. This focus beyond Executive Directors is still being mindful of taxpayer value for money. that the original targets, drafted pre-COVID-19, should intended to be formalised in 2021/22 with an updated short-term incentive plan 2021/22 and the not be adjusted. Whilst not appropriate to amend the LTIP 2021-2024 which will be finalised early in Reward and Governance Policy and Committee Terms The remuneration of the Executive Directors targets, the Committee signalled to the executives that of Reference. The Committee also takes an oversight financial year 2021/22 consists of a base salary, performance related short it would use discretion in arriving at any final payment of reward in the NDA Corporate Centre in general and and long-term incentive plans, a market benefit decision to take the impact and our response to the does this by attending meetings of the organisation’s • Decided the outcome of the 2015-2018 LTIP allowance and pension entitlements. The following virus into account. Joint Consultation Group and by a variety of other plan as described in the opening section means as reported elsewhere in this report in line with table sets out the NDAs Executive Remuneration Policy and gives highlights of how this is being In early 2021, the Committee commenced the process our commitment to section 172 of the Companies Act. • To guide the committee’s thinking, market operated. of setting incentive targets for the annual 2021/22 insight information from Korn Ferry Hay and plan and the long-term 2021-2024 plan. In doing this from Price Waterhouse Coopers (PWC) was the Committee has taken account of our Strategy 4 received and discussed in depth, particularly on document and the opportunities of One NDA and Evelyn Dickey is mindful that targets should not be inappropriately Chair of the Remuneration Committee the topic of the market’s response to COVID-19

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Remuneration report (continued) The Committee routinely seeks independent advice 2020/21 were entitled to fees of £25,000 per on remuneration matters to support the setting annum. Basic Salary of reward levels at an appropriately competitive level. In 2020, PwC were selected as the Advisers to Those who chaired board committees also received Policy & Purpose Salaries are set at a level required to attract and retain the right calibre of executives, reflecting the committee and they will also provide support a fee supplement of £5,000. Details of members the skills and experience of the individuals, market reward data, scope/size of role & responsibili- where required to other parts of the NDA group to who chaired committees are shown in the table ty and mindful of taxpayer value. obtain synergies and support consistency. below however the NDA Chair does not receive Operation of policy Salaries are reviewed each year, effective 1 April, taking the above matters into account and the a supplement for chairing the Nominations salary awards being made in the wider organisation. Committee. Outcome 2020/21 Salaries for Executive Directors increased by 2% effective April 2020, in line with the levels agreed Director’s Contracts with BEIS for the rest of the NDA Corporate Centre. However, this did not apply to the Group CFO who had joined 3 months before the salary review date. Executive Board Members, presently the CEO From 15 March 2021, in recognition of the Application for 2021/22 The NDA Corporate Centre is subject to the public sector pay pause and the Committee intends and CFO, are appointed by the Non-Executive increased time, scope and workload of the Board that this will apply to the Executive Directors. Board Members and, in the case of the CEO, with following the transition to a subsidiary model, Short-term Incentive Plan the approval of the Secretary of State for BEIS in the fee structure has been increased to £40,000 Policy & Purpose The aim of the short-term incentive plan (STIP) is to encourage improved operational and or- conjunction with Scottish Ministers and in line with per annum with no additional fee for chairing ganisational performance and motivate and engage employees by having part of their reward the Commission of Public Appointments Codes of board committees. Some Members have decided package as variable pay, linked to achievement of the business operating plan and their personal Practice. Their service contracts have a 6 months to remain on the previous fee structure for this objectives. notice period. Remuneration for the Executive financial year. Operation of policy The NDA CEO has an STIP up to a maximum of 50% of salary and the Group CFO 40%, based on Directors is the responsibility of the NDA Board achievement of corporate and personal objectives linked to the group operating plan. and operationally managed by the Remuneration Non-Executive Board Members and the Chair Outcome 2019/20 During the year, the Committee approved the corporate elements of the STIP payment at 87.5% Committee. do not receive performance-related bonuses of maximum and personal elements for the CEO, CFO and other executives. The outcome for or pension entitlements but are reimbursed for the 2020/21 STIP was decided early in 2021/22 and a narrative on this will be proved in the next annual report. Non-Executive Board Members are appointed by reasonable expenses incurred in the performance the Secretary of State for BEIS in consultation with of their duties. Application for 2021/22 No change to the STIP is planned for year 2021/22. In setting incentive targets for this plan the Scottish Ministers, the NDA Chair and in line with Committee is mindful that that targets are fully relevant and suitably stretching for the period the Commission of Public Appointments Codes of Details of directors’ remuneration and pension are ahead and not inappropriately influenced by the COVID-19 impacted performance of 2020/21. Practice. The remuneration of the Chairman and shown in the single figure table below. More details Long-term Incentive Plan Non-Executive Board Members is also determined on pensions and cash equivalent transfer values are Policy & Purpose The aim of long-term incentive plan (LTIP) is to encourage strong and sustained improvement in by BEIS. Fees for the Chair and other Non-Executive shown at the end of the section on page 99. Details line with the strategy and mission, aligning executives on longer-term strategic goals and provid- Board Members are determined by BEIS and on the gender pay gap can be found on page 95. ing a motivating stake in the delivery of long-term, sustainable business success. the non-executives are not involved in decisions Operation of policy Eligibility for LTIP is a year on year decision by the Remuneration Committee. An LTIP Award relating to their own remuneration and for year may be made at the start of each 3-year performance period and a multiplier may increase or decrease the outcome between 0% and 200%. The multiplier is based on performance against long-term targets and improvements to the Operating Plan as determined by the Remuneration Executive Directors Remuneration committee who also regularly monitor the performance. The CEO typically has an award of 25% This information is subject to audit. of salary and the Group CFO 20%.

Outcome of LTIPs During the year, the Committee approved the outcome of the LTIP 2017-2020 at 150% of award Director Year Fixed Pay Variable Pay Total commencing 2017 value. The LTIP 2018-2021 was assessed early in 2021/22 and a narrative on this will be provided Remuneration and 2018 in the next annual report. £ Application for LTIP No change to the LTIP is planned for year 2021-2024. Salary £ Benefits £ Pension*** Short Term Long Term 2021-24 The Committee will set targets for this plan in late Spring 2021 and will ensure these are relevant £ Incentive £ Incentive £ and suitably stretching for the period ahead. David Peattie (*) 19/20 330,000 61,118 - 114,510 125,938 631,566 Benefits Policy & Purpose Benefits are offered to be competitive with the markets in which we compete for talent. 20/21 336,600 61,118 - 126,225 115,634 639,577 Operation of policy Executive Directors receive a car allowance of £12,000. Note that private medical insurance is not provided, in line with our public sector status. There are no changes planned to this policy Mel Zuydam (**) 19/20 61,505 2,839 23,587 15,884 - 103,815 for 2021/22 20/21 260,000 16,981 99,710 63,960 - 440,651 Pensions Policy & Purpose A pension is provided to build up a retirement income, in line with other major employers. Operation of policy Executive Directors are eligible for membership of the Civil Service Pension arrangements in the (*) Additional benefits received was a market benefit of £12,000, and a cash payment of £49,118 (2019/20: £49,118) in lieu same way as other employees, either on a ‘career average’ or a defined contribution basis. More of membership of the Civil Service Pension Plan. details of our pension arrangements are on page 99. (**) Joined as an Executive Board Director from 06/01/20 and remuneration and benefits for 2019/20 reflects this 3-month The Group CFO is a member of these arrangements and the CEO is provided with a cash pay- period. Additional benefits received were a market benefit of £12,000, and holiday pay allowance of £4,981 (2019/20: £0). ment in lieu of membership. There are no changes planned to this policy for 2021/22. (***) Details on Pension arrangements are shown on page 99.

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Remuneration report (continued) Remuneration report (continued)

Non-Executive Board Members Remuneration This information is subject to audit. Wider workforce considerations Non-Executive Additional role Year Total Fees £ In setting the remuneration for the Executive Directors • Incentive targets alignment, ensuring those used Board Members (Effective date of becoming a Member) and the wider executive team, the Remuneration for Executives are the same as those used for Tom Smith (Chair Chair of the Nomination Committee (01.03.17 – 31.08.2020) 19/20 150,000 Committee is mindful of wider workforce considerations the corporate element of the NDA employees’ until 31.08.2020) and appropriate alignment is sought. This oversight is incentives. 20/21 62,500 assisted by attending employee meetings such as the • The executive pay review in April 2020 was fully Dr Ros Rivaz (Chair Chair of the Nomination Committee (01.09.20 - date) 19/20 - Joint Consultative Group as an observer. Examples of this aligned with the wider workforce from 01.09.2020) alignment are: • Executives and all employees are eligible for the Civil 20/21 109,375 Service Pension arrangements Volker Beckers Chair of the Audit & Risk Assurance Committee (01.03.15 - date) 19/20 30,000 20/21 30,457

Evelyn Dickey (1) Chair of the Remuneration Committee (01.03.15 – date) 19/20 30,000

20/21 30,000 Ratio between median earnings of organisation’s workforce

Janet Ashdown (1) Chair of the Safety and Security Committee (01.06.15 - date) 19/20 30,000 and highest paid Director (‘Hutton’ Disclosure)

20/21 30,000 Reporting bodies are required to disclose the In 2020/21, zero (2019/20, zero) employees received relationship between the remuneration of the highest- remuneration in excess of the highest-paid director. Rob Holden Chair of the Programmes and Projects Committee (01.06.15 - date) 19/20 30,000 paid director in their organisation and the median 20/21 30,457 remuneration of the organisation’s workforce. Remuneration ranged from the lowest band of £20,000 The banded remuneration of the highest-paid director in - £25,000 to the highest band of £635,000 - £640,000. Nick Elliott Non-Executive Board Member (15.03.21 – 30.04.21) 19/20 - the NDA Corporate Centre, in the financial year 2020/21 (2019/20 band £25,000 - £30,000 to £630,000- £635,000. 20/21 - was £635,000 - £640,000, (2019/20, £630,000 – 635,000). This was 8.4 times (8.5 times 2019-20) the median Total remuneration includes salary, non-consolidated Francis Livens Non-Executive Board Member (01.12.20 – date) 19/20 - remuneration of the workforce, which was £75,515 performance-related pay and benefits-in-kind. It does 20/21 9,019 (2019/20, £74,544). not include severance payments, employer pension Alex Reeves (2) UKGI Representative Board Member (01.02.20 – date) 19/20 - contributions and the cash equivalent transfer value of pensions. 20/21 -

Michelle Heath Non-Executive Board Member (01.10.19 – 30.06.20 19/20 12,500 This information is subject to audit. 20/21 6,250 2020/21 2019/20 Total Total £ £ Band of highest paid Director’s total remuneration 635,000 - 640,000 630,000 - 635,000 Median total remuneration 75,515 74,544 Ratio 8.4:1 8.5:1 (1) Members who decided to remain on the previous fee structure for this financial year, see page 89 Band of lowest paid employee’s total remuneration 20,000 - 25,000 25,000 - 30,000 (2) Did not receive any remuneration for services to the Board

The small increase in the median remuneration level of 1.3% is due to the annual salary increase, circa 2%, offset by a small change in the mix of the workforce due to relatively more recruitment at lower grade levels. The highest paid director received a salary increase in 2020/21

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approach to creating a culture of inclusion see case study on page 40. employees who are disabled, respect, inclusion and diversity. We or have become recently have ensured high visibility of our Over the last year we’ve focused on disabled, in order to support leadership commitment to the ED&I delivery of group key targets as a their continuing employment, People report agenda during an unprecedented diverse and inclusive employer with training, career development year. the objectives of: and promotion. Our people are the greatest asset to our mission. Our objective is to • Bringing to life our fairness Since 2018 we have established a The recent OHI Survey had a enable and drive the delivery of our mission through our highly skilled and meritocracy (resourcing) dedicated Head of ED&I to lead response rate of 83% and provided principles to drive accountability people by attracting, retaining and developing a high performing, a working group within the NDA us with further clarification on how and transparency in how we Corporate Centre representing our employees are feeling within the talented and motivated workforce. attract, select and develop talent all levels across the organisation workplace with an increase from the • Creating flexible working focusing on the delivery of D&I last survey as follows:. We want to create a culture in which Ensure we have the right the NDA group has enabled us principles (‘We Trust’) to support and the provision of access to our people can thrive and provide to establish a set of principles to employees home working where people, in the right roles various Networks. The focus group Significantly Stronger: a great place to work where our underpin the Agile Working Policy, operational needs allow at the right time is responsible for the commitment • Direction people feel respected, included and with a sensible and flexible approach • Embedding ED&I into our able to perform at their best. The to the working environment, while and delivery of the ED&I Plan within • Coordination This year we co-created the NDA Leadership Academy, Leadership following section provides an update ensuring business needs remain a the NDA Corporate Centre and is • Innovation and Learning Group Leadership Standard, which Standard and developed an on the important progress we’ve priority. key to the participation across the • Motivation describes how we expect our leaders online leadership module made on our ‘people’ critical enabler organisation within the various • External Orientation to behave and lead. The Standard • We also maintained a focus on in 2020/21. The One NDA way of working has focus areas including; International • Comparable has been adopted by all the respect at work including online This year our Strategy 4 document also enabled the group to maximise Women’s Day, International Day • Accountability operating companies within the NDA Respect workshops to support was published which contains the benefits of collaboration. An Against Homophobia, Biphobia, • Capability group, creating a single language of training for employees and significant updates to our People example of this is the launch of the Interphobia and Transphobia leadership. We have established an leaders across the organisation Strategy. This outlines and underpins group wide mobility policy working (IDAHoBiT), Black History Month Work done since 2018 includes: NDA group Leadership Academy, and reviewed a number of the objectives for the NDA group. in partnership with our Trade Unions. and International Day of People • Strengthening and increasing which welcomed its first cohort on our policies. These additional It is built around 3 key themes: This has provided us with the with Disabilities Day - leveraging the capability and capacity within the programme in March 2021. The activities have been welcomed 1. Ensure we have the right people, opportunity to enable and capitalise power and reach of our group-wide the NDA Corporate Centre, Academy will enable us to future by the organisation and have in the right roles at the right on the wealth of experience and networks throughout the year. including new appointments proof our leadership capability, further demonstrated our time to deliver the mission talent within the NDA businesses, by within our Executive Team, the strengthen our executive succession continued commitment to 2. Create a culture in which our providing more freedom to work in Recent D&I survey results from 2020 appointment of a Corporate and drive collaboration across driving respect at work. people can thrive other parts of the group, which has show an increase in the following Centre Director and the the group at all levels. For more areas of the NDA D&I Strategy: formation of a Senior Leadership 3. Work in partnership with our increased development and career In line with our policies, and the information please see case study on • Manager support on altering Team recognised trade unions and the opportunities. establishment of our group wide page 94. working arrangements • The publication of the One NDA broader stakeholder community Disability network, we work hard • Openness and discussions Handbook Creating a culture in to support all individuals who are The strategy was developed in We are committed to developing around mental health issues • Establishing important which our people can disabled. This includes those seeking collaboration with a number of our people through our approach • Leaders actively championing programmes to support our thrive employment with the NDA, as stakeholders, both internal and to skills development and talent. We diversity and inclusion vision of creating great places well as those employees who have external to the NDA group. This are looking at functional succession • Employees understanding to work for everyone: equality, A One NDA approach is enabling become recently disabled. In doing One NDA approach has enabled and talent, understanding the of raising complaints around diversity and inclusion; mental us to work together as a group to this: us to collaborate meaningfully and capabilities we need not only now discrimination, harassment or health and wellbeing build great places to work, which are • We are a ‘disability confident’ effectively on developing a strategy but in the future and ensuring that bullying and where to go for • Responding to the COVID-19 diverse and inclusive. Organisations employer, with a view to move to create a thriving workforce for the our functional career pathways help situation, progressing our agile that put diversity and inclusion at to level 2 status within 2021/22 future. enable us to provide meaningful working agenda overnight their core, attract and retain the best • We give full and fair long-term opportunities. Areas for improvement were within • Creating a Code of Conduct, people who perform better and are consideration to applications We are also continuing our the transparency of our recruitment setting out expected behaviours more successful. for employment, where all commitment to the targets and It’s important that we continue and promotion process and how we and standards Creating an environment where screening and assessment is objectives of the UK government’s to attract diverse, talented and challenge the status quo. • Progressing work to establish differences of thought and carried out in line with our policy position, including the Nuclear committed people to be part of our a NDA group Leadership perspective are encouraged isn’t just recruitment standards and with Sector Deal. We take a leading role mission. Despite COVID-19, we have To support our employees through Academy and Standard the right thing to do - it’s also good reference to the candidate’s in skills strategy and policy for the continued to increase the number the COVID-19 pandemic, we • Our survey results have shown for our business. aptitudes and abilities UK nuclear sector by chairing the of apprentices and graduates to ramped up our engagement on our employees feel motivated • We make reasonable Nuclear Skills Strategy (Group) and address key skills gaps and our mental health and wellbeing. More with clear communication The Equality, Diversity and Inclusion adjustments through a work continuing to support government future pipeline. information on employee health and around the NDA’s Vision and a (ED&I) Group Strategy, launched in place adjustment passport and initiatives on a national, regional and wellbeing can be found on page 95 positive working environment to May 2018, set out the NDA group arrange appropriate training for local level. Working collaboratively across For more information on respect and collaborate and develop.

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Flexible & Agile Working We have undertaken diverse recruitment campaigns and promotions across the NDA group and have made a number of key female senior appointments CASE STUDY: Leadership Academy – Beacon Project 2020/21 During 2020, we have shown that the NDA Corporate Centre and group can adapt many of its and promotions which have had a positive impact. roles to work flexibly. Attracting, retaining, and growing exemplary Looking to the future of our industry, we continue leaders is instrumental to the delivery of our During the pandemic we reviewed our flexible to work towards breaking down barriers in science, mission. Great leadership is key to creating the working policies to support home working, caring technology, engineering and mathematics (STEM), right environment to engage and empower responsibilities, and home schooling. We recognise and we have seen increased female graduates our people. Our leadership goal is to help our and apprenticeship intakes – in 2019, 46% of the people perform at their best to delivering our the benefits of allowing employees to have influence over their work location, which can result Nuclear Graduates intake were female and 40% of mission safely and efficiently on behalf of the apprentices were female. taxpayer. in a better work life balance. This also provides an opportunity to attract more diverse talent. Looking forward into 2021/22 we are developing Our new NDA group operating model enables a 5-year group ED&I strategy with the aim us to collaborate more meaningfully across Employee Voice of achieving a diverse workforce in many the entire people landscape. Last year, leaders demographic groups including the Nuclear Sector During 2020/21, employee networks played a vital from across the NDA group came together Deal commitment of 40% women by 2030. for our first NDA Talent Forum discussing role in the effort to keep our employees connected the importance of talent and succession. and included. We strengthened employee voice Focused on the importance of growing the in the creation of 4 group-wide networks (Gender Work in partnership with our next generation of our most senior leaders, a Balance, Disability, LGBT+ and Race Equality). recognised trade union and broader decision was taken to develop a NDA group In conjunction with their executive sponsors, these stakeholder community Leadership Academy. Launched in March this employee-led networks are focused on making our year, our first cohort of 16 senior leaders have workplaces more diverse, encouraging employees The NDA Corporate Centre remains committed to a now started their Leadership Academy journey. to get involved in activities and events to grow and partnership working approach with our recognised At the heart of our Academy, is our recently develop and support the organisation on its ED&I Trade Union, Prospect. Regular and constructive developed Leadership Standard. Acting as journey. Joint Consultation Group (JCG) meetings have our ‘North Star for leadership’, the group- taken place throughout the year. During the first wide framework sets out what we expect of We continue to amplify our respect and inclusion national lockdown period the meetings were our leaders wherever they may sit within our messaging through a number of awareness and set up weekly to ensure all employees’ needs group. As well as being pivotal in shaping celebration events including but not limited to, under the unique circumstances were understood the Academy work, it will also guide wider International Women’s Day, International Day and managed as well as maintaining a focus on leadership development and people processes Against Homophobia, Biphobia, Interphobia and business deliverables. Our partnership approach across the NDA group. Transphobia (IDAHoBiT), Black History Month has ensured positive relations have endured during some challenging times, constructive challenge E and International Day of People with Disabilities - TUR FU leveraging the power and reach of our group-wide and joint working has continued throughout. Every CREATE THE FUTURE networks. 6 months, a Non-Executive Board Member has

take a wider perspective are future focused on the vision As with other public sector organisations, in attended the JCG on behalf of the Board. are innovative and creative set direction 2020/21 we published our annual gender pay gap data. Within the NDA group, the figures published The One NDA group Trade Union event has EMOTONALL NTELLGENT as at March 2021 showed the overall average continued this last year. Through this we continue SAFELY COLLABORATE DELIVER gender pay gap (when weighted by employee to further build upon already strong relationships. TO UNLOCK RESULTS POTENTIAL numbers), when comparing mean pay, to be 13.1 % This is a key enabler for supporting and engaging BRNGNG NDA GROUP GROWTH offer opportunities M BEST MNDSET deliver performance and the average median pay gap 12.4%. with our people. for growth LEADERS are visible for delivery seek and develop drive accountability potential effectively make create an decisions empowering collaborate within environment the wider context As a part of the NDA’s Equality, Diversity and Employee health and wellbeing FOCSED ON WELLBENG Inclusion Strategy, we have seen a decreasing trend in our gender pay gaps in the NDA Corporate The NDA recognises that health and wellbeing at INSPIRE OUR PEOPLE Centre and across the wider NDA group. work is vital, none more so than this last year. We communicate openly and effectively build high performing teams closely monitor both short-term and long-term respect and are inclusive lead and engage others This is a long-term programme and our focus sickness absence and have policies and support AY remains on driving improvements in our gender mechanisms in place. These policies have been TOD pay gaps. enhanced to support the additional pressures the Pandemic and lockdown has introduced.

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Headcount and employee costs

We have updated our Employee Assistance For 2020/21 an average of 4.6 days per employee NDA group staff costs Provider (EAP) to support and reflect the was lost to sickness absence. This equates to an This information is subject to audit commitment NDA have to providing a fast and absence rate of 1.84 and is more than the national efficient service that meets the needs of our average of 3.6 days. An analysis of 2020/21 total NDA Group 2021 NDA Authority (a) NDA Subsidiaries (b) Total employees. This service provides more options for absence identifies that mental health contributed Programme our employees including immediate counselling to the majority of long-term absences. The Permanently Others Permanently Others Permanently Others support if required. national average loss of days due to mental health employed employed employed staff staff staff conditions is at 13.4 days according to the Office We have engaged and worked closely with MIND, for National Statistic, therefore we will continue to £m £m £m £m £m who now form an integral part of our additional work with managers on the importance of dealing Wages and salaries 28 3 2 1 795 61 890 support provision for our employees requiring help with sickness absence and in particular ,mental Social security costs 3 - - - 88 - 91 as an alternative option to the EAP. This is further health issues, by providing educational sessions on Pension costs 6 - 1 - 145 - 152 supported by our Mental Health First Aiders across managing sickness absence to all our managers Total staff costs 37 3 3 1 1,028 61 1,133 the NDA group who are supported individually by and employees and continuing to provide advice a dedicated counsellor from MIND. and tools on Mental Heath issues and how we NDA Group 2020 NDA Authority (a) Subsidiaries (b) Total manage these within the workplace. Furthermore, MIND has supported numerous Permanently employed Others Permanently Others Mental Health & Wellbeing sessions delivered via Employee Turnover staff employed staff Line Managers briefings, departmental tea & talk £m £m £m £m £m sessions and Wellbeing Intranet updates. These 736 The last organisational redesign covered the Wages and salaries 24 7 51 818 group discussions covered the various anxieties 84 entire NDA Corporate Centre and resulted in a Social security costs 3 - - 87 around the needs and impact on workplace, change to around 20% of roles with an increase in Pension costs 5 - 131 - 136 home working/ schooling requirements. These recruitment of approximately 90 roles within the Total staff costs 32 7 951 51 1,041 also covered the social/domestic impacts of the NDA Corporate Centre to enhance the provision of pandemic on individuals & their families at the capability completed during 2019/20. a) NDA Authority people costs are included within administration expenditure (see note 5 to the accounts) The NDA, additionally Individual wellbeing coaching increase in total spend compared to the previous year was due to further improvements driven by One NDA with sessions were also provided on request. The average length of service is 5.2 years and for the action of increasing our capability and capacity in critical skills areas. the year 2020/21 turnover of permanent people During the year, the NDA, through the CEO and was 9.2% This compares to an average external b) Subsidiary people costs are reported through the ‘contractor and subsidiary costs’ line in the Financial Statements Executive team, have proactively discussed the turnover rate of 15% (as per latest CIPD survey). (see note 6 to the accounts) importance of mental health and wellbeing during staff briefings, with support from MIND. The CEO The Group participates in various pension schemes, both defined contribution and defined benefit. During 2020/21, 43 employees were part of has promoted a clear message of support for Further details can be found in note 26 to the Accounts. the voluntary exit package as a result of the ‘family first’ throughout the pandemic. organisational design with 11 of those leaving in The average number of full-time equivalent persons employed during the year as follows: this reporting period. The NDA has further demonstrated its commitment NDA Group Permanently employed Others no. Total Total to mental health and wellbeing by appointment of This information is subject to audit people no. 2020/21 no. 2019/20 no. a New Head of Mental Health & Wellbeing. Directly employed - authority (Admin) 284 39 323 315 2020/21 Number of Number Total no. This year we plan to carry out a full review of the Directly employed - authority (Estate) 30 7 37 - management of absence and in particular the Exit package cost compulsory of other of exit band redundancies agreed packages Directly employed - subsidiaries 13,663 920 14,583 14,660 service provision from our occupational health departures by cost Total 13,977 966 14,943 14,975 provider and how we can ensure the best use of band this service to our employees. A full roll out of the £0-£25,000 - - - new process and requirements will be provided to £25,001-£50,000 - 7 7 Of the total NDA permanent and fixed term employees at the end of March 2021, the breakdown by all staff. gender is as follows: £50,001 - £100,000 - 4 4 £100,001+ - - - NDA Authority NDA Programme Total no of exit - 11 11 Male Female Male Female Total packages Chief Executive 1 - - - 1 Exec Directors excl. CEO 1 - - - 1 Other Directors (non-Board) 6 2 - - 8 Other employees 164 130 17 15 326 Total 172 132 17 15 336

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Pension Detail benefits in the 2 schemes.) Members joining from October 2002 may opt for either the appropriate Notes to the Remuneration and People Reports Employee and employer contributions are set at the defined benefit arrangement or a ‘money purchase’ rates shown in the tables below: stakeholder pension with an employer contribution (partnership pension account). Tax arrangements of public sector Civil Service Pensions Note that there are no mandatory contributions required for the ‘Partnership’ defined contribution Pension benefits are as follows: appointees Pension benefits are provided through the Civil scheme. The Employer contributions are listed Service Pension Arrangements and executives are below the tables. As a public body, the NDA adheres to the IR35 • Benefits in Classic accrue at the rate of 1/80th also eligible for these arrangements. of final pensionable earnings for each year of regulations in deeming if any temporary roles will Annual Pensionable alpha & all PCSPS be captured within the legislation or deemed out Earnings Schemes service. In addition, a lump sum equivalent to 3 Since 2015, ‘The Public/ Civil Servants and Others years initial pension is payable on retirement. of scope of the legislation. In determining this Pension Scheme’ or alpha, provides benefits on a (full-time equivalent basis) 2020/21 employee • Benefits in premium accrue at the rate of 1/60th information, we use the IR35 checker provided by career average basis with a normal pension age contribution rates of final pensionable earnings for each year of HMRC on www.gov.uk. We are required to provide equal to the member’s State Pension Age or 65 if service. There is no automatic lump sum. information about off-payroll appointments of higher. From that date all newly appointed public/ Up to £26,000 4.60% • classic plus is essentially a hybrid with benefits consultants, contractors or people employed for civil servants and the majority of those already in £26,001-£54,900 5.45% longer than 6 months for the NDA Corporate for service before 1 October 2002 calculated service, joined alpha. Prior to that date, public/ civil £54,901-£150,000 7.35% Centre. We only use these arrangements where we servants participated in the Principal Civil Service broadly as per classic and benefits for service can’t avoid them, for example to bring in unique Pension Scheme (PCSPS). The PCSPS has 4 sections: Over £150,000 8.05% from October 2002 worked out as in premium. skills, capability and experience that we do not have 3 providing benefits on a final salary basis (classic, • In nuvos a member builds up a pension based in-house. premium or classic plus) with a normal pension age Employee membership of the schemes in the NDA on his pensionable earnings during their period of 60; and one providing benefits on a whole career is noted in the table below: of scheme membership. At the end of the We look to minimise the use of these arrangements basis (nuvos) with a normal pension age of 65. scheme year (31 March) the member’s earned and include contractual clauses in appointment Scheme % of employees pension account is credited with 2.3% of their documentation to enable us to receive assurance These statutory arrangements are unfunded with the alpha 82.9 pensionable earnings in that scheme year and that the individual or their employer is managing cost of benefits met by monies voted by Parliament Nuvos/Premium/Classic 8.2 the accrued pension is uprated in line with each year. Pensions payable under existing schemes Pensions Increase legislation. their tax affairs appropriately. Our right to request Partnership 1.7 assurance over tax obligations is made explicit to all - Classic, Premium, Classic Plus and Nuvos are • Benefits in alpha build up in a similar way to currently increased annually in line with the Pensions UKAEA (INS TUPE) 5.8 off-payroll workers. nuvos, except that the accrual rate is 2.32%. Increase Legislation. Opt Out 1.4 In all cases members may opt to give up Our off-payroll appointments at 31 March 2021 for (commute) pension for a lump sum up to the Employees are automatically enrolled into alpha on those individuals on more than £220 per day and Annual Pensionable alpha & all PCSPS limits set by the Finance Act 2004. appointment to employment at the NDA. This is in lasting more than 6 months (up until the expected Earnings Schemes line with the auto enrolment rules of the Pensions (full-time equivalent basis) 2020/21 employer con- The partnership pension account is a stakeholder end date – not 31 March 2021) are detailed below. Act 2008. They do, however, have the ability to opt There were 17 new off-payroll workers in the year tribution rates pension arrangement. The employer makes a basic out of the scheme at any time or elect to join the contribution of between 8% and 14.75% (depending whose assignments lasted more than 6 months defined contribution, ‘Partnership Pension’ offered on the age of the member) into a stakeholder (between start (after 1 April 2020) up to 31 March under the Civil Service Pension Arrangements. Up to £23,000 26.6% 2021 (not end of contract). No senior management £23,001-£45,500 27.1% pension product chosen by the employee from a panel of providers. The employee does not have to were paid through off payroll arrangement during Employers no longer have a duty to automatically £45,501-£77,000 27.9% contribute, but where they do make contributions, this reporting period. enrol a new employee where they have reason Over 77,001 30.3% to believe the employee has registered for fixed the employer will match these up to a limit of 3% protection in relation to lifetime allowance which of pensionable salary (in addition to the employer’s Length of appointment at 31 March No. of off payroll basic contribution). Employers also contribute a 2021 contractors requires them not to participate in future pension Existing members of the PCSPS who were within 10 provision. In these cases, such as the NDA CEO, a further 0.5% of pensionable salary to cover the cost Less than 1 year 17 years of their normal pension age on 1 April 2012 pension allowance in lieu may be considered. remained in the PCSPS after 1 April 2015. Those who of centrally-provided risk benefit cover (death in 1-2 years 3 were between 10 years and 13 years and 5 months service and ill health retirement). 2-3 years 0 A small number of employees who transferred from their normal pension age on 1 April 2012 will 3-4 years 4 to the NDA from INS in 2019 continue to accrue switch into alpha sometime between 1 June 2015 The accrued pension quoted is the pension the member is entitled to receive when they reach More than 4 years 1 benefits in the UKAEA Combined Pension Scheme and 1 February 2022. All members who switch (CPS). The UKAEA CPS provides benefits on a to alpha have their PCSPS benefits ‘banked’, with pension age, or immediately on ceasing to be an final salary basis with a normal retirement age of those with earlier benefits in one of the final salary active member of the scheme if they are already Consultancy spend in the year was £65,000 60. This is an unfunded statutory arrangement sections of the PCSPS having those benefits based at or over pension age. Pension age is 60 for with the cost of benefits met by monies voted by (2019/20: £0) on their final salary when they leave alpha. (The members of classic, premium and classic plus, 65 Parliament each year. Pensions payable are currently pension figures quoted for officials show pension for members of nuvos and State Pension Age for increased annually in line with the Pensions Increase earned in PCSPS or alpha – as appropriate. Where members of alpha. Legislation. the official has benefits in both the PCSPS and alpha the figure quoted is the combined value of their

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Executive pensions This information is subject to audit

Real increase in Accrued pension CETV at 31 CETV at 31 Real increase in pension during at 31 March 2021 March 2020 March 2021 CETV funded by the year 2020/21 employer Health, Safety, Security, Environment £000’s £000’s £000’s £000’s £000’s and Wellbeing Report Mel Zuydam 5-7.5 5-10 39 128 67 David Peattie* 0 0 0 0 0 Like most industries, the impact of COVID-19 has been felt across all

Notes:* Does not participate in the Civil Service Pension arrangements – see note Directors’ Remuneration parts of the NDA group. Responding to government guidance and the need to protect our people caused us to pause some Cash Equivalent Transfer Values which the Civil Superannuation Vote (CS Vote) has received a transfer payment commensurate with non-essential operations and restrict others. A cash equivalent transfer value (CETV) is the the additional pension liabilities being assumed. actuarially assessed capitalised value of the In March 2020, emergency plans were stood up seen us accelerating our agile working approach pension scheme benefits accrued by a member at They also include any additional pension benefit across the entire NDA group, with the priority and providing appropriate equipment to make a particular point in time. The benefits valued are accrued to the member as a result of their being the safety of our people and sites, and sure people can work safely from home. In such the member’s accrued benefits and any contingent purchasing additional years of pension service in the scheme at their own cost. CETVs are calculated ensuring critical operating plants remained staffed difficult times, the mental health of our employees spouse’s pension payable from the scheme. A and safely operated. Testing our already rigorous has been a particular priority and we have put CETV is a payment made by a pension scheme or within the guidelines and framework prescribed by arrangement to secure pension benefits in another the Institute and Faculty of Actuaries. emergency plans, responding to the unparalleled into place bespoke line manager training, all-staff pension scheme or arrangement when the member challenges of COVID-19 has brought about valuable sessions with our mental health partner MIND, and leaves a scheme and chooses to transfer the Real Increase in CETV learning across the NDA group, with the lessons widely promoted the services of our professional benefits accrued in their former scheme. being reflected in updated practices and processes. employee support adviceline. This reflects the increase in CETV effectively funded The pension figures shown relate to the benefits by the employer. It does not include the increase Increased monitoring of activities across sites During the year, the NDA developed and launched accrued by the individual as a consequence of in accrued pension due to inflation, contributions and reduced site-based operations have in part its new Health, Safety, Environment and Wellbeing their total membership of the pension scheme, paid by the employee (including the value of any contributed to the NDA group’s lowest ever total Policy to reflect the transition to a group operating not just their service in a senior capacity to which benefits transferred from another pension scheme disclosure applies. The figures include the value recordable injury rate (TRIR) of 0.22. This compares model and the introduction of a risk-based or arrangements) and uses common market to a rate of 0.28 in 2019/20. approach to safety topics. of any pension benefits in another scheme or valuation factors for the start and end of the arrangement which the individual has transferred period. to the Civil Service Pension Arrangements and for Following government’s advice, the NDA enacted In the same period, the NDA group has been home working from March 2020. By accelerating looking at important safety areas, such as Disclosures required under the Trade Union (Facility Time Publication our IT improvement plans, almost all of our significant incident escalation and investigation employees have been able to work effectively policy. This has resulted in the establishment of a Requirements) Regulations 2017 from home throughout the entire period. A similar new Code, setting out expectations and process to picture can be seen across the group for non- follow in the event of a significant event. Relevant union officials Percentage of pay bill spent on facility time site-based roles. As we move out of restrictions In addition, an NDA group framework for Health we will, like organisations all over the world, take Safety and Wellbeing based on key performance Relevant union officials Full-time equivalent Total cost of facility time £66,247 employee number the opportunity to adopt a more flexible hybrid indicators (KPIs) is now being established, Total pay bill £32,847,401 approach of home and office-based working, looking initially at 4 priority topics for the group: 5 314 Percentage of the total pay bill spent on 0.2% prioritising productivity alongside the health, safety demolition, asbestos, control of contractors, and facility time, calculated as: (total cost of and wellbeing of our people. construction design and management. facility time ÷ total pay bill) x 100 Over the last year, the wellbeing of our employees This year has also seen significant investment Paid trade union activities has been paramount. We have endeavoured to and improvements in the NDA group’s security put them at the forefront of our major incident capabilities, these improvements extend to our Percentage of time Number of employees Time spent on paid trade union activities as 0.2% planning and our focus has been on ensuring supply chain where a new audit capability has been 0% - a percentage of total paid facility time hours the right support has been in place, and made implemented to greatly improve security assurance 1-50% 5 calculated as (total hours spent on paid trade union activities by relevant union officials available and accessible to everyone. This has activities. 51-99% - during the relevant period ÷ total paid facility 100% - time hours) x 100

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In line with the publication of Strategy 4 we are NDA’s Sustainability Report, which was published in collaborating with other Government leads in March 2021. NDA Sustainability Report: Financial Year Operating Company national nuclear and radiological emergency April 2020 to March 2021 - GOV.UK (www.gov.uk). response providing subject matter expertise to Safety performance enhance national capabilities. Greening Government Commitments Regular reviews of our protective security (GGC) arrangements continue with the NDA leading sector As part of its Greening Government initiative, the Responding to the changing COVID-19 situation Government set environment and waste targets Sellafield Ltd working groups that address emerging threats in throughout the year has required extended efforts for 2019/20 based on a 2009/10 baseline. The roll- areas such as drones, cyber security, personnel and Up until the latter part of 2020/21, Sellafield’s and oversight by the Sellafield leadership team and supply chain security. out of updated targets has been postponed by accident rate was on track to achieve an all-time supporting personnel. Their proactive and positive Government due to the COVID-19 pandemic and low. Unfortunately, some late occurring incidents, approach to managing the pandemic response in the interim, we have continued to report against Strategy predominantly related to slips, trips and falls, saw while maintaining effective nuclear safety control existing targets. The GGC targets apply to the NDA the organisation’s year-end performance being has been noted and is commended by ONR. and RWM only. This is because in the baseline year, comparable to previous years. The TRIR at the end In March 2021 the NDA published its updated RWM was part of the NDA. of 2020/21 was 0.22, compared to 0.3 in 2019/20 Magnox Ltd strategy, Strategy 4. The NDA environment function and was below the corporate target of <0.29. The has taken this as its lead to develop its strategy, Our performance against those environmental RIDDOR rate equalled the year-end target at 0.04. Managing the COVID-19 pandemic saw Magnox focusing effort on specific areas in environmental targets is set out in the table below. Sellafield improved on its target rates for both enact a successful pause to site operations and protection and improvement over a 5-year period. nuclear and radiological site incident reports and subsequent restart. By the second half of the The Environment Strategy will seek to ensure that GGC Target 2019/20 2020/21 personal contamination cases. financial year, successful hazard reduction at the NDA mission outcomes and the journey to performance performance the Magnox sites was being achieved leading to deliver them are sustainable, and that we improve Due to a safety incident in 2020, Sellafield was reduction in the nuclear risk profile. Attention and protect the environment. Reduce 61% reduction 82% reduction fined £320,000 following the Office for Nuclear remains focussed on conventional, environmental greenhouse Regulation’s (ONR) prosecution for safety breaches. and security risks for the business. Environment, gas emissions Carbon Net-Zero Failings identified because of this incident, plus Health, Safety, Security and Quality (EHSS&Q) by 66% several lower consequence electrical safety events, performance remains broadly comparable with Reduce 58% reduction 99% reduction also led the ONR to serve Sellafield with an other companies in the sector. The UK Government has set a commitment domestic Improvement Notice. for the UK to have ‘net-zero’ greenhouse gas flights by 30% Magnox continued to deliver significant nuclear emissions by 2050, with the Scottish Government’s Following the close out of investigations, and radiological hazard reduction across many target being 2045. In support of these important Reduce waste 63% reduction 86% reduction Sellafield launched an Electrical Safety Integration fronts including nuclear materials transfer from commitments, last year we mapped the NDA generation by Programme, bringing together the learning from Harwell and intermediate level waste retrievals group’s carbon footprint for 2019/20, modelled 25% all electrical safety events to ensure an enterprise- across a number of sites. This will remain a key wide approach to its improvement activities. how this may change as our mission progresses to Reduce Reduced to 0% Reduced to focus for the next 3 to 5 years. Progress against Sellafield’s overarching Electrical 2050 and developed a roadmap of opportunities landfill 0%1 Safety Integration Plan has continued through the to reduce greenhouse gas emissions. Translating disposal to Magnox has not experienced any significant year, with performance improvements being seen. this important data into action is now an important less than 10% nuclear safety incidents. The dose to workers from radiation remains at a low level and the nuclear priority for the NDA and the other parts of the NDA Reduce paper 72% reduction 98% reduction Sellafield recorded 1 international nuclear and safety metrics have shown good performance group. use by 50% radiological event scale (INES) event in 2020/21, throughout the year. ONR’s regulation of Magnox Reduce water 27% reduction 71% reduction compared to the 5 recorded in 2019/20. The The NDA group’s carbon footprint for 2019/20 is sites has identified good safety management use by 10% event, confirmed as an INES level 1 event, occurred around 1 million tonnes of CO2 equivalent, which and continued compliance. This is demonstrated in September 2020 when a quantity of uranyl is broadly comparable with other industries. This through consistently adequate (green) ratings from nitrate liquor breached pipework through a small includes the direct emissions from the fuel we burn site specific licence condition inspections. The data has been positively influenced by most of perforation in the line. The leak occurred within for power and heat and the electricity we purchase, our employees being based at home in 2020/21. a controlled area of the site and was stopped The TRIR at the end of 2020/21 was 0.18, compared as well as indirect emissions, such as those from While the picture represents reduced travel and within 20 minutes of being discovered. Sellafield to 0.26 in 2019/20 and was below the corporate the goods and services we procure, particularly in minimal people in our offices, it does not consider has since replaced around 18 metres of pipework target of <0.39. Oversight of this rolling 12-month construction. As can be expected, the NDA makes the use of energy or other resources by employees and renewed the lagging and trace heating along metric showed a steady decline during the site up only a small component of the footprint, with working from home. approximately 120 metres of the pipeline. pause and initial restart. The organisation has the greatest contribution being from Sellafield, our maintained its Continuous Safety Improvement largest and most complex site. Detail on the NDA’s 1all non-recyclable waste from the NDA Corporate Centre is used in carbon footprint for 2020/21 can be found in the an Energy from Waste plant rather than sending to landfill.

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Operating Company Operating Company Safety performance (continued) Environmental performance

Plan to deliver its aim of continual improvement minor injury to an individual. Sellafield Ltd under closer scrutiny by the EA is the site sewage of safety performance. 2020/21 focus areas treatment works. The EA are now satisfied that included decommissioning mindset and a Target Against the significant challenges of COVID-19 there the existing programme of improvement work Zero campaign which covers a ‘watch list’ of good Dounreay Site Restoration Ltd (DSRL) has been positive progress across environmental comprising engineering developments at the facility practices and behaviours which foster the safest management at Sellafield. The launch of a new and opportunities to improve the drainage network, culture for a decommissioning environment. Safety Like other organisations, COVID-19 was the Manifesto and Enterprise Strategy clearly defines together with improvements to resources, training specific improvements in electrical safety, asbestos dominant issue for DSRL in 2020/21 and the site was the purpose being to create a clean and safe and operating techniques remains appropriate to and lifting were also progressed. Reducing our safety demobilised to a quiescent state. environment for future generations and the profile return the facility to a reliably compliant position. asbestos hazard at sites continued to be a priority of Environment has never been higher. This is There is an ongoing leak at one of the facilities on for in 2020/21 and will continue to be so for 2021/22. Decommissioning work recommenced in a further underpinned by the establishment of a site which has been reported as a level 2 Incident controlled manner in line with COVID-19 regulations Sustainability Steering Group and introduction of a on the International Nuclear Event Scale (INES) and The level of sickness absence showed a downward and guidance, with a significant proportion of set of Sustainability Principles and Carbon Reduction is the focus of intense effort to retrieve radioactive trend during 2020/21. Implementation of wellbeing the workforce working from home. The need Principles. waste from the facility and to address the leak. initiatives to enhance staff resilience and wellbeing Both the ONR and the EA are closely involved in to balance the COVID-19 risk with other hazards was a focus for the Executive and delivered through the regulation of this event with the EA issuing has been an ongoing focus. Through this period, Work has continued to build around carbon the Continuous Safety Improvement Plan. a variation to the site permit to include some safety performance was good but significant management, taking the baseline carbon footprint and 12% reductions achieved in the previous year as improvement conditions relating to the leak. effort went into supervision and the proper a basis to identify potential reduction opportunities Radioactive Waste Management application of controls to ensure standards were over the coming decades. Alongside the priority The work reported in 2019 by Sellafield’s Nuclear (RWM) Ltd maintained through the normalisation of COVID-19 delivery of high hazard risk reduction, Sellafield Intelligence and Independent Oversight (NIIO) arrangements and transition to NDA ownership. The is seeking to deliver improved environmental on environmental leadership has been revisited, Overall, the RWM safety performance for 2020/21 TRIR at the end of 2020/21 was 0.04, compared to outcomes for the site. with positive indicators pointing towards a much was good, safely maintaining essential operations 0.2 in 2019/20 and was below the corporate target stronger environmental culture developing across and successfully managing the implications of the of <0.1. Following the successful major review of the the business. COVID-19 pandemic. Unfortunately, there was site radioactive substances activities permit, the one Reporting of Injuries, Diseases and Dangerous introduction of the varied permit was delayed due Occurrences Regulations (RIDDOR) reportable injury Nuclear Transport Solutions (NTS) Dounreay Site Restoration Ltd (DSRL) to the impacts of COVID-19 and came into effect during the year involving a tier 2 contractor who in October 2020. The management of permit sustained a finger fracture. The newly formed transport operational company, At DSRL, improvements attained in previous years NTS, comprising Direct Rail Services Ltd. (DRS) arrangements and compliance throughout the were largely sustained with low number of events. year has been a significant challenge. From the and International Nuclear Services Ltd. (INS), Substantial work was carried out, validated, and Low Level Waste Repository very earliest notification of COVID-19 restrictions, maintained a good safety performance throughout submitted to the Scottish Environment Protection Sellafield worked with the Environment Agency Agency (SEPA) in response to regulatory notices (LLWR) Ltd the year. DRS achieved a 30% improvement in (EA) to ensure that risks and priorities continued received in previous years. There was an event, for the All Accident Frequency Rate, meaning fewer Overall, the LLWR Safety performance was excellent to be appropriately managed, including use of which SEPA issued a warning letter, over very low accidents occurred. Both DRS and INS achieved full provisions under two newly introduced Regulatory for the year, safely maintaining all essential levels of radioactivity in surface water discharges. accreditation to the health and safety management Position Statements. The actions taken together operations and keeping the site open throughout DSRL is now working to a plan with SEPA to include ISO standard 45001. DRS significantly improved with temporary working arrangements introduced appropriate, low, limits for radioactivity in these the COVID-19 lockdowns. Construction and their action close out rate achieving a score of by Sellafield (including Examination, Maintenance, discharges to regularise this situation. demolition work have progressed across the site, 98%, compared with less than 60% achieved in Inspection and Testing (EMIT) of environmental For much of the period DSRL was working under a with the completion of demolition of the Plutonium the previous year. INS successfully rolled out equipment) have been reviewed by the EA, with Contingency Plan in support of SEPA’s Temporary Contaminated Material recovery facilities and large- DriveTec from the AA, recognised as a world positive assessment findings. Regulatory Position relating to COVID-19. scale mobilisation of the Repository Development leader in managing fleet risk from driving at work. Programme preliminary works for the construction DRS undertook a full operational review against The site continued to have environmental events. COVID-19 precautions impacted upon the ability These are subject to investigation by Sellafield and of the cap with no recordable injuries. The TRIR Rail Industry Risk Maturity Model with a positive to comply in full with the conditions of the permits the EA and have been assessed as having minor at the end of 2020/21 was 0.29, compared to 0.00 outcome and INS’ Risk Assessment Governance held by DSRL. This has been proactively managed or no environmental effect. An area that has been and as the various phases of COVID-19 occurred, in 2019/20 and was above the corporate target of Review was ahead of the programme plan. <0.25. The change in TRIR reflects one relatively

104 105 NDA Annual Report and Accounts 2020/21 NDA Annual Report and Accounts 2020/21

Operating Company Environmental performance (continued)

compliance was maximised in line with COVID-19 Low Level Waste Repository secure controls. The remaining issues relate primarily to throughput of laboratory analysis. (LLWR) Ltd This has been the subject of regular discussion with SEPA. LLWR Ltd made progress in 2020/21 with its Repository Development Programme which will see an important milestone for environment Magnox Ltd protection in the future involving capping Vault 8. Environmental Performance continues to be good at The COVID-19 pandemic had a substantial impact LLWR. on Magnox culminating in an operational pause from late March to June 2020. During this period environmental compliance was successfully Other companies and subsidiaries managed, utilising the appropriate Regulatory Elsewhere, there has been good environmental Position Statements where available. Despite the performance in our businesses NDA Properties Ltd, disruption of COVID-19, good progress continued INS/PNTL, RWM and DRS. to be made on hazard reduction. For example, the Liquid Effluent Treatment Plant land remediation project at Harwell was able to resume operations in August 2020 returning to pre-pandemic capacity in October. During January 2021 the project shipped the thousandth consignment of Very Low Level Waste, a result of remediation works.

Magnox completed an Environmental Culture Survey in response to apparent trends identified from event learning. The survey identified the 3 key areas for improvement as the effective integration of environmental considerations into key company Financial processes, the integration of environmental professionals with delivery teams and opportunities to improve training provision in specific areas. An summary improvement plan has been developed to address these issues. The company also launched their sustainability strategy, which is based around the 5 key goals of, Governance, Supply Chain, Employees, Community and Environment.

106 107 NDA Annual Report and Accounts 2020/21 NDA Annual Report and Accounts 2020/21

The NDA spend on 3,500 tackling Financial summary 2020/21 the legacy 3,000 2,500

The proportion of the 2,000 The NDA spend on tackling NDA expenditure tackling 1,500 the legacy Spend on tackling £2,440m the nuclear legacy has 1,000 the legacy increased since 2005, with £2,603m 500 The bulk of the NDA’s budget a corresponding reduction is directed towards tackling the Commercial and £335m 0 in commercial costs as 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 17-18 18-19 19-20 20-21 nuclear legacy, by funding the energy costs £339m commercial operations wind NDA Spend on Tackling the Legacy Spend on tackling the nuclear legacy Commercial and energy trading NDA central costs Fees paid to SLCs Other decommissioning carried out by Site NDA Central costs £55m down Licence Companies. The remainder £53m funds commercial operations, industry-wide costs, fees to Site Fees paid to businesses £16m £40m Licence Companies and the NDA’s 3,500 own running costs Other 2020/21 The NDA spend by £213m business 3,000 £134m 2019/20 2,500

Sellafield has always been 2,000 the NDA’s largest area The NDA spend by business. Sellafield £2,082m of spend and has been 1,500 £2,084m increasingly prioritised in 1,000 Magnox £408m Spend in 2020/21 was £3.059 billion. recent years as funding has 500 More than 68% of this was spent £477m been directed towards the 0 at Sellafield, reflecting the priority LLWR, Springfields, £118m estate’s highest hazards. 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 18-19 19-20 20-21 Capenhurst given to the site. £124m £3,059m Magnox Dounreay Nuclear materials and transport LLWR, Springfields, Capenhurst NDA (including GDF) Sellafield Dounreay £169m 2020/21 Expenditure at Sellafield has in- £188m £3,169m creased during the NDA’s existence NDA (including Energy, RWM) £233m 2019/20 and now stands at £2.1 billion per £246m year. 2020/21 Nuclear materials and £49m transport £50m 2019/20 The NDA Corporate Centre net spend 70 60 After the early years in establishing the NDA’s 50 The NDA Corporate Centre structure and programme, 40 annual running costs net spend £55m £53m 30 2020/21 2019/20 stabilized at below £40 million 20 The NDA’s own running costs Staff costs per year. In 2019/20 the NDA invested 10 increased to £55 million per year, Other £40m £39m in enhanced capability and or approximately 1.8% of overall 0 expenditure, reflecting the NDA’s capacity in order to ensure 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 18-19 19-20 20-21 £15m £14m investment in enhanced capability the successful delivery of its and capacity. mission

1,400

The NDA’s income 1,200 Reprocessing/ £275m waste contracts £290m The NDA’s income 1,000 The NDA recognised income of over £0.6 billion in the year, with almost Future fuel contract £213m In recent years electricity 800 £217m £0.5 billion arising from reprocess- generation income 600 ing and management of spent fuels Energy sales has reduced, leaving £4m 400 and waste. £23m reprocessing and management of spent fuels 200 Nuclear materials £49m and waste as the dominant and transport £221m 0 source of income. 12-13 13-14 14-15 15-16 16-17 17-18 18-19 19-20 20-21 Other Reprocessing/waste contracts Spent fuel management Nuclear materials and transport Other Energy Sales £71m 2020/21 £38m 2019/20

Note the figures in the above, and following, graphs are prepared on the basis of Government financial reporting, which differs in part from the basis used to prepare the financial statements

108 109 NDA Annual Report and Accounts 2020/21 NDA Annual Report and Accounts 2020/21

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

The expenditure profile illustrates a downward trend in expenditure over the next 50 years, following The Nuclear Provision is a single point number in the Statement of a short-term peak over the next 10 years, as sites enter into Care and Maintenance with subsequent Financial Position which represents the discounted estimated cost of increases in expenditure in the period from 2070 when final site clearance work on Magnox sites is the decommissioning mission. undertaken. Total expenditure profile (£m, undiscounted) The NDA management’s best It is important to understand the • The value provided for estimate of the future costs basis of this estimate and the 2020/21 released from the of the estate is based on an inherent uncertainty around it, provision -£2.9 billion assumed inventory of materials, and therefore that it is simply a • Increases from inflation +£1.4 Total expenditure profile (£m, undiscounted) 3,500

using strategies for retrieval and single point in a credible range of billion 3,000

disposal over several decades. potential outcomes. • Unwinding of the existing 2,500

Each of these elements (quantity, discount applied to the 2,000 method and time to treat) is Changes in 2020/21 provision every year 1,500 uncertain in their own right, as negligible in 2021 1,000 is the cost of developing the estimate Authority • The impact of the changes in 500 0 necessary technology and plans discount rates £0.7 billion 2021 2031 2041 2051 2061 2071 2081 2091 2101 2111 2121 2131 to deal with these activities. The The discounted nuclear provision • Cost estimate changes which Sellafield Rest of programme quality of the forecast becomes at the end of 2019/20 was increase the liability estimate less certain further into the £134.9 billion. Since then the by £1.7 billion. future, and acceptable standards movements have been: of clean-up and end states may These movements bring the change. 2020/21 Authority estimate to £135.8 billion discounted. Movements

2019/20 2019/20 Unwind Discount Released Inflation Other Movement 2020/21 2020/21 The nuclear provision is the best estimate of how much our mission will cost over approximately 120 years un dis- of dis- rate in year cost dis- un discounted discounted counted count change change counted discounted

Movement in Nuclear Provision 2020-21 (£ billion) £m £m £m £m £m £m £m £m £m Sellafield (96,515) (98,529) 28 (492) 2,074 (865) (1,490) (745) (96,605) (99,274) Magnox (19,718) (20,142) (10) (111) 475 (279) (180) (105) (19,698) (20,247) Dounreay (2,564) (2,705) - (41) 182 (39) (14) 88 (2,432) (2,617) LLW (606) (632) 3 (5) 26 (9) (16) (1) (604) (633) Repository INS (46) (47) - - 1 (1) - - (45) (47) Contracts Capenhurst (1,479) (1,521) 4 (10) 89 (22) (67) (6) (1,477) (1,527) Springfields (628) (634) 1 (1) 25 (9) - 16 (613) (618) GDF (10,499) (10,657) (11) (37) 64 (159) - (143) (10,592) (10,800) Authority (132,055) (134,867) 15 (697) 2,936 (1,383) (1,767) (896) (132,066) (135,763) NDA group (20) (21) - (1) - - (4) (5) (23) (26) companies Group 142 142 - - - - 427 427 569 569 Provision Adjustment NDA Group (131,933) (134,746) 15 (698) 2,936 (1,383) (1,344) (474) (131,520) (135,220)

Diagram not to scale

110 111 NDA Annual Report and Accounts 2020/21 NDA Annual Report and Accounts 2020/21

Parliamentary Parliamentary accountability disclosures 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 Remote contingent liabilities note is to report on losses and special payments of particular interest to Parliament. Total losses during Remote contingent liabilities not required to be disclosed under IAS 37 but included for parliamentary the year were £2,575,559 (2020: £4,623,843). reporting and accountability purposes:

Type of loss 2021 2021 2020 2020 Total Number of cases Total Number of cases £ £ (a) The NDA has non-quantifiable contingent the suspension of projects and operations at the Cash losses - - - - liabilities arising from indemnities given as part Authority’s sites. In accordance with accounting Store losses 2,111,024 40 4,429,784 100+ of the contracts for the management of the site standards, no contingent assets can be recognised. Losses of pay, allowances and - - - - licence companies. These indemnities are in superannuation respect of the uninsurable residual risk that courts (c) The UK left the EU in accordance with Article 50 Fruitless payments 83,883 127 70,057 333 in a country which is not party to the Paris and on 31 January 2020 and the Withdrawal Agreement Constructive losses - - - - Brussels Conventions on third party liabilities in between the UK and the EU became legally Claims waived or abandoned - - - - the field of nuclear energy may accept jurisdiction binding at the same time. Book-keeping losses - - 11,984 1 to determine liability in the event of a nuclear Failure to make adequate charges - - - - incident. Subsequent changes in legislation, regulation and Exchange rate fluctuation losses 48,573 1 112,018 1 funding arrangements are subject to the outcome Special payments 332,079 1 - - Indemnities are provided to the previous PBOs of the negotiations. As a result, an unquantifiable Total 2,575,559 4,623,843 Sellafield, Magnox, Dounreay and LLWR and contingent liability is disclosed. In accordance with covering the periods in their ownership. These accounting standards, no contingent assets can be Store losses relate to the write-off of stores item Special payments relate to a fine (£320,000) and are not treated as contingent liabilities within the recognised. on licence sites. In 2020 the store losses included associated costs (£12,079) paid by Sellafield Ltd meaning of IAS 37 since the possibility of a transfer the write-off of chemicals purchased for use in following a prosecution at Carlisle Magistrates of economic benefit in settlement is considered the Thorp reprocessing plant at Sellafield, and Court in December 2020 in relation to an incident too remote. no longer required following the conclusion of on 24 April 2020, in which an employee was reprocessing activity at the plant in 2019 (value injured while working on electrical equipment. The (b) In November 2019 a novel strain of coronavirus £916,418). prosecution was brought by the Office for Nuclear was detected and spread rapidly, leading the Regulation (ONR) under Section 2 (1) of the Health World Health Organisation to declare a pandemic Book-keeping losses in 2020 relate to the writing off and Safety at Work Act. on 11 March 2020. The ongoing disruption caused David Peattie of a historic debt associated with a Magnox site. by the pandemic has created significant economic Accounting Officer and A contract loss provision in respect of potentially uncertainty, and this uncertainty is expected Group Chief Executive Officer onerous commercial contracts to manage spent to continue throughout 2021. As a result, an fuel and waste is included within other provisions (note 25 to accounts) and is not included in the unquantifiable contingent liability is disclosed, 15 July 2021 losses disclosed above. relating to potential additional costs resulting from

112 113 NDA Annual Report and Accounts 2020/21 NDA Annual Report and Accounts 2020/21

of the requirements set out in International Accounting to you if, in my opinion: Standards as interpreted by HM Treasury’s Government • adequate accounting records have not been kept or Financial Reporting Manual, which require entities to adopt returns adequate for my audit have not been received The report of the Comptroller and Auditor the going concern basis of accounting in the from branches not visited by my staff; or preparation of the financial statements where it anticipated • the financial statements and the parts of the that the services which they provide will continue into the Accountability Report to be audited are not in General to the Houses of Parliament future. agreement with the accounting records and returns; or Opinion on financial statements Opinion on regularity • certain disclosures of remuneration specified by HM Other Information Treasury’s Government Financial Reporting Manual are I have audited the financial statements of the Nuclear In my opinion, in all material respects, the income and not made; or The other information comprises information included in Decommissioning Authority for the year ended 31 expenditure recorded in the financial statements have • I have not received all of the information and the annual report, but does not include the parts of March 2021 under the Energy Act 2004. The financial been applied to the purposes intended by Parliament explanations I require for my audit; or the Accountability Report described in that report as statements comprise: the Group and Authority Statements and the financial transactions recorded in the financial • the Governance Statement does not reflect having been audited, the financial statements and my of Comprehensive Net Expenditure, Financial Position, statements conform to the authorities which govern them. compliance with HM Treasury’s guidance. Cash Flows, Changes in Taxpayers’ Equity; and the related auditor’s report thereon. The Authority and the notes, including the significant accounting policies. Accounting Officer is responsible for the other information. These financial statements have been prepared under Basis for opinions My opinion on the financial statements does not cover Responsibilities of the Authority and the accounting policies set out within them. I have also the other information and except to the extent otherwise I conducted my audit in accordance with International Accounting Officer for the financial audited the information in the Accountability Report explicitly stated in my report, I do not express any form Standards on Auditing (ISAs) (UK), applicable law and that is described in that report as having been audited. of assurance conclusion thereon. In connection with my statements Practice Note 10 ‘Audit of Financial Statements of Public The financial reporting framework that has been applied audit of the financial statements, my responsibility is to Sector Entities in the United Kingdom’. My responsibilities in their preparation is applicable law and International read the other information and, in doing so, consider As explained more fully in the Statement of Accounting under those standards are further described in the Accounting Standards as interpreted by HM Treasury’s whether the other information is materially inconsistent Officer’s Responsibilities, the Authority and the Auditor’s responsibilities for the audit of the financial Government Financial Reporting Manual. with the financial statements or my knowledge obtained in Accounting Officer, is responsible for: statements section of my report the audit or otherwise appears to be materially misstated. • the preparation of the financial statements in Those standards require me and my staff to comply with I have also audited the information in the Accountability If I identify such material inconsistencies or apparent accordance with the applicable financial reporting the Financial Reporting Council’s Revised Ethical Standard Report that is described in that report as having been material misstatements, I am required to determine framework and for being satisfied that they give a true 2019. I have also elected to apply the ethical standards audited. whether this gives rise to a material misstatement in the and fair view; relevant to listed entities. I am independent of the Nuclear financial statements themselves. If, based on the work • internal controls as the Authority and the Accounting Decommissioning Authority in accordance with the ethical In my opinion, the financial statements: I have performed, I conclude that there is a material Officer determines is necessary to enable the requirements that are relevant to my audit of the financial • the financial statements give a true and fair view misstatement of this other information, I am required to preparation of financial statement to be free from statements in the UK. My staff and I have fulfilled our of the state of the group’s and of the Nuclear report that fact. material misstatement, whether due to fraud or error. other ethical responsibilities in accordance with these Decommissioning Authority’s affairs as at 31 March • assessing the Nuclear Decommissioning Authority’s requirements. 2021 and of the group’s and the Authority’s net I have nothing to report in this regard. ability to continue as a going concern, disclosing, I believe that the audit evidence I have obtained is expenditure after taxation for the year then ended; as applicable, matters related to going concern sufficient and appropriate to provide a basis for my and; and using the going concern basis of accounting opinion. Opinion on other matters • the financial statements have been properly prepared unless the Authority and the Accounting Officer anticipates that the services provided by the Nuclear in accordance with the Energy Act 2004 and Secretary In my opinion, based on the work undertaken in the Decommissioning Authority will not continue to be of State directions issued thereunder. course of the audit: Conclusions relating to going provided in the future. concern • the parts of the Accountability Report to be audited Emphasis of matter – nuclear have been properly prepared in accordance with The Nuclear Decommissioning Authority’s use of the going Secretary of State directions made under the Energy Auditor’s responsibilities for the provisions Act 2004; and concern basis of accounting in the preparation of audit of the financial statements the financial statements is appropriate. • the information given in the Performance and Without qualifying my opinion, I draw attention to the Accountability Reports for the financial year for which disclosures made in notes 3 and 24 to the financial My responsibility is to audit and report on the financial Based on the work I have performed, I have not identified the financial statements are prepared is consistent with statements concerning the uncertainties inherent in the statements in accordance with the Energy Act 2004. any material uncertainties relating to events or the financial statements. nuclear decommissioning provisions. As set out in these My objectives are to obtain reasonable assurance about conditions that, individually or collectively, may cast notes, given the very long timescales involved and the whether the financial statements as a whole are free significant doubt on the Nuclear Decommissioning complexity of the plants and materials being handled, Matters on which I report by from material misstatement, whether due to fraud or error, Authority’s ability to continue as a going concern for a a considerable degree of uncertainty remains over the and to issue a report that includes my opinion. period of at least twelve months from when the financial exception value of the liability for decommissioning nuclear sites Reasonable assurance is a high level of assurance but is statements are authorised for issue. not a guarantee that an audit conducted in designated by the Secretary of State. Significant changes In the light of the knowledge and understanding of the accordance with ISAs (UK) will always detect a material to the liability could occur as a result of subsequent Nuclear Decommissioning Authority and its environment My responsibilities and the responsibilities of the Authority misstatement when it exists. Misstatements can arise information and events which are different from the obtained in the course of the audit, I have not identified and the Accounting Officer with respect to going concern from fraud or error and are considered material if, current assumptions adopted by the Authority. material misstatements in the Performance and are described in the relevant sections of this report. individually or in the aggregate, they could reasonably Accountability report / the Directors’ report. I have nothing The going concern basis of accounting for Nuclear be expected to influence the economic decisions of users Decommissioning Authority is adopted in consideration to report in respect of the following matters which I report

114 115 NDA Annual Report and Accounts 2020/21 NDA Annual Report and Accounts 2020/21

taken on the basis of these financial statements. whether the judgements made in making accounting I design procedures in line with my responsibilities, estimates are indicative of a potential bias; and outlined above, to detect material misstatements in evaluating the business rationale of any significant respect of non-compliance with laws and regulation1, transactions that are unusual or outside the normal including fraud. course of business; • performing analytical procedures to identify any My procedures included the following: unusual or unexpected relationships that may indicate • Inquiring of management, the Nuclear risks of material misstatement due to fraud; and Decommissioning Authority’s head of internal audit • reviewing internal audit reports and those charged with governance, including obtaining and reviewing supporting documentation I also communicated relevant identified laws and relating to the Nuclear Decommissioning Authority’s regulations and potential fraud risks to all engagement policies and procedures relating to: team members including internal specialists and significant component audit teams and remained alert to any o identifying, evaluating and complying with laws indications of fraud or non-compliance with laws and and regulations and whether they were regulations throughout the audit. aware of any instances of non-compliance; o detecting and responding to the risks of fraud A further description of my responsibilities for the audit of and whether they have knowledge of any the financial statements is located on the Financial actual, suspected or alleged fraud; and Reporting Council’s website at: www.frc.org.uk/ o the internal controls established to mitigate risks auditorsresponsibilities. This description forms part of my related to fraud or non-compliance with report. laws and regulations including the Group’s controls relating the to Energy Act 2004, and In addition, I am required to obtain evidence sufficient to Managing Public Money give reasonable assurance that the income and expenditure reported in the financial statements have been • discussing among the engagement team including applied to the purposes intended by Parliament significant component audit teams regarding how and and the financial transactions conform to the authorities where fraud might occur in the financial statements which govern them. and any potential indicators of fraud. As part of this discussion, I identified potential for fraud in the I communicate with those charged with governance following areas: revenue recognition and posting of regarding, among other matters, the planned scope and unusual journals; and timing of the audit and significant audit findings, including • obtaining an understanding of the Nuclear any significant deficiencies in internal control that I identify Decommissioning Authority and Group’s framework during my audit. of authority as well as other legal and regulatory frameworks that the Nuclear Decommissioning I have no observations to make on these financial Authority and Group operates in, focusing on those statements. Annual accounts laws and regulations that had a direct effect on the financial statements or that had a fundamental effect Gareth Davies on the operations of the Nuclear Decommissioning 16 July 2021 Authority and Group. The key laws and regulations Comptroller and Auditor General I considered in this context included the Energy Act National Audit Office 2004, Managing Public Money, Employment Law, and 157-197 Buckingham Palace Road Tax Legislation Victoria London In addition to the above, my procedures to respond to SW1W 9SP identified risks included the following: • reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with relevant laws and regulations discussed above; • enquiring of management, the Audit Committee and in-house legal counsel concerning actual and potential litigation and claims; • reading minutes of meetings of those charged with governance and the Board; • in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing

116 117 NDA Annual Report and Accounts 2020/21 NDA Annual Report and Accounts 2020/21 Statement of Financial Position as at 31 March 2021 NDA Group Authority 2021 2020 2021 2020 note £m £m £m £m Property, plant and equipment 11 636 641 315 341 Investments in subsidiaries 12 - - 259 259 Annual accounts Recoverable contract costs 13 1,447 1,425 1,447 1,425 Finance lease receivables 19 43 44 71 72 Trade and other receivables 20 37 36 40 37 Defined benefit pension scheme asset 26 - - 9 5 Statement of Comprehensive Net Expenditure Total non-current assets 2,163 2,146 2,141 2,139 for the year ended 31 March 2021 Inventories 15 69 103 15 48 Other investments 18 547 428 - - Finance lease receivables 19 1 1 4 4 Trade and other receivables 20 211 343 381 515 Cash and cash equivalents 21 199 215 125 95 NDA Group Authority Total current assets 1,027 1,090 525 662 2021 2020 2021 2020 Total assets 3,190 3,236 2,666 2,801 note £m £m £m £m Expenditure Trade and other payables 22 (1,114) (1,197) (1,040) (1,120) Authority administration expenditure 5 61 53 61 3 5 Lease liabilities 23 (25) (25) (1) (3) Programme expenditure 6 3,230 3,351 3,194 3,306 Nuclear provisions 24 (3,142) (2,941) (3,142) (2,941) Adjustments to provisions 7 374 4,833 786 4,092 Other provisions 25 (14) (18) (7) (7) Depreciation and impairment 8 77 87 26 49 Total current liabilities (4,295) (4,181) (4,190) (4,071) 3,742 8,324 4,067 7,50 0 Total assets less current liabilities (1,105) (945) (1,524) (1,270) Income 9 (627) (740) (564) (720)

Net expenditure/(income) before interest and taxation 3,115 7,584 3,503 6,780 Trade and other payables 22 (1,503) (1,481) (1,503) (1,477) Lease liabilities 23 (54) (44) (29) (29) Nuclear provisions 24 (132,078) (131,805) (132,621) (131,926) Interest receivable 4 (60) (2) (1) - Other provisions 25 (105) (130) (60) (103) Interest payable 10 14 - - Defined benefit pension scheme deficit 26 (576) (149) - - Net interest payable on defined benefit pension schemes 26 3 22 - - Total non-current liabilities (134,316) (133,609) (134,213) (133,535)

Net expenditure/(income) before taxation 3,068 7,618 3,502 6,780 Taxation 10 2 - 2 - Net liabilities (135,421) (134,554) (135,737) (134,805)

Net expenditure/(income) after taxation for the year 3,070 7,618 3,504 6,780 Taxpayers’ equity Revaluation reserve 36 30 5 5 Other comprehensive expenditure/(income): General reserve (135,459) (134,586) (135,742) (134,810) Deficit/(surplus) arising on revaluation of property, plant and equipment 11 (6) (1) - - Total taxpayers’ equity (135,423) (134,556) (135,737) (134,805) Net recognised (gain)/loss on defined benefit pension schemes 26 372 (877) (3) (22) Non-controlling interests 27 2 2 - -

Total comprehensive net expenditure/(income) for the year 3,436 6,740 3,501 6,758 Total equity (135,421) (134,554) (135,737) (134,805)

The related notes numbered 1 to 30 form part of these financial statements. The financial statements on page 118 to 165 were approved by the Board and authorised for issue by the Authority refers to the balances within the NDA itself, with NDA Group balances incorporating the Authority and Accounting Officer on 15 July 2021 its subsidiaries. Details of the subsidiaries are given in note 12.

David Peattie, Accounting Officer and Group Chief Executive Officer. 15 July 2021

The related notes numbered 1 to 30 form part of these financial statements. Authority refers to the balances within the NDA itself, with NDA Group balances incorporating the Authority and its subsidiaries. Details of the subsidiaries are given in note 12.

118 119 NDA Annual Report and Accounts 2020/21 NDA Annual Report and Accounts 2020/21

Statement of Cash Flows Statement of Changes in Taxpayers’ Equity for the year ended 31 March 2021 for the year ended 31 March 2021

NDA Group Authority General Revaluation Total 2021 2020 2021 2020 NDA Group £m £m £m Notes £m £m £m £m Balance at 31 March 2019 (130,541) 29 (130,512) Cash flows from operating activities Deficit arising on revaluation of PPE - 1 1 Net expenditure after taxation for the year SoCNE (3,070) ( 7,618) (3,504) (6,780) Gross grants from parent department 3,317 - 3,317 Adjustments for: Amounts surrenderable to Consolidated Fund (a) (621) - (621) Interest receivable 4 (60) (2) (1) - Actuarial gain/(loss) on defined benefit pension schemes 877 - 877 Interest payable 10 14 - - Net expenditure (7,618) - (7,618) Net interest payable on defined benefit pension schemes 26 3 22 - - Balance at 31 March 2020 (134,586) 30 (134,556) Net of pension service costs over cash contributions paid 51 94 (1) - Depreciation of property, plant and equipment 11 82 73 31 35 Impairment of property, plant and equipment 11 - 9 - 9 Surplus arising on revaluation of PPE - 6 6 Revalorisation of advance payments 22 61 126 61 126 Gross grants from parent department 3,257 - 3,257 Amortisation of recoverable contract costs 13 102 101 102 101 Amounts surrenderable to Consolidated Fund (a) (688) - (688) Decrease/(increase) in inventories 15 34 (21) 33 (14) Actuarial gain/(loss) on defined benefit pension schemes (372) - (372) Decrease/(increase) in receivables 132 (169) 131 (175) Net expenditure (3,070) - (3,070) Increase/(decrease) in payables (124) (102) (128) (86) Increase/(decrease) in nuclear provisions Balance at 31 March 2021 (135,459) 36 (135,423) impacting net expenditure 559 4,798 985 4,067 Increase/(decrease) in other provisions impacting net expenditure (182) 35 (196) 25 General Revaluation Total Net cash outflow from operating activities (2,402) (2,640) (2,487) (2,692) Authority £m £m £m

Cash flows from investing activities Balance at 31 March 2019 (130,748) 4 (130,744) Interest received 4 60 2 1 - Interest paid (10) (14) - - Deficit arising on revaluation of PPE - 1 1 Purchases of property, plant and equipment (70) (32) (5) (4) Gross grants from parent department 3,317 - 3,317 Disposals of property, plant and equipment 11 4 3 - 2 Amounts surrenderable to Consolidated Fund (a) (621) - (621) Purchase of investments (119) 22 - - Actuarial gain/(loss) on defined benefit pension schemes 22 - 22 Net cash outflow from investing activities (135) (19) (4) (2) Net expenditure (6,780) - (6,780) Balance at 31 March 2020 (134,810) 5 (134,805) Cash flow from financing activities Grants from parent department SoCTE 3,257 3,317 3,257 3,317 Surplus arising on revaluation of PPE - - - Surrender of receipts to Consolidated Fund SoCTE (736) (556) (736) (556) Gross grants from parent department 3,257 - 3,257 2,761 2,761 Net cash inflow from financing activities 2,521 2,521 Amounts surrenderable to Consolidated Fund (a) (688) - (688) Actuarial gain/(loss) on defined benefit pension schemes 3 - 3 Net increase/(decrease) in cash and cash equivalents (16) 102 30 67 Cash and cash equivalents at beginning of period 21 215 113 95 28 Net expenditure (3,504) - (3,504)

Cash and cash equivalents at end of period 21 199 215 125 95 Balance at 31 March 2021 (135,742) 5 (135,737)

The revaluation reserve is used to record the increases in the fair value of property, plant and equipment carried at valuation and decreases to the extent that such decrease relates to an increase on the same asset previously recognised in taxpayers’ equity. The general reserve is used to record the deficit or surplus arising from the Statement of Comprehensive Net Expenditure, and the deficit or surplus arising on the transfer of assets and liabilities to the NDA from other parts of the public sector.

(a) Surrender of receipts to Consolidated Fund of £688 million (2020: £621 million) included £20 million payable as at 31 March 2021 (2020: £68 million at 31 March 2020). The amount paid in cash in the year was £736 million (2020: £556 million).

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Notes to the financial statements Notes to the financial statements - continued for the year ended 31 March 2021

2.3 Basis of consolidation 2.5 Research and development expenditure 1. General information 2. Statement of significant The consolidated financial statements incorporate the Expenditure on research activities is recognised as an accounting policies financial statements of the NDA and entities controlled by expense in the period in which it is incurred. The NDA is an executive NDPB that was established on the NDA (its subsidiary undertakings) made up to 31 March 22 July 2004 under the Energy Act 2004 and is currently 2.1 Basis of preparation each year. Control is achieved where the NDA has the 2.6 Taxation sponsored by BEIS. The NDA was created with the These financial statements have been prepared under the power to govern the financial and operating policies of an Please see note 10 and 14 for the tax charge and deferred primary objective of overseeing and monitoring the accounts direction issued by the Secretary of State for investee entity so as to obtain benefits from its activities. taxation respectively. decommissioning and clean-up of the UK’s civil nuclear Energy and Climate Change in accordance with section 26 legacy. The Financial Review on pages 18 to 19 provides of the Energy Act 2004. The accounts direction requires All intra-group transactions, balances, income and expenses VAT is accounted for in that amounts are shown net of VAT further information on the NDA’s operations. compliance with the Government Financial Reporting are eliminated on consolidation. except: Manual (FReM) and any other guidance issued by HM (i) Irrecoverable VAT is charged to profit or loss, and included under the heading relevant to the type of expenditure These financial statements are presented in pounds sterling Treasury. The NDA has a specific direction in respect of the 2.4 Foreign currencies (ii) Irrecoverable VAT on the purchase of an asset is included in and all values are rounded to the nearest million (£m) accounting for waste management assets on an historical The individual financial statements of each Group entity the capitalised purchase cost of the asset except when otherwise indicated. cost basis. The accounting policies contained in the FReM are presented in the currency of the primary economic apply International Financial Reporting Standards (IFRS) environment in which it operates (its functional currency). For the purpose of the consolidated financial statements, The net amount due to, or from, HM Revenue & Customs as adapted or interpreted for the public sector context. in respect of VAT is included within payables or receivables the results and financial position of each Group entity Where the FReM permits a choice of accounting policy, the respectively within the statement of financial position. accounting policy which is judged to be most appropriate are expressed in pounds sterling, which is the functional currency of the NDA, and the presentation currency for the to the particular circumstances of the NDA for the purpose 2.7 Impairment of non-financial assets consolidated financial statements. of giving a true and fair view has been selected. The At each reporting date, the Group reviews the carrying significant accounting policies adopted by the NDA are amounts of its non-financial assets to determine whether In preparing the financial statements of the individual described below. They have been applied consistently there is any indication that those assets have suffered reporting entities, transactions in currencies other than in dealing with items that are considered material to the an impairment loss. If any such indication exists, the the entity’s functional currency (foreign currencies) are financial statements, unless otherwise stated. recoverable amount of the asset is estimated in order recorded at the rates of exchange prevailing on the dates of to determine the extent of the impairment loss (if any). the transactions or at the contracted rate if the transaction These financial statements have been prepared on the Where the asset does not generate cash flows that are is covered by a forward foreign exchange contract. At historical cost basis, except for the revaluation of property, independent from other assets, the Group estimates the each reporting date, monetary assets and liabilities that plant and equipment (other than waste management recoverable amount of the cash-generating unit to which are denominated in foreign currencies are retranslated at assets). Investments, financial assets and financial liabilities the asset belongs. the rates prevailing on the reporting date. Non-monetary (including derivative financial instruments) are measured at Recoverable amount is the higher of fair value less costs items carried at fair value that are denominated in foreign amortised cost. to sell and value in use. In assessing value in use, the currencies are translated at the rates prevailing at the date estimated future cash flows are discounted to their present when the fair value was determined. Non-monetary items The consolidated statement of financial position at 31 value using a pre-tax discount rate that reflects current that are measured in terms of historical cost in a foreign March 2021 shows net liabilities of £135 billion (2020: £135 market assessments of the time value of money and the currency are not retranslated. Exchange differences are billion). This reflects the inclusion of liabilities falling due risks specific to the asset for which the estimates of future recognised in the statement of net expenditure in the in future years which, to the extent that they are not to be cash flows have not been adjusted. met from the NDA’s other sources of income, may only period in which they arise. be met by future grants in aid from the NDA’s sponsoring If the recoverable amount of an asset (or cash-generating For the purpose of presenting consolidated financial department, BEIS. Under the normal conventions applying unit) is estimated to be less than its carrying amount, the statements, the assets and liabilities of the Group’s foreign to parliamentary control over income and expenditure, such carrying amount of the asset (or cash-generating unit) is operations are translated at exchange rates prevailing grants in aid may not be issued in advance of need. Grants reduced to its recoverable amount. An impairment loss is on the reporting date. Income and expense items are in aid for 2021/22, taking into account the amounts required recognised as an expense immediately, unless the relevant translated at the average exchange rates for the period, to meet the NDA’s liabilities falling due in this year, have asset is carried at a revalued amount, in which case the unless exchange rates fluctuate significantly during that already been included in BEIS’s estimates, and these have impairment loss is treated as a revaluation decrease. been approved by Parliament. There is no reason to believe period, in which case the exchange rates at the date of transactions are used. Exchange differences arising, if that future BEIS sponsorship and future parliamentary Where an impairment loss subsequently reverses, the any, are classified as equity and recognised in the Group’s approval will not be forthcoming. It has accordingly been carrying amount of the asset (or cash-generating unit) is general reserve. Such translation differences are recognised considered appropriate to adopt a going concern basis for increased to the revised estimate of its recoverable amount, as income or as expenses in the period in which the the preparation of these financial statements. but so that the increased carrying amount does not exceed operation is disposed of. the carrying amount that would have been determined 2.2 Adoption of new and revised Standards had no impairment loss been recognised for the asset The turnover, assets and liabilities of the foreign operations The following new or revised standards were adopted (or cash-generating unit) in prior years. A reversal of an included within these consolidated financial statements are during the previous year: IFRS 16 Leases (see notes 11, 19 impairment loss is recognised as income immediately, minor in the context of the Group as a whole and therefore and 23) unless the relevant asset is carried at a revalued amount, in the potential impact of any foreign currency movements which case the reversal of the impairment loss is treated as are deemed to be negligible. The following standards have been issued but are not yet a revaluation increase. effective: IFRS 17 Insurance Contracts

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Notes to the financial statements - continued Notes to the financial statements - continued

2.8 Financial instruments De-recognition of financial assets 3. Critical accounting judgements and key 3.1 (b) The amounts of the transaction price of each Financial assets and financial liabilities are recognised in the Financial assets are derecognised only when the rights sources of estimation uncertainty contract to be allocated to each of the performance Statement of Financial Position when the Group becomes a to receive cash flows from the assets have expired or obligations in the contract party to the contractual provisions of the instrument. have been transferred and the Group has transferred In recognition of the complexity of the Authority’s major In the application of the NDA’s accounting policies, which substantially all risks and rewards of ownership. long term contracts, which typically do not feature are described in note 2, as well as in the relevant note standalone services with discreet prices, the Authority 2.8 (a) Financial assets to the financial statements, the Authority is required to All financial assets are recognised and derecognised on a has allocated the transaction price of each contract to 2.8 (b) Financial liabilities make judgements, estimates and assumptions about the trade date where the purchase or sale of a financial asset Financial liabilities are classified as financial liabilities at the performance obligations in that contract through the carrying amounts of assets and liabilities that are not is under a contract whose terms require delivery of the amortised cost. estimation of the expected future cost of fulfilling each readily apparent from other sources. The estimates and investment within the time frame established by the market performance obligation, and subsequently allocating the associated assumptions are based on historical experience concerned, and are initially measured at fair value. De-recognition of financial liabilities transaction price in proportion to the future cost of each. and other factors that are considered to be relevant. Actual Financial liabilities are derecognised when, and only when, In doing so, the Authority determines that any difference results may differ from these estimates. The estimates Loans and receivables the Group’s obligations are discharged, cancelled or they between the price and cost of each contract (notional profit and underlying assumptions are reviewed on an ongoing Finance lease receivables, trade and other receivables, and expire. or loss) will be applied to each performance obligation in basis. Revisions to accounting estimates are recognised in cash and cash equivalents, that have fixed or determinable proportion to the cost of fulfilment. the period in which the estimate is revised if the revision payments that are not quoted in an active market, are 2.8 (c) Derivative financial instruments affects only that period, or in the period of the revision and classified as loans and receivables. Loans and receivables are The NDA enters into derivative financial instruments to The basis of determining the cost of each performance future periods if the revision affects both current and future measured at amortised cost using the effective interest rate manage its exposure to commodity price risk and foreign obligation requires significant judgement on future cost periods. method, less any impairment. Interest income is recognised exchange rate risk, including commodity contracts and forecasts. These are derived from and consistent with the by applying the effective interest rate, except for short- forward foreign exchange contracts. cost estimates used to determine the Authority’s nuclear Critical judgements in applying the NDA’s term receivables when the recognition of interest would be provision and subject to the same estimation uncertainties accounting policies immaterial. Other investments are measured at fair value Derivatives are initially recognised at fair value on the described below. Specifically in respect of the costs of The following are the critical judgements, apart from those through profit or loss. date on which the derivative contract is entered into and fulfilling the performance obligations in the applicable involving estimations (which are dealt with separately are subsequently re-measured to their fair value at each contracts, the estimates rely on: below), that management has made in the process of The effective interest rate method is a method of calculating reporting date. The resulting gain or loss is recognised applying the NDA’s accounting policies and that have the the amortised cost of a financial asset and of allocating in the Statement of Comprehenisve Net Expenditure • Judgements of the continued operation of certain most significant effect on the amounts recognised in the interest income over the relevant period. The effective immediately. plants and services, the conclusion of certain works financial statements. interest rate is the rate that exactly discounts estimated programmes, and other assumed milestones future cash receipts through the expected life of the A derivative is presented as a non-current asset or a non- • Judgements of the appropriate allocation of costs to 3.1 Income recognition financial asset or, where appropriate, a shorter period, to current liability if the remaining maturity of the instrument individual performance obligations based on estimates The Authority applied IFRS 15 on 1 April 2018, and in the net carrying value of the financial asset. is more than 12 months and it is not expected to be realised of the extent of capacity, utilisation of other measure of doing so was required to perform a number of significant or settled within 12 months. Other derivatives are presented service provision as they apply to each contract and the accounting judgements. These judgements, the methods Impairment of financial assets as current assets or current liabilities. performance obligations therein employed in determining them, and the associated Financial assets are assessed for indicators of impairment uncertainties are described below. The judgements have at each reporting date. Financial assets are impaired where Embedded derivatives In accordance with the requirements of IFRS 15 the above been made on a prospective basis from the application date there is objective evidence that, as a result of one or more Derivatives embedded in other financial instruments or determinations were made for existing contracts at the onwards, in accordance with the Authority’s derogation events that occurred after the initial recognition of the other host contracts are treated as separate derivatives point of application of the standard and will not be revised from HM Treasury to set aside the retrospective restatement financial asset, the estimated future cash flows of the asset when their risks and characteristics are not closely related to for future reporting periods. Determinations will be made requirements of the standard. have been impacted. those of the host contracts and the host contracts are not for new contracts at the point of inception measured at fair value through profit or loss. 3.1 (a) The expected value of each of the contracts The carrying amount of the financial asset is reduced by 3.1 (c) The timing of satisfaction of performance with customers (the transaction price) the impairment loss directly for all financial assets with 2.9 Provisions The Authority has determined the transaction price of obligations the exception of trade receivables, where the carrying Provisions are recognised when the Group has a present The Authority has determined that performance obligations each contract on a prospective basis at 1 April 2018 (being amount is reduced through the use of an expected credit obligation as a result of a past event, and it is probable will be satisfied in accordance with contractually defined the total expected price of the contract less the revenue loss provision. When a trade receivable is considered that the Group will be required to settle that obligation. timescales, and in accordance with strategic assumptions recognised in prior periods). The transaction price of each uncollectible, it is written off against the expected credit loss Provisions are the Authority’s best estimate of the implicit in the site lifetime plans. Examples of the assumed contract comprises the total payments made on account provision. expenditure required to settle the obligation at the timing of satisfaction of performance obligations include and the total of future cash flows from the customer. In reporting date, and are discounted to present value where that the Authority: determining the latter, the Authority has determined that If, in a subsequent period, the amount of the impairment the effect is material. future cash flows will not be subject to significant variation loss decreases and the decrease can be related objectively • Satisfied its performance obligations in respect of the from existing contractual terms. This is on the basis that the to an event occurring after the impairment was recognised, receipt of spent fuel intended for reprocessing, and the 2.10 Grants from parent department Authority does not currently anticipate significant discounts, the previously recognised impairment loss is reversed In accordance with the FReM the NDA prepares its financial reprocessing thereof, upon cessation of reprocessing returns, refunds or other types of variable consideration through the Statement of Comprehensive Net Expenditure statements showing grants received from BEIS as credited operations at the THORP plant at Sellafield and to apply to the contracts other than the indexation of cash to the extent that the carrying amount of the financial to the general reserve, and as financing in the statement of effective closure of the plant in the reporting period flows as set out in contracts as applicable. Where such asset at the date the impairment is reversed does not cash flows. Grants are received gross from BEIS and receipts of 2018-19, and therefore that the transaction price indexation arises in future reporting periods, an adjustment exceed what the amortised cost would have been had the are surrendered separately. allocated to these performance obligations was to the contract price will be applied in that period. impairment not been recognised. recognised in full in 2018-19

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Notes to the financial statements - continued Notes to the financial statements - continued

• Will continue to store spent fuels, waste, products The balances are deemed financial assets under IAS37 and 3.3 (b) Nuclear Provisions wastes held in them, resulting in potential significant and other materials in line with the respective storage offset against costs provided in the nuclear provision in note The nuclear provision represents the best estimate of the uncertainty in both the process and costs of dealing periods contained in each contract, that the associated 24. costs of delivering the NDA objective of decommissioning with these materials performance obligation will be satisfied over time, and the plant and equipment on each of the designated nuclear • Uncertainty over future Government policy positions therefore that the transaction price allocated to these In addition to the above, costs incurred in the acquisition licensed sites and returning the sites to pre-agreed end and potential regulatory changes performance obligations will be recognised as revenue of property, plant and equipment required to fulfil the states in accordance with the published strategy. This • Possible technological advances which may occur evenly over the respective time periods contracts are capitalised, depreciated and otherwise valued, programme of work will take until 2137. The estimates are which could impact the work to be undertaken to • Will continue to provide services for the interim storage in accordance with the Authority’s accounting policies and necessarily based on assumptions of the processes and decommission and clean up the sites of wastes produced by spent fuel reprocessing and stated in total in note 11. methods likely to be used to discharge the obligations, the subsequent treatment of said wastes, concluding reflecting a combination of the latest technical knowledge Government has indicated that the preferred policy for in 2025, that these performance obligations will be Further information on the application of IFRS15 is available, the requirements of the existing regulatory management of plutonium is for reuse. Any final decision satisfied evenly over time, and therefore that the contained in Note 9. regime, Government policy and commercial agreements. is conditional on business case approval for reuse of transaction price allocated to these performance Given the very long timescale involved, and the complexity the material. Following review of the likely costs of the obligations will be recognised as revenue evenly over 3.2 Leases of the plants and material being handled, considerable preferred policy, and the credible alternative of storage and the period to 2025. This judgement assumes and relies The Authority applied IFRS 16 Leases for the first time in the uncertainty remains in the cost estimate particularly in the disposal in the long-term, a prudent estimate of £7 billion upon the continued availability and performance of previous year which has had a material impact on the assets later years. (discounted) has been included within the Provision. waste treatment plants at Sellafield and a significant and liabilities held on the balance sheet. The following disruption in plant operations and/or change in accounting judgements have been made. In preparing the estimate of the cost of decommissioning duration of the remaining waste treatment programme the designated sites, the NDA has focused in particular on would require the Authority to review and potentially Determining whether a lease exists the first 20 years, which represents £60 billion out of the amend its assumptions on the timing of the satisfaction Management have exercised judgement when reviewing total £135 billion provision (2020: £56 billion out of £135 of this performance obligation. For example a agreements to determine whether or not a lease exists. billion). In undiscounted terms it represents £57 billion significant unplanned temporary halt to operations Management have considered whether an agreement, in out of a total of £132 billion (2020: £56 billion out of £132 in a future reporting period may reduce the revenue substance, grants the Authority the right to direct the use of billion). recognised in that period the asset and allows the Authority to receive substantially all • Will continue to receive spent fuel which is not of the economic benefit of the asset. As part of the preparation of the financial statements, the intended for reprocessing, and in doing so will assume principal assumptions and sensitivities for the cost estimates title of ownership for said fuel at the point in time Determining the lease term of contracts with renewal have again been updated and reviewed by the NDA when it is received by the Authority, therefore that the and termination options executive and, where appropriate, updates to the estimates transaction price of the contract will be allocated to The Authority determines the lease term as the non- have been made to reflect changed circumstances and a single performance obligation, and therefore that cancellable term of the lease, together with any periods more recent knowledge. the transaction price will be recognised as revenue covered by an option to extend the lease, or any periods in proportion to the volume of spent fuel received covered by an option to terminate the lease. When the In preparing the best estimate of the provision required and taken into ownership in each reporting period, Authority has the option to extend or terminate a lease, to settle the NDA obligations, it is recognised that there relative to the total volume of spent fuel expected to be management uses its judgement to determine whether or remains a significant degree of inherent uncertainty in received and taken into ownership for the remainder of not an option would be reasonably certain to be exercised. the future cost estimates. Should outcomes differ from the duration of the contract Management considers all facts and circumstances assumptions in any of the following areas, this may require including their past practice. a material adjustment to the carrying amount of the nuclear 3.1 (d) The costs to fulfil contracts with customers provision and related assets and liabilities: The Authority has determined the remaining costs of 3.3 Key Sources of Estimation Uncertainty fulfilling each contract, prospectively at the point of The key assumptions concerning the future, and other key • Potential changes in the NDA funding profile, requiring application, comprising the following and has applied sources of estimation uncertainty at the reporting date, that the tailoring of expenditure across the estate to ensure judgements as described: have a significant risk of causing a material adjustment to the right balance between addressing high risk, hazard the carrying amounts of assets and liabilities within the next and affordability; for example emanating from either • Costs incurred prior to contract inception have been financial year, are discussed below. economic conditions or changes in funding resulting estimated in previous reporting periods, and amortised from the next Government Spending Review in proportion to the revenue recognised in each 3.3 (a) Impairment of property, plant and equipment • The length of time over which the necessary reporting period, relative to the total revenue still to be Impairment is measured by comparing the carrying value programme of work will be delivered – stretching out recognised. The respective balances for each contract of the asset or cash-generating unit with its recoverable to 2137 are defined as ‘contract assets’ under IFRS15 and are amount. The NDA has therefore reviewed the asset base • Interdependencies between programmes of work both disclosed at note 13. and all assets are reviewed for evidence of impairment. within SLCs and across SLC boundaries. • Costs expected to be incurred in fulfilling the remaining Given the ageing asset base this calculation has a degree of • Uncertainty over the future location of the planned performance obligations for each contract are uncertainty within it. The carrying amount of property, plant Geological Disposal Facility (GDF) and the timing of its estimated as described above, are stated at note 13 and and equipment at the reporting date was £636 million. availability will be expensed in each reporting period as they arise. • A lack of detailed information on the design of the Legacy Ponds and Silos at Sellafield and the exact quantities and chemical composition of the historical

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Notes to the financial statements - continued Notes to the financial statements - continued

4. Operating segments 4. Operating segments (continued)

For management purposes, the NDA is currently organised into various operating units, which are grouped according to activity type. The segmental analysis in the following tables presents the net expenditure for each of the continuing operations. Magnox electricity Magnox Sellafield generation Springfields NDA admin Subsidiaries electricity reprocessing and research Dounreay site Waste and and other and Group Total Sellafield generation Springfields NDA admin Subsidiaries and transport sites restoration management Capenhurst non-programme adjustments 2020 reprocessing and research Dounreay site Waste and and other and Group Total NDA Group 2020 £m £m £m £m £m £m £m £m and transport sites restoration management Capenhurst non-programme adjustments 2021 Authority administration NDA Group 2021 £m £m £m £m £m £m £m £m expenditure - - - - - 53 - 53 Authority administration expenditure - - - - - 61 - 61 Programme expenditure 2,352 465 189 122 46 132 45 3,351

Programme expenditure 2,310 400 168 129 46 141 36 3,230 Decommissioning costs charged to nuclear provision (1,761) (474) (180) (77) (103) - - (2,595) Decommissioning costs charged Decommissioning costs charged to nuclear provision (1,876) (475) (183) (90) (114) - 1 (2,737) to other provisions (132) ------(132) Decommissioning costs charged Nuclear provision increase/(decrease) 1,620 5,032 92 (88) 6 - 731 7,393 to other provisions (79) - - - - - (1) (80) Other provisions increase/(decrease) 157 - - - - - 10 167 Nuclear provision increase/(decrease) 2,709 580 94 236 104 - (427) 3,296 Adjustments to provisions (116) 4,558 (88) (165) (97) - 741 4,833 Other provisions increase/(decrease) (120) - - - - - 15 (105) 634 105 (89) 146 (10) - (412) Adjustments to provisions 374 Depreciation and impairment 4 4 - - - - 5 38 87 Income (a) (691) (3) (2) (3) - (21) (20) (740) Depreciation and impairment 1 3 - - - - (5) 51 77 Interest payable ------36 36 Income (a) (547) (4) (2) (2) - (9) (63) (627) Interest receivable ------(2) (2) Interest payable ------13 13 Interest receivable (b) - - - - - (1) (59) (60) Net expenditure/(income) from continuing operations for the Net expenditure/(income) from year before taxation 1,589 5,020 99 (46) (51) 169 838 7,618 continuing operations for the year before taxation 2,428 501 77 273 36 187 (434) 3,068

(a) See note 9 for commentary on revenue from contracts. Income in ‘subsidiaries and group adjustments’ includes revenue Geographical information from rail and marine transport services and property rental. The NDA Group’s income is attributed to countries on the basis of the customer’s location, as follows: (b) Includes net gain on investments of £58 million held by Rutherford Indemnity Ltd. 2021 2020 £m The basis for accounting for transactions between reportable segments is given in Note 29. NDA Group £m United Kingdom 476 508 Germany 39 9 There have been no changes from the prior period to the measurement methods used to determine reported segment net Japan 99 213 expenditure. Italy 8 7 Other countries 5 3 Total income 627 740

The Group’s non-current assets are primarily located or based in the United Kingdom.

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Notes to the financial statements - continued Notes to the financial statements - continued

5. Authority administration expenditure 7. Adjustments to provisions

2021 2020 NDA Group Authority Authority £m £m 2021 2020 2021 2020 Staff costs (see Remuneration Report) 44 39 NDA Group & Authority £m £m £m £m Administration costs 17 14 Movement in nuclear provisions: Auditors’ remuneration - - Provided for in the year (see note 24) 3,729 6,792 3,729 6,791 Total Authority administration expenditure 61 53 In-year group provision adjustment (see note 24) (426) 730 - - Unwind of discount (see note 24) (7) (129) (7) (129) Directors’ emoluments are included in the above figures and can be seen in the Remuneration Report on pages 86 to 91. Release of provision (see note 24) (2,737) (2,595) (2,737) (2,595) Total movement in nuclear provisions 559 4,798 985 4,067 Auditors’ remuneration represents fees payable to the NAO for the audit of the Authority and the NDA Group and amounted to £380,000 (2020: £330,000). No other remuneration has been paid to the NAO. Movement in other provisions: Provided for in the year (see note 25) (100) 170 (114) 160 Release from provision (see note 25) (80) (132) (79) (132) Unwind of discount (see note 25) (5) (3) (6) (3) 6. Programme expenditure Total movement in other provisions (185) 35 (199) 25 Contractor costs are defined as payments to contractors relating to the core NDA programme (work performed on behalf of the NDA by contractors) adjusted to eliminate payments made between those contractors. Contractor costs are recognised as Total provisions movement 374 4,833 786 4,092 an expense under programme expenditure within the Statement of Comprehensive Net Expenditure, in the period to which they relate.

NDA Group Authority 2021 2020 2021 2020 NDA Group & Authority £m £m £m £m 8. Depreciation and impairments Contractor and subsidiary costs (a), (b) 2,933 2,999 2,889 2,945 Amortisation of recoverable contract costs (see note 13) 102 101 102 1 10 NDA Group Authority Revalorisation of advance payments (see note 22) 61 126 61 6 12 2021 2020 2021 2020 Fees payable to SLCs 17 40 17 40 NDA Group & Authority £m £m £m £m Trading costs 3 19 3 19 Depreciation of property, plant and equipment (see note 11) 82 73 31 35 Research and development costs 10 12 - 6 Impairment of property, plant and equipment (see note 11) - 9 - 9 Insurance 5 - 13 8 Impairment of financial instruments for expected credit loss (see notes 19 and 20) (5) 5 (5) 5 Skills and socio-economic 5 - 5 - Total depreciation and impairments 77 87 26 49 Dividend payable to minority interest 1 1 - - Information governance 17 13 17 13 Cyber security 9 9 10 9 Plutonium management strategy 7 14 7 14 Movements in inventory provisions (c) 57 8 57 8 Group development projects 7 4 7 4 Property management 6 5 6 6 NTS contract management 5 - 5 - R&D tax credit relief (15) - (15) - Other costs - - 10 7 Total Programme expenditure 3,230 3,351 3,194 3,306

(a) Contractor and subsidiary costs shown are after deduction for capitalisation of £5 million (2020: £5 million) (b) Contractor and subsidiary costs include auditors’ remuneration payable for the audit of the NDA subsidiary companies amounting to £336,000 (2020: £298,000) (c) As a result of a review of the application of the accounting policies for the valuation of inventories within the Authority accounts a one off provisioning charge of £45 million was made in the period (see note 15)

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Notes to the financial statements - continued Notes to the financial statements - continued

9. Income 9. Income (continued) NDA Group Authority Contracts charged to the accounts (amortised) in proportion to 2021 2020 2021 2020 Income recognition revenue recognised in each reporting period NDA Group & Authority £m £m £m £m • An estimate of the future costs which will be incurred Contract income is recognised by reference to the stage Spent fuel reprocessing and associated waste management (187) (183) (187) (183) in fulfilling the performance obligations under each of completion of the contract activity at the reporting Spent fuel receipt (211) (215) (211) (215) contract which are accounted for under IAS37 and date. Prior to the implementation of IFRS 15 the Authority’s Other contracts for waste and product storage (15) (67) (15) (67) constitute a subset of the costs included in the nuclear accounting policy for most spent fuel reprocessing and/or Storage and destorage of residues (8) (5) (8) (5) provision (and are presented as equal and opposite waste management contracts was to measure the stage of Waste substitution (destorage and return of substituted waste) (22) - (22) - asset balances) completion according to the proportion that contract costs Revenue from major contracts (continuing) (443) (470) (443) (470) incurred for work performed to date bear to the estimated Note 22 to the financial statements provides information total contract costs. Legacy waste management (6) (6) (6) (6) on payments on account, which are payments made by Transfer of ownership of nuclear materials (43) (166) (43) (166) customers under long term contracts, in advance of the In accordance with IFRS 15 the Authority has: fulfilment of performance obligations. These balances are Revenue from major contracts (non-recurring) (49) (172) (49) (172) • Identified contracts with customers and the contract contract liabilities under IFRS15. price still to be recognised at the reporting date Transportation of nuclear fuel, waste and materials (109) (61) (48) (42) (in accordance with the derogation that allows The Authority will allocate any changes in the transaction Energy trading (5) (6) (5) (6) the Authority to set aside the requirement to price of each contract (including but not limited to the Sundry (14) (15) (12) (18) retrospectively restate revenues) under each contract future revalorisation of payments on account balances) Admin/non-programme (5) (10) (5) (10) • Determined the performance obligations under each to the performance obligations as defined in the initial contract Revenue from other contracts (133) (92) (70) (76) allocation of the transaction price to performance • Determined the relative value of each performance obligations at 1 April 2018, and in proportion to the obligation Revenue from contracts with customers (625) (734) (562) (718) allocations made at that time. Where this results in • Identified the appropriate basis for measuring the allocation of changes in transaction price to performance fulfilment of each performance obligation and therefore Other revenues (rental income) (2) (6) (2) (2) obligations already satisfied at the respective reporting the recognition of revenue arising from each Total revenues (627) (740) (564) (720) date, the resulting allocation to satisfied performance obligations will be recognised as revenue in that reporting Note 3 to the financial statements provides information period. on significant judgements performed by the Authority in The total revenue from contracts with customers totalled £625 million (2020: £734 million) of which: applying IFRS 15, as required in order to determine: Variations in contract work are included to the extent that • The expected value of each of the contracts with they have been agreed with the customer. • £443 million (2020: £470 million) was recognised on major contracts which will continue beyond the reporting date customers (the transaction price) • £49 million (2020: £172 million) was recognised on non-recurring major contracts which concluded during the reporting period • The amounts of the transaction price of each contract Treatment of costs • £133 million (2020: £92 million) was recognised on other contracts to be allocated to each of the performance obligations Contract costs are recognised as expenses in the period in in the contract which they are incurred. • The timing of satisfaction of performance obligations When it is probable that total contract costs will exceed total contract income, the expected loss is recognised as an The table on page 135 provides the following information: expense immediately, being an adjustment to the contract • The extent of revenue recognised from contracts loss provision in notes 7 and 24. with customers • Disaggregation of said revenue into categories that For contracts in progress at the reporting date, where costs depict how the nature, timing and uncertainty of cash still to be incurred exceed amounts received to date, the flows are affected by economic factors balance is shown under non-current assets as recoverable • The aggregate amount of the transaction price contract costs. Where amounts received to date exceed allocated to the performance obligations that are costs still to be incurred the balance is shown under trade wholly or partially unsatisfied and other payables as payments received on account. • Explanation of when the Authority expects to recognise the above transaction price as revenue

Note 13 to the financial statements provides information on recoverable contract costs, which comprise two elements:

• Historic costs incurred prior to the recognition of revenue on each relevant contract, which constitute financial assets for the purposes of IFRS15 and are

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Notes to the financial statements - continued Notes to the financial statements - continued

9. Income (continued) 9. Income (continued)

The Authority’s major contracts with customers, the main performance obligations remaining on each contract and the The key uncertainty in the Authority’s revenue forecasts is the volume and timing of spent fuel which is received and not intend- factors affecting future cash flows and timing of revenue recognition can be summarised as follows: ed for reprocessing. There is uncertainty in the overall value of the contract because it is directly related to the volume of spent fuel produced by the customer. There is uncertainty in the timing of revenue recognition in each reporting period because revenue is recognised at the point of receipt of spent fuel, therefore the revenue recognised in each reporting period is directly related to the volume of fuel received in that reporting period. The volume of fuel received is subject to a number of uncertain Contract type and customer(s) Main categories of Factors potentially affecting future cash flows external factors which are not entirely within the control of the Authority. performance obligation and revenue recognition The table shows the main types of contract, the main areas of performance obligations therein, and for each category: Spent fuel reprocessing and associated Storage of spent fuel not Overall contract value is materially certain, and waste management reprocessed (to 2086) timing of recognition is certain (corresponds • The revenue recognised in the reporting period [A] Customer(s): directly to contracted storage period) • The revenue expected to be recognised in future reporting periods (being the aggregate amount allocated to performance Nuclear energy producers in the UK and Interim storage of wastes Overall contract value is materially certain. Revenue obligations that are wholly or partially unsatisfied at the reporting date) [B] overseas (expected to continue to 2025) is recognised over time, and period of recognition • An indication of when the Authority expects to recognise the remaining contract price is dependent on future performance of waste management plants

Storage of treated wastes (to Overall contract value is materially certain. Contract type Categories of [A] [B] Of which £m: 2038 or 2086 depending on Revenue is recognised over time, and period of performance obligation £m £m type of material) recognition is dependent on future performance of waste management plants 2021-2026 2027- 2039 2040-2087 Storage of products (to 2086) Overall contract value is materially certain, and timing of recognition is certain (corresponds Spent fuel reprocessing and Spent fuel storage 13 708 54 139 515 directly to contracted storage period) associated waste management Spent fuel receipt and management Receipt of spent fuel, currently Overall contract value dependent on volume of Interim storage of wastes 86 340 340 - - Customer(s): expected to continue until 2034 spent fuel produced by customer Treatment of wastes 64 254 254 - - Nuclear energy producers in the UK Timing of revenue recognition dependent on ability of customer to consign spent fuel and on ability of Storage of treated wastes 5 170 19 51 100 Authority to receive spent fuel Storage of products 19 834 85 222 527 Other contracts for waste and product Storage of materials, last Overall contract value dependent on future price Spent fuel receipts Receipt of spent fuel 211 3,729 1,937 1,792 - storage contract continuing to 2042 negotiations with customers, occurring at intervals Other storage contracts Storage of materials 15 1,051 281 605 165 Customer(s): (of 1 to 5 years) determined in individual contracts Nuclear operators in the UK, nuclear Storage and destorage of residues Storage 6 12 12 - - energy producers overseas Destorage 2 18 18 - - Storage and destorage of residues Storage of residues, currently Contract values may vary according to storage Waste substitution Destorage 22 51 51 - - Customer(s): expected to continue until 2025 periods required by customers Nuclear energy producers overseas Legacy waste Waste management 6 156 156 - - Subsequent destorage of Contract values may vary according to storage residues, currently expected to periods required by customer Transfer of ownership of materials Transfer of ownership 43 - - - - continue until 2023 and flasks Timing of revenue recognition dependent on ability TOTAL 492 7,323 3,207 2,809 1,307 of Authority to destore residues and on ability of customer to receive residues Waste substitution Destorage and transportation Contract value is materially certain. Timing of Customer(s): of waste revenue recognition dependent on ability of Nuclear energy producers overseas Authority to destore wastes and on ability of customer to receive wastes Transportation of nuclear fuel, waste and Transportation of nuclear fuel, Availability of transportation capacity and customer materials waste and materials ability and readiness to receive nuclear fuel, waste and materials; customer demand for transportation services Energy trading Production of electricity and Performance of electricity producing plants sales of gas Sundry Various including provision of Continued demand for services rechargeable services to third parties Admin/non programme Various Continued demand for services

134 135 NDA Annual Report and Accounts 2020/21 NDA Annual Report and Accounts 2020/21

Notes to the financial statements - continued Notes to the financial statements - continued

11. Property, plant and equipment

10. Tax Property, plant and equipment includes assets purchased Where economic facilities have been commissioned, directly by the Group and assets for which the legal the estimated cost of decommissioning the facilities 2021 2020 title transferred to the Group under Transfer Scheme is recognised, to the extent that it is recognised as a NDA Group & Authority £m £m arrangements pursuant to the Energy Act 2004. Assets provision under IAS 37 ‘Provisions, Contingent Liabilities NDA Group net expenditure before tax 3,068 7,618 on designated nuclear sites are only recognised where and Contingent Assets’, as part of the carrying value two criteria are met. Firstly the economic element of the of the asset and depreciated over the useful life of the Deficit on ordinary activities before tax at the UK standard rate of asset’s value at the reporting date must exceed £100,000, asset. All other decommissioning costs are expensed as corporation tax of 19% (2020: 19%) 583 1,447 incurred. Effects of: and secondly the proportion of the asset relating to Income and expenditure which is not taxable or tax deductible (323) (1,295) commercial activity should exceed 10%. Capital allowances for the year in excess of depreciation 117 122 Depreciation is charged so as to write off the cost or Unutilised losses (377) (274) In line with the accounts direction issued by the valuation of assets, other than assets under construction, Current tax charge for the year - - Secretary of State for Energy and Climate Change, to their residual values over their useful lives, using the Controlled foreign company tax 2 - waste management assets are excluded from the FReM straight-line method, on the following bases: Deferred tax release - - requirement to carry PPE at fair value due to lack of Total tax charge/(credit) 2 - reliable and cost effective revaluation methodology. Land Not depreciated Such waste management assets are therefore carried at Buildings 10 to 60 years The NDA does not pay tax on any profits arising from its activities in relation to decommissioning, and similarly losses are not cost less accumulated depreciation and any impairment IT equipment 3 years deductible in relation to decommissioning. Subsidiaries do not pay tax on profits arising as these are offset against the taxable charges. Fixtures and fittings 3 to 10 years losses of the NDA. Plant and equipment 10 to 30 years For property, plant and equipment carried at valuation, Transport equipment 4 to 14 years A deferred tax asset has not been recognised in respect of any non-decommissioning losses incurred by the NDA as the NDA revaluations are currently performed on an annual basis does not anticipate taxable surpluses arising in the foreseeable future (note 14). to ensure that the carrying amount does not differ The exceptions to the above are: The NDA is liable for Controlled Foreign Company Tax on the activities of Rutherford Indemnity Ltd, the NDA’s materially from that which would be determined using wholly-owned captive insurance company based in Guernsey. fair values at the reporting date. This includes assets • In the depreciation of certain shipping assets which used to support commercial activities, property located is calculated on a usage, rather than straight-line, outside nuclear licensed site boundaries, and property basis; and located inside nuclear licensed site boundaries where • In the depreciation of plant and equipment for which a reliable and cost effective revaluation methodology the remaining useful commercial life of the assets is exists. The categories of property, plant and equipment less than 10 years (such assets are depreciated over subject to revaluation are land and buildings. the remaining useful commercial life)

Any accumulated depreciation at the date of revaluation Assets under construction are not depreciated until is eliminated and the resulting net amount restated to brought in to use. equal the revalued amount. Any revaluation increase arising is credited to the revaluation reserve, except to Residual values and useful lives are reviewed, and the extent that it reverses a revaluation decrease for adjusted if appropriate, at each reporting date. the same asset previously recognised as an expense, in which case the increase is credited to profit or loss to the extent of the decrease previously charged. A decrease in carrying amount arising on revaluation is charged as an expense to the extent that it exceeds the balance, if any, held in the revaluation reserve relating to a previous revaluation of that asset.

On the subsequent de-recognition of a revalued asset, the attributable revaluation surplus remaining in the revaluation reserve is transferred directly to the general reserve.

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Notes to the financial statements - continued Notes to the financial statements - continued

11. Property, plant and equipment (continued) 11. Property, plant and equipment (continued)

Fixtures & Plant & Transport Assets under Right of Use Fixtures & Plant & Transport Assets under Right of Use Land Buildings fittings equipment equipment construction assets (a) Total Land Buildings fittings equipment equipment construction assets (a) Total NDA Group 2021 £m £m £m £m £m £m £m £m Authority 2021 £m £m £m £m £m £m £m £m Cost or valuation Cost or valuation At 1 April 2020 15 346 5 4,451 71 26 93 5,007 At 1 April 2020 11 293 3 4,162 4 26 1 4,500 Revaluations (c) - 6 - - - - - 6 Revaluations (c) ------Eliminations - - - (18) - - - (18) Eliminations - - - (18) - - - (18) Additions (e) - - - 8 - 9 58 75 Additions - - - - - 5 - 5 Other reclassifications - 2 - 1 3 (6) - - Other reclassifications ------Disposals - (1) - - (4) - (4) (9) Disposals ------(1) (1) Impairments (f) ------Impairments (f) ------At 31 March 2021 15 353 5 4,442 70 29 147 5,061 At 31 March 2021 11 293 3 4,144 4 31 - 4,486

Depreciation Depreciation At 1 April 2020 - (229) (4) (4,074) (38) 4 (25) (4,366) At 1 April 2020 - (228) (3) (3,926) (2) - - (4,159) Eliminations - - - 18 - - - 18 Eliminations - - - 18 - - - 18 Charged in year - (1) - (44) (4) - (33) (82) Charged in year - (1) - (30) - - - (31) Disposals - – - - 3 - 2 5 Disposals ------1 1 At 31 March 2021 - (230) (4) (4,100) (39) 4 (56) (4,425) At 31 March 2021 - (229) (3) (3,938) (2) - 1 (4,171)

Net book value at 1 April 2020 15 117 1 377 33 30 68 641 Net book value at 1 April 2020 11 65 - 236 2 26 1 341 Net book value at 31 March 2021 15 123 1 342 31 33 91 636 Net book value at 31 March 2021 11 64 - 206 2 31 1 315

The net book value of plant and equipment at 31 March 2021 (£342 million) includes £124 million relating to future decommissioning The net book value of plant and equipment at 31 March 2021 (£206 million) includes £99 million relating to future

costs. Plant and Equipment additions includes: £5 million of capitalised decommissioning costs which are off-set via release from the decommissioning costs Nuclear Provision Fixtures & Plant & Transport Assets under Right of Use Fixtures & Plant & Transport Assets under Right of Use Land Buildings fittings equipment equipment construction assets (a) Total Land Buildings fittings equipment equipment construction assets (a) Total Authority 2020 £m £m £m £m £m £m £m £m NDA Group 2020 £m £m £m £m £m £m £m £m Cost or valuation Cost or valuation At 1 April 2019 11 253 3 4,176 4 74 3 4,524 At 1 April 2019 15 297 5 4,520 71 76 80 5,064 Revaluations (c) ------Revaluations (c) - 1 - - - - - 1 Eliminations - (2) - (15) - - - (17) Eliminations - (2) - (15) - - - (17) Additions - - - - - 4 - 4 Additions - 8 - - - 9 15 32 Other reclassifications - 42 - 1 - (43) - - Other reclassifications - 43 - (37) 1 (46) - (39) Disposals ------(2) (2) Disposals - (1) - (17) (1) (4) (2) (25) Impairments (f) - - - - - (9) - (9) Impairments (f) - - - - - (9) - (9) At 31 March 2020 11 293 3 4,162 4 26 1 4,500 At 31 March 2020 15 346 5 4,451 71 26 93 5,007 Depreciation Depreciation At 1 April 2019 - (229) (3) (3,907) (2) - - (4,141) At 1 April 2019 - (230) (4) (4,065) (33) - - (4,332) Eliminations - 2 - 15 - - - 17 Eliminations - 2 - 15 - - - 17 Charged in year - (1) - (34) - - - (35) Charged in year - (1) - (42) (5) - (25) (73) Disposals ------Disposals - - - 18 - 4 - 22 At 31 March 2020 - (228) (3) (3,926) (2) - - (4,159) At 31 March 2020 - (229) (4) (4,074) (38) 4 (25) (4,366) Net book value at 31 March 2019 11 24 - 269 2 74 - 380 Net book value at 31 March 2019 15 67 1 455 38 76 - 652 Recognition of right of use asset under Recognition of right of use asset under IFRS 16 ------3 3 IFRS 16 ------80 80 Net book value at 1 April 2019 11 24 - 269 2 74 3 383 Net book value at 1 April 2019 15 67 1 455 38 76 80 732 Net book value at 31 March 2020 11 65 - 236 2 26 1 341

Net book value at 31 March 2020 15 117 1 377 33 30 68 641 The net book value of plant and equipment at 31 March 2020 (£236 million) includes £106 million relating to future The net book value of plant and equipment at 31 March 2020 (£377 million) includes £127 million relating to future decommissioning costs. decommissioning costs. Right of use assets were recognised for the first time under IFRS16 during 2019/20. Right of use assets were recognised for the first time under IFRS16 during 2019/20. Opening balances are stated in line with IFRS16 and therefore differ from the previous year’s closing balances. Opening balances are stated in line with IFRS16 and therefore differ from the previous year’s closing balances.

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Notes to the financial statements - continued Notes to the financial statements - continued

11. Property, plant and equipment (continued) 11. Property, plant and equipment (continued)

(a) Right of use assets included in property, plant and equipment comprise the following:

(a) Right of use assets included in property, plant and equipment comprise the following: Fixtures & Plant & Land Buildings fittings equipment Transport Total Authority 2021 £m £m £m £m £m £m Fixtures & Plant & Land Buildings fittings equipment Transport Total NDA Group 2021 £m £m £m £m £m £m Cost or valuation Balance at 1 April 2020 - 1 - - - 1 Cost or valuation Balance at 1 April 2020 - 12 - 11 70 93 Disposals - (1) - - - (1) Additions - 4 - 5 49 58 At 31 March 2021 ------Disposals - (4) - - - (4)

At 31 March 2021 - 12 - 16 119 147 Depreciation

At 1 April 2020 ------Depreciation Depreciation expense ------At 1 April 2020 - (2) - (3) (20) (25) Disposals ------Depreciation expense - (3) - (3) (27) (33) Disposals - 2 - - - 2 At 31 March 2021 ------

At 31 March 2021 - (3) - (6) (47) (56) Net book value at 31 March 2020 ------

Net book value at 31 March 2021 ------Net book value at 31 March 2020 - 10 - 8 50 68 Net book value at 31 March 2021 - 9 - 10 72 91 Fixtures & Plant & Land Buildings fittings equipment Transport Total Authority 2020 £m £m £m £m £m £m Cost or valuation Balance at 1 April 2019 - 3 - - - 3 Disposals - (2) - - - (2) Fixtures & Plant & At 31 March 2020 - 1 - - - 1 Land Buildings fittings equipment Transport Total NDA Group 2020 £m £m £m £m £m £m Cost or valuation Balance at 1 April 2019 - 13 - 11 56 80 Depreciation Additions - 2 - - 14 16 At 1 April 2019 ------Disposals - (3) - - - (3) Depreciation expense ------Disposals ------At 31 March 2020 - 12 - 11 70 93 At 31 March 2020 ------

Depreciation Net book value at 31 March 2019 - 3 - - - 3 At 1 April 2019 ------Net book value at 31 March 2020 - 1 - - - 1 Depreciation expense - (2) - (3) (20) (25) Disposals ------At 31 March 2020 - (2) - (3) (20) (25) (b) The NDA accounts for non-waste management assets on nuclear licensed sites, which have an ongoing value in use or realisable value, in accordance with IAS 16 and the requirements of FReM. Assets outside the nuclear licensed site Net book value at 31 March 2019 ------boundaries are revalued in accordance with FReM. The NDA continues to require SLCs to maintain inventories of all property, Net book value at 31 March 2020 - 10 - 8 50 68 plant and equipment held on nuclear licensed sites and which are subject to validation and audit as part of the contractual terms in place between the NDA and licence holders (c) Land and buildings located outside the nuclear licensed site boundaries, were revalued at 31 March 2021 on the basis of existing use value or market value, as appropriate, by external qualified valuers. The valuations were undertaken in accordance with the R oyal Institution of Chartered Surveyors Valuation Standards (6th Edition) by Avison Young Ltd Chartered Surveyors (d) Contracted capital commitments relating to those economic assets expected to be subsequently capitalised, were £5 million (2020: £4 million) (e) Changes in the estimated future cost of decommissioning related to commercial property, plant and equipment, are offset by matching changes in the value of the IAS 37 property, plant and equipment asset. An increase of £5 million was recognised in the year (2020: £39 million decrease), see note 24 (f) No impairment charges were made in the year on assets at the end of their commercial usage (2020: £9 million)

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Notes to the financial statements - continued Notes to the financial statements - continued

12. Investments in subsidiaries 13. Recoverable contract costs

Investments in subsidiaries are stated at cost less, where appropriate, provision for impairment. The NDA Authority and Group have commercial agreements in place under which some or all of the expenditure required to settle nuclear provisions will be recovered from third parties. 2021 2020 Authority £m £m Recoverable contract costs comprise costs which were incurred before the revenue recognition period of each contract and which Cost are amortised each year in line with revenue (‘Historic costs’ below) and costs which form part of the nuclear provision, which are At 1 April 259 259 restated each year for unwinding of discount and other changes in estimate, and released as they occur in each year (‘Future costs’ Additions - - below). At 31 March 259 259

Impairment 2021 2020 At 1 April – – NDA Group and Authority £m £m Reversal – – Recoverable contract costs relating to nuclear provisions: At 31 March – – Gross recoverable contract costs 4,895 5,087 Less applicable payments received on account (3,246) (3,304) Net book value at 1 April 259 259 Less associated contract loss provisions (202) (358) Net book value at 31 March 259 259 Total recoverable contract costs 1,447 1,425

Details of the Authority’s subsidiaries at 31 March 2021 are as follows: The movements in the gross recoverable contract costs during the year are detailed in the table below: Proportion of ordinary shares 2021 2020 Country of Nature of held by NDA Historic costs Future costs Total costs Historic costs Future costs Total costs Name incorporation business % NDA Group and Authority £m £m £m £m £m £m Direct Rail Services Ltd UK Rail transport services within the UK 100 Balance as at 1 April 1,516 3,571 5,087 1,617 3,429 5,046 International Nuclear Services France SAS (i) France Transportation of spent fuel 100 Increase in year (see note 24) – 117 117 – 334 334 International Nuclear Services Japan KK (i) Japan Transportation of spent fuel 100 Unwind of discount (see note 24) – (8) (8) – (7) (7) International Nuclear Services Ltd (INS Ltd) UK Contract management and the transportation Amortisation (see note 6) (102) - (102) (101) – (101) of spent fuel, reprocessing products and waste 100 Release in year (see note 24) – (199) (199) – (185) (185) NDA Properties Ltd UK Property management 100 Balance as at 31 March 1,414 3,481 4,895 1,516 3,571 5,087 Pacific Nuclear Transport Ltd (i) UK Transportation of spent fuel, reprocessing products and waste 72 The historic costs within the above are deemed contract assets under IFRS 15. Rutherford Indemnity Ltd Guernsey Nuclear insurance 100 Radioactive Waste Management Ltd UK Development of Geological Disposal Facility 100 NDA Archives Ltd UK Operation of Nucleus – The Nuclear and Caithness The opening balances, amortisation in period and closing balances for each main contract type are: Archive 100 Sellafield Ltd UK Operation of nuclear licensed sites 100 NDA Group and Spent fuel Spent fuel 2021 Spent fuel Spent fuel 2020 Magnox Ltd UK Operation of nuclear licensed sites 100 Authority reprocessing and receipt and Total reprocessing and receipt and Total associated waste management £m associated waste management £m management £m management £m £m £m (i) Ownership through INS Ltd. Balance as at 1 April 955 561 1,516 1,026 591 1,617 The results of all of the above subsidiaries are included within these consolidated financial statements. Amortisation (72) (30) (102) (71) (30) (101)

Balance as at 31 March 883 531 1,414 955 561 1,516 The NDA is a member of Energus, a company limited by guarantee registered in the UK, providing training facilities in support of

the nuclear estate. The NDA’s liability is limited to £10.

The NDA is a member of North Highland Regeneration Fund Ltd, a company limited by guarantee registered in Scotland and contributing to socio-economic development in the North Highland region. The NDA’s liability is limited to £100. Contract assets under IFRS15 are deemed financial instruments for the purposes of IFRS9 and therefore are ordinarily required to be reviewed for expected credit loss impairment. The above contract asset balances comprise costs which have been previously incurred and are now being amortised in each reporting period. They are not related to or dependent on the future payments still The NDA is a member of Energy Coast West Cumbria Ltd, a company limited by guarantee registered in the UK and contributing to be made under each contract and therefore a credit loss impairment is not required. to the economic regeneration of West Cumbria. NDA’s liability is limited to £1.

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Notes to the financial statements - continued Notes to the financial statements - continued

14. Deferred taxation 16. Financial instruments by category Deferred tax liability not recognised The accounting classification of each category of financial instruments, and their carrying values, is set out in the following table: There were no unrecognised deferred tax liabilities at 31 March 2021 or 31 March 2020. NDA Group Authority Deferred tax assets not recognised 2021 2020 2021 2020 The following deferred tax assets have not been recognised as the NDA does not anticipate a taxable surplus arising in the foreseeable future: note £m £m £m £m 2021 2020 Financial assets at fair value through profit or loss (FVTPL): NDA Group £m £m Other investments 18 546 428 - - Tax losses 1,668 1,418 Financial assets (FVTPL) 546 428 - - Accelerated capital allowances 629 644 Financial assets at amortised cost: Intangibles 6 6 Non-current finance lease receivable 19 43 44 71 72 Short term timing differences - - Non-current trade receivables 20 5 - 7 - Deferred tax asset at UK standard rate of Corporation Tax for 2021 of 19% (2020: 19%) 2,303 2,068 Non-current other receivables 20 1 5 3 6 Current trade and other receivables (a) 20 86 248 268 429 Current finance lease receivables 19 1 1 4 4 Cash and cash equivalents 21 199 215 125 95 15. Inventories Total financial assets at amortised cost 335 513 471 606

Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. Cost is calculated using the weighted average method. Net realisable value represents the estimated selling price less all estimated costs of NDA Group Authority completion and all costs to be incurred in marketing, selling and distribution. 2021 2020 2021 2020 note £m £m £m £m Reprocessed uranic material is held at nil value, pending development of long term options and cost estimates for disposition of this Financial liabilities at amortised cost: material, and is disclosed as a contingent liability in note 28. Current trade and other payables (b) 22 (592) (617) (589) (619) Total financial liabilities at amortised cost (592) (617) (589) (619) NDA Group Authority 2021 2020 2021 2020 £m £m £m £m a) Prepayments and VAT are excluded. Raw materials and consumables 24 57 15 48 b) Deferred income and amounts owed to HMRC (in Note 22, other taxes and social security) are excluded Work-in-progress 45 46 - – Total inventories 69 103 15 48 Generally, financial assets and financial liabilities are generated by day-to-day operational activities and are not held to manage the risks facing the NDA in undertaking its activities. Details of the significant accounting policies and methods adopted, The cost of raw materials and consumables recognised as an expense in the year was £42 million in Authority (2020: £55 million) and including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in £48 million in NDA Group (2020: £61 million). respect of each class of financial asset and financial liability are disclosed in note 2.8.

Work-in–progress recognised as an expense in the year in both Authority and NDA Group was £1 million (2020: nil). The Group has a small number of Euro-denominated contracts which are not significant to the financial statements of the Group. This small currency risk is nonetheless still mitigated through the use of forward currency contracts placed with the As a result of a review of the application of the accounting policies for the valuation of inventories within the Authority accounts a Government Banking Service. The currency risk arising from overseas operations within the Group is negligible. one off provisioning charge of £45 million was made in the period (see note 6). The Group is not exposed to any significant level of interest rate risk due to the absence of any commercial borrowings in its Statement of Financial Position.

The Group is exposed to a low level of price risk in respect of its energy trading operations. This risk is mitigated by the trading strategy employed which stipulates how far ahead of time energy products are purchased and sold. Due to the pricing structure and historical nature of reprocessing contracts, there is no significant exposure to price risk.

There is no significant exposure of the Group to liquidity risk due to the nature of its funding arrangement with BEIS.

The NDA is required to place deposit deeds as collateral in respect of certain energy trading costs incurred. The collateral is included within current trade and other receivables in both the Authority and Group Statement of Financial Position. The value at 31 March 2021 is less than £1 million (2020: £2 million). The risk of loss associated with these deposits is considered to be minimal.

In addition to this, a letter of credit is issued by a commercial bank on the NDA’s behalf in favour of a certain supplier, with respect to energy trading costs. This does not give rise to a financial asset in the accounts of the NDA Authority or Group.

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Notes to the financial statements - continued Notes to the financial statements - continued

17. Financial risk management 19. Finance lease receivables (continued)

The NDA is financed by a combination of Government funding Commodity price risk and commercial activities, and as such is not exposed to Commodity price risk is the risk or uncertainty arising from the degree of financial risk faced by other business entities. possible price movements and their impact on the commercial NDA Group Authority Consequently, financial instruments play a more limited role in income and therefore ultimately on the funding requirements 2021 2020 2021 2020 creating and managing risk than would apply to a non-public of the NDA. NDA Group and Authority £m £m £m £m sector body. It does however experience some degree of risk due Amounts receivable under finance leases: to the variability of commercial income. The risk to the NDA in relation to electricity prices is not Not later than one year 2 2 4 4 considered to be significant. Later than one year and not later than five years 6 6 13 17 The NDA applies for funding as part of the Government Spending Later than five years 171 172 199 190 Review. This sets the annual expenditure limit net of the NDA’s Credit risk 179 180 216 211 commercial income, derived largely from reprocessing and spent Credit risk is the risk that a counterparty will default on its Less: unearned finance income (133) (133) (139) (133) fuel and waste management contracts. The NDA is required to contractual obligations resulting in financial loss to the NDA. Present value of minimum lease payments receivable 46 47 77 78 prioritise and allocate funding to deliver the required programme This risk is managed through ongoing monitoring of the aging Less: expected credit loss (2) (2) (2) (2) of work within this net limit, whilst mindful of the potential of receivables (for which expected credit loss impairments have vulnerability of commercial income to plant breakdown. This is been made under IFRS9). The Authority’s contracts are almost Present value of minimum lease payments receivable after expected credit loss 44 45 75 76 achieved through the use of an extensive reporting and control entirely reprocessing and spent fuel and waste management mechanism, which supports a portfolio based approach to contracts, for which the NDA is not taking on any new customers. Of which: managing the opportunities and risks within both the expenditure Current 1 1 4 4 and commercial income. The approach has enabled the NDA to Non-current 43 44 71 72 consistently control net expenditure within the prescribed limits 44 45 75 76

set by the funding regime. Amounts receivable under finance leases:

Not later than 1 year 1 1 4 4 Later than 1 year and not later than 5 years 6 6 11 14 Later than 5 years 37 38 60 58 Present value of minimum lease payments receivable 44 45 75 76 18. Other investments NDA Group Authority The finance lease receivable relates to: 2021 2020 2021 2020 (a) L and and buildings of the Springfields Fuels operation which was disposed of to Westinghouse Electric UK Holdings NDA Group and Authority £m £m £m £m Ltd by way of a 150 year lease on 1 April 2010. The interest rate inherent in the lease was fixed at the contract date for Bank deposits 86 67 – – all of the lease term. The average effective interest rate contracted approximates to 3.50% per annum. Managed investments 460 361 – – (b) C ertain land and buildings of the Capenhurst site which were disposed of to Urenco UK Ltd on 29 November 2012 by way Total Other Investments 546 428 – – of a combination of freehold and leasehold sales. The interest rate inherent in the lease was fixed at the contract date for all of the l ease term. The average effective interest rate contracted approximates to 3.50% per annum. Managed investments comprises of funds held within Rutherford Indemnity Ltd in order to allow it to provide insurance for assets (c) T he office building at Harwell is leased by the Authority and subsequently leased out to Radioactive Waste across the NDA estate. Management on a back to back arrangement. This is treated as an inter-group sub-lease and is eliminated in the Group figures. The sub-lease was entered into in July 2019 on an 8 year term. (d) T hree office buildings leased by the Authority and subsequently leased to Sellafield Ltd on a back to back arrangement w ith a total receivable value of £28 million. These leases are for a period of between 1 and 25 years at the transition date. 19. Finance lease receivables The finance lease receivable balance is secured over the assets leased. The NDA is not permitted to sell or re-pledge the The NDA Group as lessor collateral in the absence of default by the lessee. Leases are classified as finance leases whenever the terms of the Rental income from operating leases is recognised on a straight- lease transfer substantially all the risks and rewards of ownership line basis over the term of the relevant lease. Initial direct costs The maximum exposure to credit risk of the finance lease receivable is the carrying amount. The Authority has assessed its to the lessee. All other leases are classified as operating leases. incurred in negotiating and arranging an operating lease are expected credit loss on finance lease receivables as at the reporting date and determined that all amounts owed by added to the carrying amount of the leased asset and recognised parties outside of the NDA Group are assessed to have an expected credit loss of 5%. Where a sub-lease exists an assessment of the ‘right of use asset’ on a straight-line basis over the lease term. is undertaken rather than the underlying asset.

Amounts due from lessees under finance leases are recognised as receivables at the amount of the discounted rent receivable. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the Authority’s net investment outstanding in respect of the leases.

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20. Trade and other receivables 21. Cash and cash equivalents

NDA Group Authority Cash and cash equivalents comprise cash on hand and demand deposits with an orginal maturity of 3 months or less, and 2021 2020 2021 2020 other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an NDA Group and Authority £m £m £m £m insignificant risk of changes in value. Non-current: Prepayments 31 31 30 31 Trade receivables 5 - 7 - 2021 2020 Other receivables 1 5 3 6 Cash Cash Total Cash Cash Total equivalents equivalents Total non-current trade and other receivables 37 36 40 37 NDA Group £m £m £m £m £m £m Balance as at 1 April 170 45 215 99 14 113 Current: Net change 19 (35) (16) 71 31 102 Trade receivables 44 152 246 362 Balance as at 31 March 189 10 199 170 45 215 Accrued income 31 82 18 64 Other receivables 11 15 4 4 Balances at 31 March were held at: Prepayments 15 11 5 3 Commercial banks 45 10 55 61 45 106 V AT 111 91 109 90 Government banking service 144 - 144 109 - 109 212 351 382 523 Balance as at 31 March 189 10 199 170 45 215 Less: provision for expected credit loss (1) (8) (1) (8) Current trade and other receivables 211 343 381 515 2021 2020 Non-current other receivables relate to lump sum payments made under early retirement arrangements to individuals working for Cash Cash Total Cash Cash Total equivalents equivalents SLCs who have retired early, or who have accepted early retirement, before 31 March 2021. These payments are refundable to the Authority £m £m £m £m £m £m NDA from the appropriate pension scheme at or after the date on which the individual concerned would have reached normal Balance as at 1 April 95 - 95 28 - 28 retirement age. Net change 30 - 30 67 - 67

Balance as at 31 March 125 - 125 95 - 95 Provision for expected credit loss The Authority has assessed its expected credit loss on trade and other receivables as at the reporting date as follows: Balances at 31 March were held at: Commercial banks ------• Amounts owed by UK Government departments are considered to have no expected credit loss, in accordance with FReM Government banking service 125 - 125 95 - 95 • Amounts owed by entities in the NDA estate (subsidiaries and site licence companies) are considered to have no expected credit loss, based on the Authority’s knowledge of the financial position and future operations of each company Balance as at 31 March 125 - 125 95 - 95 • Amounts owed by all other entities have been subject to a probability weighted assessment based in the outcomes of default and no default

Amounts past due (following table) include amounts owed by Government departments, other NDA estate entities and other entities considered relatively low risk by the NDA, therefore the overall expected credit loss risk for these sums is assessed as being relatively low.

The assessment of expected credit loss on trade and other receivables in the reporting period resulted in an impairment gain of £5 million, see note 8 (2020: Impairment loss of £5 million).

Ageing of current trade receivables: NDA Group Authority 2021 2020 2021 2020 NDA Group and Authority £m £m £m £m Neither impaired or past due 36 131 243 348 Not past due: Within 30 days 4 12 - 5 31 to 60 days - - - - 61 to 90 days 1 - - - 91 to 120 days 3 - 3 - Over 120 days - 9 - 9 Total 44 152 246 362

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22. Trade and other payables 23. Lease liabilities

NDA Group Authority The NDA Group as lessee At the commencement date, the Authority measures the 2021 2020 2021 2020 Rentals payable under operating leases are charged to lease liability at the present value of the lease payments £m £m £m £m the statement of net expenditure on a straight-line basis unpaid at that date, discounted using the interest rate Current: over the term of the relevant lease. Benefits received and implicit in the lease if that rate is readily available or the Trade payables 34 100 109 205 receivable as an incentive to enter into an operating lease Group’s incremental borrowing rate as dictated by HM Receipts to surrender to the Consolidated Fund 20 68 20 68 Other payables 9 29 - 1 are also spread on a straight-line basis over the lease term. Treasury. Accruals 529 420 460 344 For any new contracts entered into on or after 1 April 2019, Subsequent to initial measurement, the liability will be 592 617 589 618 the Authority considers whether a contract is, or contains a Other taxes and social security 67 - reduced for payments made and increased for interest. It 63 2 lease. A lease is defined as ‘a contract, or part of a contract, Payments received on account 454 506 447 500 is remeasured to reflect any reassessment or modification, that conveys the right to use an asset (the underlying asset) Deferred income 5 7 2 2 or if there are changes in fixed payments. When the lease for a period of time in exchange for consideration’. To apply Current trade and other payables 1,114 1,197 1,040 1,120 liability is remeasured, the corresponding adjustment is this definition the Authority assesses whether the contract reflected in the right-of-use asset or profit and loss if the meets three key evaluations which are whether: Non-current: right-of-use asset is already reduced to zero. Payments received on account 1,503 1,477 1,503 1,477 • The contract contains an identified asset, which is either Other payables - 4 - - The Authority has elected to account for short-term explicitly identified in the contract or implicitly specified leases and leases of low-value assets using the practical Non-current trade and other payables 1,503 1,481 1,503 1,477 by being identified at the time the asset is made expedients. Instead of recognising a right-of-use asset

available to the Authority and lease liability, the payments in relation to these are • The Authority has the right to obtain substantially all of recognised as an expense in profit or loss on a straight-line the economic benefits from use of the identified asset basis over the lease term. NDA Group Authority throughout the period of use, considering its rights 2021 2020 2021 2020 within the defined scope of the contract £m £m £m £m Initial direct costs incurred in negotiating and arranging an • The Authority has the right to direct the use of the Movements on gross payments received on account: operating lease are added to the carrying amount of the identified asset throughout the period of use Balance at 1 April per accounts 5,287 5,256 5,281 5,249 leased asset and recognised on a straight-line basis over the lease term. Revalorisation 61 126 61 126 Measurement and recognition of leases as a lessee Cash received 300 341 300 341 At lease commencement date, the Authority Released to income (445) (436) (446) (435) The lease term determined by the Authority comprises recognises a right-of-use asset and a lease liability Balance at 31 March 5,203 5,287 5,196 5,281 a non-cancellable period of a lease contract, periods on the balance sheet. covered by an option to extend the lease if the Authority Gross payments on account at 31 March 5,203 5,287 5,196 5,281 is reasonably certain not to exercise that option. The The right-of-use asset is measured at cost, which is made Deduction of recoverable contract costs (see note 13) (3,246) (3,304) (3,246) (3,304) Authority has benefitted from the use of hindight for up of the initial measurement of the lease liability, any Net payments received on account at 31 March 1,957 1,983 1,950 1,977 determining the lease term when considering options to initial direct costs incurred by the Authority, an estimate of extend and terminate leases. any costs to dismantle and remove the asset at the end of Of which: the lease, and any lease payments made in advance of the Current 454 506 447 500 Non-current 1,503 1,477 1,503 1,477 lease commencement date (net of any incentives received). 1,957 1,983 1,950 1,977 The Authority depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of- Trade and other payables and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. use asset or the end of the lease term. The Authority also The NDA has procedures in place to ensure that all payables are paid within the pre-agreed credit terms. assesses the right-of-use asset for impairment when such indicators exist. Payments received on account relate to amounts which customers have paid for the provision of services under long-term contracts. These payments will be recognised as income when the services are provided. Payments received on account are shown net after deduction of any applicable recoverable contract costs (see note 13). Payments on account not yet recognised as revenue are adjusted for inflation each year (known as revalorisation).

Payments on account balances are deemed as contract liabilities under IFRS15.

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23. Lease liabilities (continued) 24. Nuclear provisions

The Authority has entered into commercial leases for land and Each lease generally imposes a restriction that, unless there is a The financial statements include provisions for the NDA’s From 2018/19 onwards guidance issued by HM Treasury buildings; motor vehicles; locomotives/rolling stock; and plant contractual right for the Authority to sublet the asset to another obligations in respect of nuclear liabilities, being the costs determines a nominal discount rate, and recommends (in what and equipment. With the exception of short term leases and party, the right of use asset can only be used by the Authority. associated with the nuclear decommissioning of designated is termed a rebuttable presumption) an implied inflation rate leases of low-value underlying assets, each lease is reflected on Leases are either non-cancellable or may only be cancelled by sites. These are the licensed nuclear sites designated to the NDA based on forecasts of Consumer Price Index (CPI) inflation the balance sheet as a right-of-use asset and a lease liability. incurring a termination fee. The Authority is prohibited from by the Secretary of State under powers provided by the Energy made by the Office of Budget Responsibility (OBR). Reporting Right-of-use assets and the underlying asset class to which they selling or pledging the underlying leased assets as security. Act 2004 and operated under contract to the NDA by the SLCs. entities are able to select and apply an implied inflation rate relate are shown at note 11. Variable lease payments which do In general, leases dictate that the Authority must keep those These provisions are based on the latest assessments of the which differs from the recommended rate where this can be not depend on an index or a rate are excluded from the initial assets in a good state of repair and return the assets in their processes and methods likely to be used in the future, and demonstrated to be clearly more applicable to the underlying measurement of the lease liability and asset. original condition at the end of the lease allowing for normal represent best estimates of the amount required to discharge nature of the entity’s cash flows. wear and tear. Further, the Authority must insure items of prop- the relevant obligations. The NDA’s obligations are reviewed on The leases for land and buildings have remaining durations of erty, plant and equipment and incur maintenance fees on such a continual basis and provisions are updated accordingly. The Authority has determined that, based on inflation between 1 and 25 years. items in accordance with the lease contracts. experienced in its cash flows in recent years and future The leases for motor vehicles have durations up to a period of Where some or all of the expenditure required to settle a expectations, the implied inflation rate recommended by HM 4 years. The Authority has leases of land and buildings, vehicles and provision is expected to be recovered from a third party, Treasury is appropriate for use in calculating its provisions. The leases for locomotives and rolling stock have remaining plant and equipment with lease terms of 12 months or less and in accordance with IAS 37 ‘Provisions, Contingent Liabilities durations of between 1 and 5 years. leases of office equipment of low value. The Authority applies and Contingent Assets’, the recoverable amount is treated The rates applied in the 2020/21 accounts are shown in the table The leases for Plant and equipment have durations up to a the ‘short-term lease’ and ‘lease of low-value assets’ recognition as a non-current asset. Provision charges in the Statement of below (rates per annum). period of 4 years. exemptions for these leases as permitted by IFRS16. Comprehensive Net Expenditure are shown net of changes in the amount recoverable from customers. Provision changes are Provision movement expenditure in the Statement of accounted for in the year in which they arise. Comprehensive Net Expenditure includes the adjustments necessary to unwind one year’s discount and restate the The nuclear provision and recoverable balances are expressed liabilities to current price levels. The movement also includes the The undiscounted maturity analysis of lease liabilities as at 31 March 2021 is as follows: at current price levels and discounted in accordance with adjustments arising from the change in discount rates described guidance issued by HM Treasury. In reporting periods up to above. NDA Group Authority and including 2017/18 HM Treasury determined a real terms 2021 2020 2021 2020 discount rate to be applied in calculating provisions. A real £m £m £m £m terms rate combines a nominal discount rate and an implied Lease liabilites inflation rate. Not later than one year 26 25 2 3 Later than one year and not later than five years 45 41 7 8 Later than five years 16 9 28 29 Total cash payments 87 75 37 40 Less amount representing interest (6) (8) (8) (7) Time Period Nominal discount Implied Real terms Equivalent rate in 69 32 Present Value of lease liability 79 30 rate inflation rate discount rate 2019/20

Of which: Short term Year 1 -0.02% 1.20% -1.22% -1.49% Current 25 25 1 3 Non-current 54 44 29 29 Short term Year 2 -0.02% 1.60% -1.62% -1.49% 79 69 30 32 Short term Years 3-5 -0.02% 2.00% -2.02% -1.49%

Depreciation charged on right-of-use assets during the year Medium term After 5 and up to and 0.18% 2.00% -1.82% -1.45% (also shown at note 11) 33 25 - - including 10 years Expenses relating to short-term leases (1) 2 (1) 1 Expenses relating to leases of low-value assets - - - 1 Long term After 10 and up to 1.99% 2.00% -0.01% -0.01% Interest expense on leases liabilities (2) 2 (1) 1 and including 40 Total cash outflow for leases (28) 28 (4) 3 years of which low value or short term (1) 2 (1) - Very Long Exceeding 40 years 1.99% 2.00% -0.01% -0.01% Variable lease costs expensed term (where not included in the ROUA and lease liability) - - - - Income from sub-leasing 9 9 3 3 Gains/losses from sale and leaseback transactions n/a n/a n/a n/a

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24. Nuclear provisions (continued) 24. Nuclear provisions (continued) NDA Group Authority 2021 2020 2021 2020 NDA Group and Authority £m £m £m £m Analysis of expected timing of discounted cash flows for the NDA Group nuclear provision is as follows: Balance at 1 April 134,746 129,958 134,868 130,658

Provided for in the year (a), charged to: Fuel Statement of Comprehensive Net Expenditure (note 7) 3,729 6,792 3,729 6,791 manufacturing 2021 2020 Recoverable contract costs (b) (note 13) 117 334 117 334 Sellafield Waste & generation Research Others Total Total Unwind of discount (c), charged to: NDA Group £m £m £m £m £m £m £m Statement of Comprehensive Net Expenditure (note 7) (7) (129) (7) (129) Within 1 year 2,291 108 479 185 79 3,142 2,941 Recoverable contract costs (b) (note 13) (8) (7) (8) (7) 2–5 years 10,452 583 2,001 796 423 14,255 12,349 6–20 years 32,093 3,022 5,599 1,465 781 42,960 42,661 Decommissioning costs utilised in year (d) (note 7) (2,737) (2,595) (2,737) (2,595) 21–50 years 31,966 3,488 8,781 119 565 44,919 45,736 Recoverable contract costs released in year (b) (note 13) (199) (185) (199) (185) After 50 years 22,474 4,233 3,387 52 367 30,513 31,201 In-year Group provision adjustment - Sellafield Ltd (e) (note 7) (203) 239 - - 99,276 11,434 20,247 2,617 2,215 135,789 134,888 Opening Group provision adjustment - Magnox Ltd (e) - (113) - - Deduction in respect of pension In-year Group provision adjustment - Magnox Ltd (e) (note 7) (223) 491 - - deficits (e) (569) (142) Provision changes impacting PPE (f) (note 11) 5 (39) - - Total NDA Group 135,220 134,746 Total change in provision 474 4,788 895 4,209 Sensitivity: Balance at 31 March 135,220 134,746 135,763 134,867 Increase 81,659 25,360 2,025 175 109 Of which: Reduction (13,610) (3,768) (2,025) (351) (219) Current (Nuclear Provision) 3,142 2,941 3,142 2,941 Non-current (Nuclear Provision) 132,078 131,805 132,621 131,926 The NDA calculates its provision based on management’s best estimate of the future costs of the decommissioning programme, 135,220 134,746 135,763 134,867 which is expected to take until 2137 to complete. The NDA also considers credible risks and opportunities which may increase or decrease the cost estimate, but which are deemed less probable than the best estimate. These are the basis of the sensitivities identified above, and the key sensitivities are as follows: (a) Changes in the cost estimates of discharging the nuclear (d) A total of £2,936 million (2020: £2,780 million) has been provision (representing increase or decrease in future released from the nuclear provision in the year to 31 March, • Waste activities cover the Low Level Waste Repository and the GDF, with the key sensitivities being in the timing and costs of decommissioning costs) are charged to the adjustments to being the amount provided for that year as at 31 March 2020, constructing and operating the GDF. The above range from a reduction of £3,768 million to an increase of £25,360 million reflects provisions in the Statement of Comprehensive Net Expenditure. adjusted for price changes. three separate sensitivities: This charge includes the impact of restating liabilities from March 2019 values to current price levels. The overall increase (e) In-year Group provision adjustments are made for the in the provision was £474 million (2020: £4,788 million increase) movements in the respective net pension deficit/surplus at 1. The potentially higher costs of constructing and operating the GDF itself, which is dependent on the location and construction of which the Authority estimates that £1,384 million related to Sellafield Ltd and Magnox Ltd, which are already implicitly requirements of the facility, could be up to £22,229 million higher (or £3,705 million lower) than the base case changes in price levels (2020: £4,035 million). included in the nuclear provision and so are deducted here. assumption The opening balance of the net pension deficit/surplus is 2. The impact of the timing of the facility’s construction and operations. The current planned date for the facility to receive waste is The change in discount rates (see table on previous page) in the included in the Group opening nuclear provision, and the 2045. NDA has identified a risk that the construction and opening of the facility may be delayed beyond 2045 (see Governance current financial year produced an increase of £697 million (2020: in-year movement included in the note. Statement page 57) A delay to this date may increase the cost of the facility itself, along with the cost of interim storage of waste at £3,818 million decrease). sites across the NDA estate. A delay of a small number of years is considered to be within the overall tolerance of the estimate for GDF The 2020/21 movement at Sellafield Ltd is an increase in the construction and waste transfer, and is not considered to have a material impact on the provision estimate. (b) The NDA has commercial agreements in place under which a deficit of £203 million (2019/20: increase of £239 million). 3. A longer delay of say 20 years could materially impact the provision, by approximately £2,100 million. A delay of 20 years would not portion of the expenditure required to settle certain elements of necessarily increase the underlying costs of the facility, but would increase the discounted value of the estimate by approximately the nuclear provision are recoverable from third parties. Changes The 2020/21 movement at Magnox Ltd is a reduction in the in the future cost estimates of discharging those elements of the surplus of £223 million (2019/20: increase of £491 million). £1,000 million due to the effect of long term negative discount rates nuclear provision are therefore matched by a change in future recoverable contract costs. In accordance with IAS 37, these (f) Changes in the estimated future cost of decommissioning, • Activities on the sites primarily used for research (Dounreay, Harwell, and Winfrith) are concerned with final decommissioning of recoverable amounts are not offset against the nuclear provision related to commercial property, plant and equipment, are offset assets and site clearance. Sites will be cleared by 2080. Options are being explored to accelerate site clearance, which in the case of but are treated as a separate asset. The amount recoverable by matching changes in the value of the IAS 37 property, plant Dounreay would reduce the provision by £351 million; an increase in the cost and/or a delay of 1 year past the latest anticipated Interim at 31 March 2021 (NDA Group and Authority) is £3,481 million and equipment asset. An increase of £5 million was recognised State date (2033) would increase the provision by up to £175 million (2020: £3,571 million) – the ‘future costs’ balance in note 13. in the year (2020: £39 million decrease). • Sellafield represents activities associated with operation of the site, reprocessing and eventual decommissioning, and includes all site overheads. Principal sensitivities are around the cost of delivering the plan, particularly the costs of new construction, (c) The discount implicit in recognising nuclear provisions is decommissioning and post operational clean out (POCO) work in the long-term (beyond the next 20 years). The potential costs range unwound over the life of the provisions, with the impact of the unwind of one years’ discount shown in adjustments to from a £13,610 million reduction against the current estimate, to a £81,659 million increase provisions in the Statement of Comprehensive Net Expenditure. An increase of 0.5% in the discount rate (producing a less • Fuel manufacturing and generation (which for this purpose includes Magnox and Springfields) programme of work includes negative, or more positive, discount rate) would reduce the defueling the generating stations and preparing for interim care and maintenance (complete by 2030) followed by final site clearance provision to £117 billion, (2019/20 £116 billion) whilst a decrease in discount rate of 0.5% (producing a more negative, or less positive, discount rate) would increase the provision to £159 billion (2019/20 £159 billion).

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26. Retirement benefit schemes 25. Other provisions • The ENSIGN Retirement Plan; and The NDA Group has a range of pension schemes including both • The Merchant Navy Ratings’ Group Personal Pension Plan defined contribution and defined benefit plans. (MNRGPPP)

Contract Contract The National Employment Savings Trust (NEST) is an auto Restructuring (a) loss (b) Other (c) Total Restructuring loss Other Total Defined contribution schemes 2021 2021 2021 2021 2020 2020 2020 2020 For defined contribution schemes the amount charged to enrolment scheme set up by the Government. There is a small NDA Group £m £m £m £m £m £m £m £m operating costs is the contributions payable in the year. number of NDA Group employees who have exhausted their Balance at 1 April 68 401 37 506 61 373 37 471 NDA and RWM employees have pension benefits provided participation in their respective pension schemes and have Provided in year 6 (120) 14 (100) 14 156 - 170 through the Civil Service pension arrangements. From 1 April been auto enrolled into NEST. Released in year (7) (73) - (80) (7) (125) - (132) 2015 a new pension scheme for civil servants was introduced – The total cost charged to expenditure of £36,205,000 Unwind of discount - (6) 1 (5) - (3) - (3) the Civil Servants and Others Pension Scheme or alpha, which provides benefits on a career average basis with a normal (2020: £39,795,000) represents contributions payable to these Balance at 31 March 67 202 52 321 68 401 37 506 pension age equal to the member’s State Pension Age (or 65 schemes by the Group at rates specified in the rules of the Amount deducted from recoverable if higher, details are described on page 99). Prior to that date, schemes. No contributions were outstanding at this or the contract costs - (202) - (202) - (358) - (358) NDA and RWM employees participated in the Principal Civil previous year end. Net balance at 31 March 67 - 52 119 68 43 37 148 Service Pension Scheme (PCSPS). Further information on the of which: PCSPS and alpha pension schemes can be found within the Defined benefit schemes Current 14 18 Notes to the Remuneration and People reports on pages 98 to The Group participates in various pension schemes which are accounted for as defined benefit schemes. The liability Non-current 105 130 100. recognised in the Statement of Financial Position is the present 119 148 Both alpha and the PCSPS are unfunded multi-employer value of the defined benefit obligation at the reporting date less defined benefit schemes in which the NDA and RWM are unable the fair value of scheme assets, together with any adjustments Contract Contract to identify their share of the underlying assets and liabilities. for unrecognised past service costs. Any amounts recoverable Restructuring (a) loss (b) Other (c) Total Restructuring loss Other Total from third parties are recognised as separate assets. 2021 2021 2021 2021 2020 2020 2020 2020 The scheme actuary valued the scheme as at 31 March 2016 and Authority £m £m £m £m £m £m £m £m details can be found in the resource accounts of the Cabinet Balance at 1 April 68 400 - 468 61 372 10 443 Office: Civil Superannuation at: www.civilservicepensionscheme. The defined benefit obligation is calculated annually by Provided in year 6 (120) - (114) 14 156 (10) 160 org.uk/about-us/resource-accounts/. independent actuaries using the projected unit credit Released in year (7) (72) - (79) (7) (125) - (132) The next actuarial valuation has not yet been completed. In method. The present value of the defined benefit obligation is Unwind of discount - (6) - (6) - (3) - (3) accordance with guidance issued by HM Treasury, the Civil determined by discounting the estimated future cash outflows using interest rates of high quality corporate bonds that have Balance at 31 March 67 202 - 269 68 400 - 468 Service pension arrangements are accounted for as a defined terms to maturity approximating to the terms of the related Amount deducted from recoverable contribution scheme in these financial statements. pension liability. contract costs - (202) - (202) - (358) - (358) Direct Rail Services Ltd (DRS), International Nuclear Services Net balance at 31 March 67 - - 67 68 42 - 110 Ltd (INS), Sellafield Ltd and Magnox Ltd employees joining after Actuarial gains and losses arising from experience adjustments of which: the closure date of their retrospective defined benefit schemes and changes in actuarial assumptions are charged or credited in Current 7 7 (see below) participate on a defined contribution basis in the other comprehensive income in the period in which they arise. Non-current 60 103 Combined Nuclear Pension Plan (CNPP). Past service costs are recognised immediately in operating 67 110 costs to the extent that the benefits are already vested, and A small number of employees transferred to the NDA from INS otherwise are amortised on a straight-line basis over the in 2019 and continue to accrue benefits in the United Kingdom average period until the benefits become vested. The interest Atomic Energy Authority (UKAEA) Combined Pension Scheme. cost and the expected return on assets are shown as a net The NDA is unable to identify their share of the underlying amount of interest costs. (a) Restructuring provisions have been recognised to cover (b) Contract loss provisions have been recognised to cover the assets and liabilities and NDA’s participation in the UKAEA continuing annual payments to be made under early retirement anticipated shortfall between total income and total expendi- Combined Pension Scheme is accounted for as if they were Pension scheme assets are recognised to the extent that they arrangements to individuals working for SLCs who retired ture on relevant long-term contracts. The above balances are defined contribution schemes, as permitted under IAS 19 are recoverable and pension scheme liabilities are recognised to early, or had accepted early retirement, before 31 March shown net after deduction from any applicable recoverable the extent that they reflect a constructive or legal obligation. 2021. These payments continue at least until the date at contract costs (see note 13). The amount provided in the year INS employees participate in the UKAEA Combined Pension which the individual would have reached normal retirement for the contract loss provision relates to changes in estimates Scheme, the CNPP and the Magnox Electric Group section of GPS DRS section of the CNPP age. Lump sums paid to individuals on retirement are held as of the costs of existing contracts. the Electricity Supply Pension Scheme. Participation in these DRS participates in the GPS DRS section of the CNPP, a defined receivables (included in note 20), since they are refundable to schemes is in sections with other employers and INS is unable benefit (final salary) funded pension scheme. The defined the NDA from the appropriate pension scheme at or after the (c) Includes provisions for potential insurance claims and main- to identify its share of the underlying assets and liabilities. benefit structure was available to all DRS employees until 31 date on which the individual concerned would have reached tenance requirements Consequently INS’s participation in these schemes is accounted March 2008 when it was closed to new entrants. normal retirement age. for as if they were defined contribution schemes, as permitted under IAS 19. INS’s contributions to these schemes are assessed Nirex section of the CNPP as part of regular actuarial valuations of those schemes and will The Nirex section of the CNPP is a defined benefit (final salary) vary in line with the funding position of the relevant scheme. funded pension scheme. The Nirex section was closed to new entrants on 1 April 2007 and has no active members. Pacific Nuclear Transport Ltd (PNTL) participates in the following industry wide defined contribution schemes:

156 157 NDA Annual Report and Accounts 2020/21 NDA Annual Report and Accounts 2020/21

Notes to the financial statements - continued Notes to the financial statements - continued

26. Retirement benefit schemes (continued) Closed section of the CNPP • The aggregate average duration of the CNPP obligation 26. Retirement benefit schemes (continued) On the disposal of the Springfields Fuels operation the NDA is 25 years (2020: 22 years), although this differs slightly took over direct responsibility of the pension liability within by section. For those sections within NDA Authority, the Other risks The Merchant Navy Ratings Pension Fund Trustee became the Springfields Fuels section of the CNPP on 1 April 2010. The aggregate average duration is 20 years (2020: 19 years) There are a number of other risks involved in sponsoring defined aware in 2018 of legal uncertainties relating to the ill-health early Closed section (formerly the Springfields Fuels Section) of the • The aggregate average duration of the Magnox Electric benefit schemes including operational risks and legislative risks. retirement benefits payable from the fund since the early 1990s. CNPP is a defined benefit (final salary) funded pension scheme. Group section of the electricity supply pension scheme The scheme trustees regularly assess these risks as part of their It is possible that the issue could result in significant additional The Closed section was closed to new entrants and further obligation is 16 years ongoing governance process. benefit liabilities for the fund. The Trustee is seeking directions accrual on 31 March 2010. from the Court. No allowance has been made for the potential In relation to the Merchant Navy schemes, whilst the schemes liabilities that could possibly arise. Sellafield and GPS SLC sections of the CNPP are sectionalised, they operate on a ‘last man standing’ basis Sellafield Ltd participates in the Sellafield and GPS SLC sections such that a participating employer can become liable for part of the CNPP, a defined benefit (final salary) funded pension of the obligations of another participating employer should NDA Group scheme. The defined benefit structure was available to all that employer withdraw from the scheme with underfunded Employee benefit obligations Sellafield Ltd employees up to 24 November 2008 when it was obligations. The average duration of the Merchant Navy The amounts recognised in the Statement of Financial Position are as follows: closed to new entrants. schemes obligations is 14 years (2020: 12 years). 2021 2020 £m £m

Magnox section of the CNPP and Magnox Electric Group Actuarial valuations for the various defined benefit schemes Benefit obligations 6,745 5,785 section of the Electricity Supply Pension Scheme referred to above are performed on a triennial basis with ‘roll Fair value of scheme assets (6,177) (5,637) Magnox Ltd participates in the Magnox and GPS SLC sections forward’ valuations performed in intervening years. Accordingly Deficit in schemes 568 148 of the CNPP and the SLC Section of the Magnox Electric the relevant valuations have been updated at 31 March 2021 by Unrecognised asset under IAS 19 para 64b 8 2 Group section of the Electricity Supply Pension Scheme which independent actuaries using assumptions that are consistent Receivable from third parties - (1) is defined benefit (final salary) funded pension scheme. The with the requirements of IAS 19 and the results of those Net deficit recognised in schemes 576 149 defined benefit structure was available to all Magnox Ltd calculations have been incorporated in the figures below. employees up to 26 June 2007 (or 1 November 2009 for former Investments have been valued for this purpose at fair value. employees of Research Sites Restoration Ltd) when it was closed to new entrants. Risks associated with the Group’s defined benefit schemes Statement of Comprehensive Net Expenditure The amounts recognised in the Statement of Comprehensive Net Expenditure are as follows: The defined benefit schemes expose the Group to a number 2021 2020 Merchant Navy Officers Pension Fund (MNOPF) of risks such as: £m £m PNTL employees participate in the Merchant Navy Officers Current service cost 160 195 Changes in bond yields Pension Fund (MNOPF). The MNOPF is an industry wide defined Past service cost 6 6 benefit (final salary) funded pension scheme. The scheme was Pension liabilities are calculated using discount rates linked to Net interest on net defined benefit (DB) assets/liabilities 3 22 closed on 1 November 1996. All costs relating to ‘Pacific’ vessels bond yields which are subject to volatility. In order to mitigate Net cost in SoCNE 169 223 are recoverable under contract from customers and hence a this risk the schemes hold a proportion of their assets in bonds,

recoverable amount is recognised to offset the related pension which provide a hedge against falling bond yields. Actuarial (gain)/loss 366 (873) scheme deficit. Movement in unrecognised asset under IAS 19 para 64b 6 (3) Investment risk Merchant Navy Ratings Pension Fund (MNRPF) Some asset classes such as equities, which are expected to Receivable from third parties - (1) PNTL employees participate in the Merchant Navy Ratings provide higher returns over the long term, are subject to short Actuarial (gain)/loss recognised in OCE 372 (877) Pension Fund (MNRPF). The MNRPF is an industry wide defined term volatility and may lead to deficits if assets underperform benefit (final salary) funded pension scheme. The scheme the discount rate used to calculate future liabilities. The was closed on 31 May 2001. The liabilities of the scheme have allocation to such assets is monitored to ensure it remains Changes in the present value of the defined benefit obligations been capped at the level of benefits accrued to employees appropriate given the schemes’ long-term objectives. The amounts recognised in the Statement of Financial Position are as follows: at the closure date, subject to adjustment for future actuarial 2021 2020 £m £m valuations. All costs relating to ‘Pacific’ vessels are recoverable Inflation risk Opening defined benefit obligation 5,785 3,147 under contract from customers and hence a recoverable Since most of the scheme liabilities are indexed in line with price amount is recognised to offset the related pension scheme inflation, higher than assumed levels of inflation will increase Aquisition of Magnox Ltd - 3,788 deficit. the liabilities. In order to mitigate this risk the schemes hold a Current service cost 160 196 proportion of their assets in index-linked bonds. Past service cost 6 6 In relation to the CNPP and Magnox Electric Group section of Net interest on scheme liabilities 129 118 Longevity risk the Electricity Supply Pension Scheme it is noted that: Employee contributions 17 18 Increases in life expectancy will result in an increase in liabilities. Actuarial (gain)/loss 876 (1,328) The scheme actuaries regularly review actual experience of • the scheme is sectionalised and individual sections can- Benefits paid (228) (160) not be liable for any other sections’ obligations under the scheme membership against the actuarial assumptions the rules of the scheme underlying the valuation of the liabilities and carry out detailed analysis when setting appropriate scheme specific mortality Closing defined benefit obligation 6,745 5,785 • there is no agreed allocation of any surplus or deficit assumptions. should a participating employer withdraw from the scheme or on wind up. In such an event the participating employer’s obligations would be subject to negotiation with the scheme trustees in light of the funding position of the scheme at that time

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Notes to the financial statements - continued Notes to the financial statements - continued 26. Retirement benefit schemes (continued) 26. Retirement benefit schemes (continued)

Changes in the fair value of the scheme assets are as follows: Mortality assumption 2021 2020 £m £m 2021 Opening fair value of scheme assets 5,637 2,354 MNOPF: S2PA, CMI19 projections, 1.0% trend (weightings as adopted at the last valuation of the fund), SK=7.0 A=0.0% initial addition Aquisition of Magnox Ltd - 3,675 MNRPF: S2IA, CMI19 projections, 1.0% trend (weightings as adopted at the last valuation of the fund), SK=7.0 A=0.0% initial addition Interest income on scheme assets 126 96 Magnox Electric: 95%(pensioner)/100% (non-pensioner) of the S2PXA tables with CMI2020 projections (SK=7.0 A=0.5%), 1.0% trend Actuarial gain/(loss) 510 (455) All others: 110% S3P SAPS CMI19 projections, 1.25% trend Employer contributions 115 109 Employee contributions 17 18 2020 Benefits paid (228) (160) MNOPF & MNRPF: 100% S2PA CMI18 projections, 1.0% trend (males and females) Closing fair value of scheme assets 6,177 5,637 Magnox Electric: 85%(pensioner)/90% (non-pensioner) of the S2PXA tables with CMI2018 projections (SK=7.0 A=0.5%), 1.0% trend All others: 100% S2P SAPS CMI18 projections, 1.00% trend (males and females)

Changes in the value of unrecognised assets under IAS 19 para 64b are as follows: 2021 2020 2021 2020 £m £m £m £m Experience adjustments on plan liabilities 176 (11) Opening value of unrecognised assets 2 5 Experience adjustments on plan assets 510 (455) Movement in unrecognised assets 6 (3) Closing value of unrecognised assets 8 2 Sensitivity analysis Impact on DB Impact on DB Change in obligation as Change in obligation as Change to assumption at 31.03.21 assumption at 31.03.21 Estimated expected employer contributions over the next financial year are as follows: Discount rate Increase by 0.5% -9.5% Decrease by 0.5% 11.2% 2021 2020 Rate of salary increase Increase by 0.5% 2.0% Decrease by 0.5% -1.8% £m £m Rate of price inflation Increase by 0.5% 10.9% Decrease by 0.5% -9.3% Contributions including deficit repair payments 150 122 Rate of mortality Increase by 1 year 4.1%

The major categories of plan assets as a percentage of total scheme assets are as follows: 2021 2020 Authority % % Employee benefit obligations Equities 21 15 The amounts recognised in the Statement of Financial Position are as follows: Property 9 8 Fixed Interest Gilts - 1 2021 2020 £m £m Index Linked Gilts 7 8 Benefit obligations 143 130 Corporate Bonds 11 8 Fair value of scheme assets (152) (135) Hedge funds - - Deficit/(surplus) in schemes (9) (5) Credit investment 9 8 Receivable from third parties - - LDI Fund 22 26 Net deficit/(surplus) recognised in schemes (9) (5) Other growth assets 20 23 Cash/other 1 3 Total 100 100 Statement of Comprehensive Net Expenditure The amounts recognised in the Statement of Comprehensive Net Expenditure are as follows:

Principal actuarial assumptions at the date of the SOFP (expressed in weighted averages): 2021 2020 2021 2020 £m £m % % Current service cost - - Discount rate 2.00 2.25 Net interest on net defined benefit assets / liabilities - - Future salary increases* 0.00-3.15 2.00–3.00 Net cost in SoCNE - - Rate of increase of pensions in payment 2.70 2.40 Actuarial (gain)/loss (3) (22) Rate of increase of pensions in deferment 2.40-2.70 2.00–2.40 Receivable from third parties - - Retail Price Inflation 3.00 2.40 Actuarial (gain)/loss recognised in OCE (3) (22) Life expectancy for a male pensioner aged 65 (in years) 21.80 22.20 Life expectancy for a male non-pensioner currently aged 45 from age 65 (in years) 22.80 23.10

*For those schemes with members accruing benefits future salary increases for 2021 are assumed to be between 0.0% and 2.0% in the first year, and then between 2.0% and 3.15% thereafter.

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Notes to the financial statements - continued Notes to the financial statements - continued

26. Retirement benefit schemes (continued) 26. Retirement benefit schemes (continued)

Changes in the present value of the defined benefit obligations Mortality assumption The amounts recognised in the Statement of Financial Position are as follows: 2021 2020 2021 £m £m Nirex and Closed: 110% S2P SAPS CMI19 projections, 1.25% trend (males and females) Opening defined benefit obligation 130 158 Net interest on scheme liabilities 3 4 2020 Actuarial (gain)/loss 15 (28) Nirex and Closed: 100% S2PA CMI18 projections, 1.0% trend (males and females) Benefits paid (5) (4) Closing defined benefit obligation 143 130 2021 2020 £m £m Experience adjustments on plan liabilities 10 - Experience adjustments on plan assets 18 (6) Changes in the fair value of the scheme assets are as follows: 2021 2020 £m £m Opening fair value of scheme assets 135 140 Sensitivity analysis Interest income on scheme assets 3 4 Impact on DB Impact on DB Employer contributions 1 1 Change in obligation as Change in obligation as Actuarial gain/(loss) 18 (6) Change to assumption at 31.03.21 assumption at 31.03.21 Benefits paid (5) (4) Discount rate Increase by 0.5% -9.3% Decrease by 0.5% 10.7% Closing fair value of scheme assets 152 135 Rate of salary increase Increase by 0.5% 0.0% Decrease by 0.5% 0.0% Rate of price inflation Increase by 0.5% 10.7% Decrease by 0.5% -9.3% Rate of mortality Increase by 1 year 3.7%

Estimated expected employer contributions over the next financial year are as follows: 2021 2020 27. Non-controlling interests £m £m Contributions including deficit repair payments 1 1 2021 2020 NDA Group £m £m At 1 April 2 2 Change in equity of non-controlling interests during year - - The major categories of plan assets as a percentage of total scheme assets are as follows: 2021 2020 At 31 March 2 2 % % Equities 32 25 Property 11 8 28. Contingent liabilities Fixed Interest Gilts - - Index Linked Gilts 25 28 Indemnities Corporate Bonds 21 23 Under the transfer scheme of 1 April 2005, the NDA has assumed responsibility for all occurrences relating to the Credit investments 14 13 designated nuclear sites that took place up to that date.

Cash - - a) At 31 March 2021 the NDA held inventories of reprocessed uranic material. These materials are currently held at Total 100 100 nil value, due to uncertainty over their future use, which may result in as-yet-unquantified liabilities for the NDA.

b) Whilst not the lead employer, the NDA is the lead organisation and has ultimate responsibility for certain nuclear Principal actuarial assumptions at the date of the SOFP (expressed in weighted averages): industry pension schemes, including the Combined Nuclear Pension Plan, the Magnox section of the ESPS, and the GPS Pension Scheme. Provisions for known deficits are included within Nuclear Provisions. However, movements in 2021 2020 financial markets may adversely impact the actuarial valuations of the schemes, resulting in an increase in scheme deficits £m £m and consequent increase in the nuclear provisions. Discount rate 2.00 2.25 Future salary increases 0.00 – c) In previous reporting periods the Authority maintained a provision for the settlement of health claims payable to former employees in the civil nuclear industry. Claims have reduced to a non-material level in recent years and the Rate of increase of pensions in payment 2.70 2.40 future level of remaining claims is expected to be non-material and not able to be accurately forecast. The Authority has Rate of increase of pensions in deferment 2.00-2.70 2.00–2.40 therefore discontinued accounting for the provision but recognises the resulting contingent liability Retail Price Inflation 3.00 2.40 Life expectancy for a male pensioner aged 65 (in years) 21.20 21.30 International Carrier Bond Life expectancy for a male non pensioner currently aged 45 from age 65 (in years) 22.60 22.40 During 2014/2015 the NDA procured a US Bond on behalf of their subsidiary, INS Ltd, in order to meet US law in respect of vessels calling at US ports for commercial purposes. This Bond is required to ensure that all duties, taxes and fees owed to the Federal Government are paid. The Bond would therefore only be called on in the case of non-payment of any of the above, and the total cost would not be expected to exceed $100,000.

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Notes to the financial statements - continued Notes to the financial statements - continued

29. Related parties (continued) 29. Related parties

Government bodies Loans to related parties The NDA is an Executive NDPB sponsored by BEIS, which is regarded as a related party. During the year, the NDA has had Amounts owed by DRS includes a loan of £7 million which is interest bearing at a fixed percentage above Bank of various material transactions with BEIS and with other entities for which BEIS is regarded as the responsible department. England base rate. The loan is not repayable until at least 2022. The NDA receives grant financing from BEIS. Amounts owed by NDA Properties Ltd includes a loan of £20 million which is interest bearing at a fixed rate, repayable in instalments over 25 years to 2038. At 31 March 2021 the balance owing was £15 million (2020: £16 million). In the course of its normal business the NDA enters into transactions with Government owned banks. In addition, the NDA has a small number of material transactions with other Government departments and other central Government Key management compensation bodies. Key management includes Executive and Non-executive directors together with those members of senior management who form part of the Executive Team. The compensation paid or payable to key management for employee services is set out Directors’ transactions below in aggregate for each of the categories specified in IAS 24 ‘Related Party Disclosures’. Further information about the During the year, no Board member, key manager or other related party has undertaken any material transactions remuneration of individual directors is provided in the audited part of the Remuneration Report on pages 86 to 91. with the NDA. 2021 2020 Related party transactions Authority £’000 £’000 During the year, Group companies entered into the following transactions with related parties: Short-term employee benefits 4,287 3,973 Post-employment benefits 382 335 Sales Purchase Amounts Amounts Other long-term benefits 1,479 1,308 of goods of goods owed by owed to Total key management compensations 6,148 5,616 to parent f rom parent related parties related parties 2021 2020 2021 2020 2021 2020 2021 2020 £m £m £m £m £m £m £m £m Sellafield Ltd (2,076) (2,076) 30 17 - - 368 352 30. Events after the reporting period Magnox Ltd (409) (285) 1 - - - 77 84 Direct Rail Services Ltd (33) (34) 1 - 7 7 - - • IAS 10 requires the NDA to disclose the date on which the accounts are authorised for issue. The Accounting Officer authorised these financial statements on 15 July 2021. The Report of the International Nuclear Services Ltd (56) (63) - 2 180 180 5 - Comptroller and Auditor General was issued on 16 July 2021 (page 114-116) NDA Properties Ltd (6) (8) - 1 39 40 - - Pacific Nuclear Transport Ltd - (3) 1 2 - - - 3 • NDA acquired the share capital of Dounreay Site Restoration Ltd effective from 1 April 2021 Rutherford Indemnity Ltd ------Radioactive Waste Management Ltd (59) (44) 3 3 - - - - • On 23 June 2021 the NDA, HM Government and EDF Energy entered into new decommissioning arrangements NDA Archives Ltd (5) (5) 2 2 - - 1 - for 7 Advanced Gas-cooled Reactor (AGR) stations in which HM Government has directed NDA to take on the (2,644) (2,518) 38 27 226 227 451 439 future ownership of the stations for decommissioning. The work will be undertaken by the NDA subsidiary Magnox Ltd

Sales of goods to related parties were made at arm’s length prices. The amounts outstanding are unsecured and will be • NDA acquired the share capital of Low Level Waste Repository Ltd effective from 12 July 2021 settled in cash. No guarantees have been given or received. No provisions have been made for doubtful debts in respect of the amounts owed by related parties.

164 165 NDA Annual Report and Accounts 2020/21 NDA Annual Report and Accounts 2020/21

The following section provides a summary as to how each of the organisations in the NDA group has performed in 2020/21. The performance of Urenco Nuclear Stewardship Ltd and Springfield Fuels Ltd is also included due to their role in decommissioning our sites at Capenhurst and Spring fields.

The following section provides a summary as to how each organisation has performed against the key activities and milestones set out in our Performance analysis 2020-23 Business Plan. The ‘golden thread’ from the NDA’s 47 Strategic Outcomes to each of these key activities and milestones is also shown.

As in previous years, a summary of the performance of the NDA group’s major projects (defined as being those very large and complex new construction projects that have received business case approval by Government) is included in Appendix B of this report.

166 167 NDA Annual Report and Accounts 2020/21 NDA Annual Report and Accounts 2020/21

Provide support to government on nuclear 2020-2023 ON new build decommissioning plans. TARGET Lead the strategic agenda across the NDA 2020-2023 ON group on equality, diversity and inclusion TARGET (ED&I), ensuring effective governance NDA Corporate Centre and provide oversight on the creation of implementation plans to achieve ED&I The NDA is a non-departmental public body created by the Energy Act 2004 to lead the clean-up and targets decommissioning work at the NDA’s 17 sites on behalf of government. NDA is sponsored and funded Embed the key tenets of the Industrial 2020-2023 ON by the Department for Business, Energy and Industrial Strategy (BEIS). Strategy, including active participation in TARGET the Nuclear Sector Deal to help achieve HMG deliverables. Key Activities Strategic Timescale 2020/21 2020/23 Comments outcome Target Target Support implementation of forthcoming 2020-2023 ON new nuclear emergency preparedness TARGET Nuclear Materials standards across the NDA group, as part of Work with government to develop a long- 20 2020-2023 ON the UK’s implementation of the Basic Safety term management solution for separated TARGET Standards Directive 2013 plutonium in the UK International support, sharing knowledge 2020-2023 ON Integrated Waste Management and expertise in decommissioning and TARGET clean-up activities Work with group businesses to explore 39 2020-2023 ON Develop strategic opportunities that 2020-2023 ON alternative disposal options for Higher TARGET optimise delivery of the mission TARGET Activity Waste

Develop a group-wide integrated waste 39 2020-2023 ON Enable the group to proactively deter, 2020-2023 ON programme to secure significant change TARGET detect, defend against, recover from and TARGET to radioactive waste management be resilient to both current and evolving programmes across the NDA group cyber threats Spent Fuels Support small and medium enterprise 2020-2023 ON organisations by increasing overall spend TARGET Manage special nuclear materials 12 2020-2023 ON with them in line with the government consolidation in agreed locations TARGET growth agenda Critical Enablers Implement our strategic people delivery 2020-2023 ON plan to enable resource planning, skills TARGET Publish a revised NDA Strategy 2020-2021 ACHIEVED development and flexibility and mobility across the group Progress spending review through to 2020-2021 ACHIEVED Lead in the area of Mental Health and 2020-2023 ON settlement Wellbeing across the NDA group and TARGET Implement accepted recommendations 2020-2021 DEFERRED Deferred as the Magnox further enhance the wellbeing community from the Magnox Inquiry and Tailored Inquiry Report was not across the group Review published until March 21 Implement new ICT infrastructure, software 2020-2023 ON and the Departmental and working practices to allow smarter, TARGET Review (formerly the flexible working across the NDA Tailored Review) is yet to be published. NDA Implement government led reforms of 2020-2023 ON will respond in a timely public sector pensions and exit caps across TARGET manner when both the NDA group reports are published and Continue collaboration with the NDA 2020-2023 ON in line with our structured group and BEIS to further develop targeted TARGET approach to overseeing opportunities for the delivery and effective and coordinating the re-use of our land and infrastructure in responses to all such support of the NDA mission and wider UK inquiries, reviews etc Industrial Strategy Work with group businesses to map the 2020-2021 ACHIEVED Regulatory controls carbon footprint and develop a road map for how we will support government’s Contribute to sustainability performance 2020-2023 ON Status subject to commitment to net-zero greenhouse gas and meet government objectives and TARGET new target setting emissions for the UK by 2050 targets from HMG under the Greening Government Commitments initiative Provide support to government on nuclear 2020-2023 ON new build decommissioning plans TARGET Continue working with regulators and 2020-2023 ON government to determine institutional TARGET controls appropriate to restoration of nuclear sites

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Performance Analysis - Site Licence Companies Performance Analysis - Site Licence Companies

Key Activities Strategic Timescale 2020/21 2020/23 Comments outcome Target Target Integrated Waste Management Sellafield Ltd The various activities across the site produce wastes in many forms. These require varying degrees of treatment and onward processing. The site continues to focus on safe, efficient management of these wastes, including: the conversion of Highly Active Liquor (HAL) into passively safe vitrified waste; the return of vitrified material overseas; and the management of on-site Sellafield Ltd is an NDA subsidiary, responsible for operating and decommissioning Europe’s largest intermediate and low level wastes. The areas of principal focus are the redundant Legacy Ponds and Silos facilities, made and most complex nuclear site. This includes cleaning up nuclear facilities and safeguarding nuclear up of the Pile Fuel Storage Pond, Pile Fuel Cladding Silo, First Generation Magnox Storage Pond and Magnox Swarf Storage fuel, materials and waste. Silo. These facilities supported the development of the nuclear programme in the UK from the early 1950s. Subsequently, they supported electricity generation from the fleet of Magnox power stations. The programmes include the removal of nuclear fuel, sludge and solid material which require the provision of equipment to retrieve the various wastes and then treat Key Activities Strategic Timescale 2020/21 2020/23 Comments and store them in passive condition. outcome Target Target This process needs to take into account the role of integrated waste management in achieving hazard reduction and long- Spent Fuels term safety, security and environmental protection requirements. All spent fuels discharged from the operating Advanced Gas-Cooled Reactor (AGR) power stations and defueling of all Magnox power stations reactors are sent to Sellafield for management. The receipt of AGR fuels will continue until the Low level waste end of the AGR electricity programme, whilst all the Magnox fuel has now been received at Sellafield. The management Continue to generate savings and 2020-2023 ON of AGR fuel under contracts with EDF Energy provides a significant income stream to NDA. 27 preserve capacity at the Low Level TARGET Spent Magnox Fuel Waste Repository by enhancing ca- pability to divert waste to LLWR and Complete Magnox 3 4 2020-2021 MISSED Magnox reprocessing delayed due reprocessing and continued inter- to COVID-19. Plan now approved the supply chain im storage in FHP for any remnant to extend Magnox reprocessing Intermediate level waste fuel from Dec-20 to Dec-21 Support the NDA’s strategy by con- 32 2020-2023 ON Spent Oxide Fuel tinuing the programmes to receive TARGET and treat waste materials from Har- Enhance capacity to receive/ 6 9 2020-2023 ON manage and interim store AGR TARGET well and AWE Aldermaston spent fuel from EDF Energy, to Support future waste treatment 32 2020-2023 ON support bulk defueling through implementing the capability TARGET Spent Exotic Fuel to actively demonstrate characterisa- tion, size reduction and decommis- sioning Continue to receive Dounreay 12 14 2020-2023 BEHIND DFR shipments continue in spent exotic fuel to be TARGET line with ongoing Magnox Support risk reduction by developing 32 2020-2023 ON reprocessed or stored, and Reprocessing. For remaining additional capability for treatment of TARGET develop alternative capability spent exotic fuels, work continues intermediate level liquid wastes and for receipt and management of on developing dry storage storage of by-products remaining spent exotic fuels from arrangements and associated Support future decommissioning 2020-2021 ACHIEVED Dounreay transport and infrastructure 32 33 through optimisation of future storage support and treatment arrangements Nuclear Materials Sellafield is the custodian of the majority of the UK’s inventory of separated plutonium which is held in safe and secure storage. Pile Fuel Storage Pond

Progress waste retrieval by having 31 2020-2023 ON Plutonium waste skips either exported or ready TARGET to export Continue the safe and secure 18 19 2020-2023 BEHIND SRP Full Business Case will be storage of plutonium by TARGET submitted for ministerial approval Demonstrate pond dewatering 31 2020-2022 ON developing the capability to mid-2021. Active commissioning capability through completion of the TARGET repack/retreat plutonium in line now forecast for September bay dewatering trials with UK policy 2028. Prior to SRP coming online current projects such as Finishing First Generation Magnox Storage Pond (FGMSP) Line 4 and Can Surveillance Support risk reduction from FGMSP 2020-2023 ON activities remain on schedule to 31 through continued removal of fuel TARGET deal with most acute plutonium and waste from the facility can inventory

Uranics Magnox Swarf Storage Silo (MSSS) Support future decommissioning by 2020-2023 22 24 ON Progress the capability required for 2020-2023 31 ON implementing plans for consolidated TARGET bulk retrievals storage of Sellafield uranics TARGET

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Performance Analysis - Site Licence Companies Performance Analysis - Site Licence Companies

Key Activities Strategic Timescale 2020/21 2020/23 Comments Key Activities Strategic Timescale 2020/21 2020/23 Comments Outcome Target Target outcome Target Target High level waste Critical Enablers Continue the Sellafield security 2020-2023 BEHIND Overall programme will not achieve Continue the programme to repatriate 38 2020-2023 BEHIND Delays to Japanese overseas-owned vitrified waste to its TARGET customers’ returns are being enhancement programme TARGET its strategic objective of realising country of origin mitigated by accelerating Initial Operating Capability for 31 other overseas returns e.g. July 2021 or the Office for Nuclear Australia customer returns Regulation Security Improvement Schedule milestone of 30 Sept Support reprocessing plant 36 2020-2023 BEHIND High level wastes plants 2021. Revised dates now proposed decommissioning by establishing TARGET continue to support revised to regulator. COVID-19 has impacted the capability and commencing Magnox reprocessing and the programme. Work to determine processing of High Active Post POCO dates with proposed the extent of the impact and reflect Operational Clean Out of solids revised baseline change this in the schedule is ongoing through the vitrification plant to ensure alignment with POCO timescales Continue with improvements to the 2020-2023 ON site utilities infrastructure and new TARGET Site Decommissioning and Remediation Steam Generating Plant Continue the programme to ensure 2020-2023 BEHIND Impacts of COVID-19 have Decommissioning and demolition the analytical services capability is TARGET delayed the design development available to support the mission of the Replacement Analytical Complete decommissioning and 42 43 2020-2022 ON demolition of the upper diffuser TARGET Project (RAP). The RAP team is section of the Windscale Pile currently considering options for Chimney Number 1 recovery Embed the key tenets of the Industrial 2020-2023 ON Establish decommissioning capability 43 2020-2021 ACHIEVED by implementing the alpha and Strategy, including the Nuclear TARGET beta gamma decommissioning Sector Deal programmes Working to embed the capability to 2020-2023 ON proactively protect, detect, respond TARGET Commence post operational clean- 2020-2021 MISSED Due to the COVID-19 impact 42 and recover against current and out (POCO) of Magnox Reprocessing on Magnox Reprocessing evolving cyber threats Plant and the agreement to extend Magnox operations until Maintain an asset management 2020-2023 ON Dec-21, commencement regime that takes into account the TARGET of POCO is assumed for impact of asset condition on meeting Jun-22 regulation Critical Enablers Regulatory Control Ensure discharges are in line with UK 2020-2023 ON A number of key enabling activities require specific focus, ranging from infrastructure refurbishment or replacement projects, discharge strategy TARGET through to key change programmes which aim to improve operational delivery and efficiency on site. Reduce environmental risk (including 2020-2023 ON Continue the Sellafield transformation 2020-2023 ON retrieval and treatment of legacy TARGET to support future business TARGET wastes, reduction of HAL stocks) requirements Develop and embed the long-term 2020-2023 ON partnership with the supply chain TARGET Progress the transformation of 2020-2023 ON project delivery on site and continue TARGET to embed the Programme and Project Partnership Support small and medium 2020-2023 BEHIND The impact of Covid-19 enterprise organisations by targeting TARGET during 20/21 has impacted overall spend with them in line with upon both the level and the government growth agenda nature of supply chain spend. With a focus on core operations in Q1 of the year, SME expenditure dropped to 29%. A SME action plan is in place to recover

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Performance Analysis - Site Licence Companies Performance Analysis - Site Licence Companies

Magnox Ltd Key Activities Strategic Timescale 2020/21 2020/23 Comments outcome Target Target Magnox is an NDA subsidiary, responsible for 12 nuclear sites across the UK: Berkeley, Bradwell, De-designate or reuse Chapelcross, Dungeness A, Harwell, Hinkley Point A, Hunterson A, Oldbury, Sizewell A, Trawsfynydd, Continue working with regulators 44 2020-2023 ON Winfrith and Wylfa. Magnox also generates electricity at the Maentwrog hydroelectric plant. to ensure appropriately scaled TARGET management arrangements and permissioning for interim states and Key Activities Strategic Timescale 2020/21 2020/23 Comments interim end states are determined and outcome Target Target agreed Develop Interim State approaches, 2020-2023 ON Integrated Waste Management 44 utilising revised management TARGET Low level waste arrangements

Delivery of the Magnox elements 26 27 2020-2023 ON Monitor management and maintenance 44 2020-2023 ON of the estate-wide low level waste TARGET arrangements for sites in Care and TARGET management plan, including di- 28 29 Maintenance version to alternative treatment Progress land de-designation and 47 2020-2023 ON Intermediate level waste release to support re-use TARGET Progress activities to retrieve, treat 2020-2023 ON 31 32 and store ILW TARGET Provide support to nuclear new build 47 2020-2023 ON TARGET 33

Continue to pursue opportunities 2020-2023 ON Critical Enablers to consolidate ILW to interim TARGET stores Support the Government in activities 2020-2023 ON to deliver the new build agenda and TARGET Nuclear Materials preparations for decommissioning the AGR fleet Uranics Continue information governance 2020-2023 ON Continue the programme for the 22 2020-2023 ON activities and supporting processes TARGET transfer of nuclear materials TARGET Continue delivery of the sift & lift 2020-2023 BEHIND Impacted by COVID-19. Regulatory permissioning in 22 2020-2023 ON programme to rationalise all Magnox TARGET NDA programme has been support of the transfer of nuclear TARGET records and transfer as appropriate to delayed and Magnox’s materials between sites NDA Archive in Wick programme reflects this Site Decommissioning and Remediation Support small and medium 2020-2023 ON enterprise organisations by targeting TARGET Decommissioning and demolition overall spend with them in line with Government growth agenda Continue estate decommissioning 2020-2023 ON Magnox strategy is moving away 42 43 ISupport NDA in property activities 2020-2023 ON and demolition activities working TARGET from interim states. This target to reduce NDA decommissioning TARGET towards interim states will need to be revisited once new liability and achieve best value on asset Lifetime Plan is developed disposal

Continue focus on the major risk 42 2020-2023 ON Continue the enhancement of cyber 2020-2023 ON of asbestos including production TARGET capability TARGET of an optimised, underpinned strategy for asbestos, without Continue delivery of the asset care 2020-2023 ON detriment to Care and programme TARGET Maintenance

Develop continuous reactor 42 2020-2023 ON decommissioning strategy TARGET

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Performance Analysis - Site Licence Companies Performance Analysis - Site Licence Companies

Berkeley Chapelcross

Key Activities Strategic Timescale 2020/21 2020/23 Comments Key Activities Strategic Timescale 2020/21 2020/23 Comments Outcome Target Target Outcome Target Target Integrated Waste Management Integrated Waste Management Intermediate leve waste Intermediate level waste

Complete Design and Build of ILW retrieval 31 2020-2023 ON Progress activities to retrieve, treat and store 32 2020-2023 ON plant TARGET ILW TARGET

Progress activities to retrieve, treat and store 2020-2023 ON 31 32 33 Complete design and build of ILW 31 32 33 2020-2023 ON ILW TARGET Encapsulation facility TARGET Continue retrieval and packaging activities in 2020-2023 ON Complete active commissioning of the 2020-2021 MISSED Impacted by 32 33 the active waste vaults TARGET Modular Active Effluent Treatment Plant COVID-19. Will be completed in Retrieve waste from shielded area (caves) 32 33 2020-2023 ON TARGET 2021/22 Operate ILW store 2020-2022 ON Complete Design and Build of ILW 32 2020-2023 MISSED Impacted by 33 encapsulation facility COVID-19. Will TARGET be completed in Site Decommissioning and Remediation 2021/22 Site Decommissioning and Remediation Decommissioning and demolition

Decommissioning and demolition Prepare for pond draining and stabilisation 42 2020-2023 ON TARGET Decommissioning (including asbestos 42 43 2020-2021 ON removal) and demolition activities ongoing TARGET Decommissioning (including asbestos 2020-2023 ON 42 43 in preparation for entry into Care and removal) and demolition activities in TARGET Maintenance preparation for entry into Care and Maintenance

Bradwell in Care and Maintenance

Key Activities Strategic Timescale 2020/21 2020/23 Comments Outcome Target Target Site Decommissioning and Remediation

De-designate and reuse

2020-2023 Ongoing management of site during 44 ON Care and Maintenance period TARGET

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Performance Analysis - Site Licence Companies Performance Analysis - Site Licence Companies

Dungeness A Harwell

Key Activities Strategic Timescale 2020/21 2020/23 Comments Key Activities Strategic Timescale 2020/21 2020/23 Comments Outcome Target Target Outcome Target Target Integrated Waste Management Nuclear Materials Low level waste Uranics

Complete active commissioning of the Mod- 32 2020-2021 MISSED Impacted by Continue the programme for the transfer of 22 2020-2023 ON ular Active Effluent Treatment Plant COVID-19. Will be nuclear materials TARGET completed in 2021- 22 Integrated Waste Management Intermediate level waste Intermediate level waste

Progress activities to retrieve, treat and store 2020-2023 ON Progress activities to retrieve, treat and store 2020-2023 BEHIND Equipment failures 31 32 33 31 32 33 ILW TARGET ILW TARGET have impacted progress through the Site Decommissioning and Remediation financial year Site Decommissioning and Remediation Decommissioning and demolition Decommissioning and demolition Decommissioning (including asbestos 42 43 2020-2023 ON removal) and demolition activities in TARGET preparation for entry into Care and Decommissioning (including asbestos 42 43 2020-2023 ON Maintenance removal) and demolition activities TARGET Continue preparations for decommissioning 2020-2023 ON Preparatory works for Safe Store Project 42 2020-2023 ON 42 TARGET of radium chemistry facilities TARGET Continue decommissioning, demolition 2020-2023 ON Complete the current asbestos removal 42 43 2020-2021 ACHIEVED 42 43 46 programme within the reactor buildings and land remediation of the Liquid Effluent TARGET Treatment Plant (LETP) De-designate or re-use

Continue incremental release of land to 47 2020-2023 ON the Harwell campus through targeted TARGET demolitions, remediation and clearance of land tracts

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Performance Analysis - Site Licence Companies Performance Analysis - Site Licence Companies

Hinkley Point A Hunterston A

Key Activities Strategic Timescale 2020/21 2020/23 Comments Key Activities Strategic Timescale 2020/21 2020/23 Comments Outcome Target Target Outcome Target Target Integrated Waste Management Integrated Waste Management Intermediate level waste Low level waste Progress activities to retrieve, treat and store 2020-2023 ON 31 32 33 Complete active commissioning of the 2020-2021 MISSED Impacted by ILW TARGET 28 Modular Active Effluent Treatment Plant COVID-19 Continue complete solid active waste 2020-2023 ON 31 Intermediate level waste bunker retrieval operations excluding post TARGET operational clean out Progress activities to retrieve, treat and store 2020-2023 ON 31 32 33 Construct and commission the solid ILW 2020-2023 ON ILW TARGET 32 encapsulation plant TARGET Complete commissioning of ILW store 32 2020-2023 ON TARGET Site Decommissioning and Remediation Decommissioning and demolition Site Decommissioning and Remediation Decommissioning (including asbestos 42 43 2020-2023 ON removal) and demolition activities in TARGET Decommissioning and demolition preparation for entry into Care and Maintenance Decommissioning (including asbestos 42 43 2020-2023 ON removal) and demolition activities in TARGET Continue preparations for demolition of the 43 2020-2023 ON preparation for entry into Care and cooling pond overbuilding TARGET Maintenance

Oldbury

Key Activities Strategic Timescale 2020/21 2020/23 Comments Outcome Target Target Integrated Waste Management Intermediate level waste

Continue ILW retrieval enabling works 31 2020-2023 ON TARGET

Progress activities supporting consolidated 33 2020-2023 ON ILW storage TARGET

Progress activities to retrieve, treat and store 31 32 33 2020-2023 ON ILW TARGET Site Decommissioning and Remediation Decommissioning and demolition

Decommissioning (including asbestos 42 43 2020-2023 ON removal) and demolition activities in TARGET preparation for entry into Care and Maintenance

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Performance Analysis - Site Licence Companies Performance Analysis - Site Licence Companies

Sizewell A Winfrith Key Activities Strategic Timescale 2020/21 2020/23 Comments Outcome Target Target Key Activities Strategic Timescale 2019/20 2020/23 Comments Outcome Target Target Integrated Waste Management Integrated Waste Management Intermediate level waste Low level waste Continue preparation for ILW retrievals 31 2020-2023 ON TARGET Continue and complete shipments of LLW 32 2020-2022 ON drums to LLWR TARGET

Progress activities to support consolidation 33 2020-2023 ON of ILW storage TARGET Site Decommissioning and Remediation

Manage receipt of waste packages at 33 2020-2023 ON Decommissioning and demolition Bradwell Site TARGET DRAGON – continue reactor 2020-2023 ON Continue ILW retrieval enabling works 2020-2023 ON 42 31 decommissioning TARGET TARGET Steam Generating Heavy Water Reactor 42 2020-2023 ON Site Decommissioning and Remediation (SGHWR) – continue decommissioning of the TARGET primary and secondary containment areas Decommissioning and demolition Decommissioning (including asbestos 42 43 2020-2023 ON removal) and demolition activities TARGET Decommissioning (including asbestos 42 43 2020-2023 ON removal) and demolition activities in TARGET preparation for entry into Care and Maintenance Wylfa Complete ponds stabilisation 42 2020-2021 MISSED Impacted by COVID-19; now likely to completed in Key Activities Strategic Timescale 2020/21 2020/23 Comments Outcome Target Target 2021-22 Integrated Waste Management

Intermediate level waste

Trawsfynydd Prepare for ILW retrievals and packaging 31 2020-2023 ON TARGET Key Activities Strategic Timescale 2020/21 2020/23 Comments Progress activities to retrieve, treat and store 31 32 33 2020-2023 ON Outcome Target Target ILW TARGET Integrated Waste Management Site Decommissioning and Remediation Intermediate level waste Decommissioning and demolition Continue and complete ILW retrievals and 31 33 2020-2023 ON encapsulation TARGET Prepare for decommissioning (including 42 43 2020-2023 ON asbestos removal) and demolition for entry TARGET Progress activities to retrieve, treat and store 2020-2023 ON into Care and Maintenance 31 32 33 ILW TARGET Continue asbestos removal from turbine hall 2020-2023 ON 42 43 Site Decommissioning and Remediation TARGET

Decommissioning and demolition

Continue development of strategy for ponds 42 2020-2023 ON end state conditions TARGET

Decommissioning (including asbestos 42 43 2020-2023 ON removal) and demolition activities in TARGET preparation for entry into Care and Maintenance

Continue height reduction preparations 43 2020-2023 ON TARGET

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Performance Analysis - Site Licence Companies Performance Analysis - Site Licence Companies Dounreay Site Low Level Waste Restoration Ltd Repository Ltd Dounreay Site Restoration Ltd (DSRL) is responsible for cleaning up and decommissioning the Dounreay site Low Level Waste Repository (LLWR) Ltd manages and operates the UK’s low level waste repository in west in the north of Scotland. It also operates a Low Level Waste (LLW) disposal facility to deal with waste from the Cumbria, providing safe, permanent disposal for a range of radioactive wastes. It’s also responsible for site. DSRL was owned by Parent Body Organisation, Cavendish Dounreay Partnership Ltd, up to 31 March 2021 delivering the UK’s national low level waste programme and associated waste management services. and became a wholly owned subsidiary of the NDA from 1 April 2021. LLWR was owned by Parent Body Organisation, Nuclear Waste Management Ltd, up to 11 July 2021 and became a wholly owned subsidiary of the NDA from 12 July 2021. Key Activities Strategic Timescale 2020/21 2020/23 Comments Outcome Target Target Key Activities Strategic Timescale 2020/21 2020/23 Comments Spent Fuels Outcome Target Target Spent exotic fuel Integrated Waste Management Low level waste Continue removal of Breeder Fuel elements 11 2020-2021 MISSED Removal of breeder from DFR fuel delayed early Deliver the national LLW 26 27 2020-2023 ON in QTR due to Programme to optimise LLW TARGET COVID-19 impacts, Strategy implementation. Work 28 29 which impacted both with consigning SLCs to improve DSRL and Sellafield waste forecast and inventory operations and continue segregated waste, Nuclear Materials treatment and disposal services Continue consolidation of remaining 2020-2023 ON Intermediate level waste - unirradiated exotics material (remnants) TARGET Work with NDA to support 2020-2023 ON 32 33 34 Integrated Waste Management innovation in approaches to waste TARGET management of IWM Low level waste Type B Packaging capability to 33 2020-2023 ON support NDA and MOD customers TARGET Continued transfer of LLW to LLW vault. 27 2020-2023 ON TARGET Site Decommissioning and Remediation Site Decommissioning and Remediation New build and operations Decommissioning and demolition Enabling works for phased 2020-2023 BEHIND Following the identification PFR – Complete removal of Alkali Metal Lab 2020-2021 MISSED Impacted by construction of the final cap for 41 TARGET of increased voidage in the 43 COVID-19 and waste trenches 1 to 7 and Vault 8 disposed waste containers in route availability. Vault 8, the options for closing Access for demolition Vault 8 have been revisited prevented by iso through the Best Available containers holding Technique (BAT) process. stored sodium Options have been identified De-designate or re-use to resolve the issues and allow capping to move forward. The NDA and Regulatory permissioning in 2020-2023 ON project team is investigating 42 support of the Interim End State definition TARGET opportunities to recover the and arrangements for Dounreay schedule. The Environment Critical Enablers Agency observed that process and remain content with the Support small and medium enterprise 2020-2023 ON progress being made towards (SME) organisations by measuring and TARGET final capping reporting overall spend with them in-line with government growth agenda

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Performance Analysis - Site Licence Companies Performance Analysis - Site Licence Companies

Key Activities Strategic Timescale 2020/21 2020/23 Comments Outcome Target Target Critical Enablers

Support hazard reduction across 2020-2023 ON the NDA group TARGET Radioactive Waste Manage and operate LLWR safely 2020-2023 ON to provide an effective UK disposal TARGET service Management Consider options to further 2020-2023 ON optimise operations at the LLWR TARGET Radioactive Waste Management (RWM) Ltd is an NDA subsidiary, responsible for delivering a geological disposal Continue to pursue overall cost 2020-2023 ON facility in the UK, on behalf of the NDA. This includes finding a suitable site with a willing community to host this savings in delivery of the Lifetime TARGET permanent and safe solution for managing radioactive waste. Plan Support small and medium 2020-2023 ON enterprise organisations by TARGET targeting overall spend with them Key Activities Strategic Timescale 2020/21 2020/23 Comments in line with the government growth Outcome Target Target agenda Integrated Waste Management Active participation in the Nuclear 2020-2023 ON Sector Deal and the North West TARGET Intermediate and high level waste Nuclear Arc to help achieve HMG Implement government policy 34 39 2020-2023 ON key deliverables on geological disposal of higher TARGET Manage the existing LLWR 2020-2023 ON activity waste

Management and Operations TARGET contract through to completion Work proactively with waste 2020-2023 ON 34 39 and transition to new ownership producers, planning for and TARGET arrangements delivering waste management solutions Deliver the LLWR Transformation 2020-2023 ON Programme and actively support TARGET Deliver a robust technical 2020-2023 ON 34 39 the development of One NDA programme, support the TARGET GDF programme and waste Regulatory control management

Contribute to sustainability 2020-2023 ON Critical Enablers performance under the Greening TARGET Develop RWM into a high 2020-2023 ON Government Commitments (GGC) performing delivery organisation TARGET Continue to work with each 2020-2023 ON community to provide information TARGET and help develop a detailed community vision Work in partnership with 2020-2023 ON communities to evaluate potential TARGET sites for a GDF Design studies for specific 2020-2023 ON sites, initial safety analyses, and TARGET environmental and economic assessments to help establish whether sites could be suitable

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Performance Analysis - Site Licence Companies Performance Analysis - Site Licence Companies International Nuclear Direct Rail Services Ltd Services Ltd Direct Rail Services (DRS) is an NDA subsidiary, providing expert and specialist nuclear transport International Nuclear Services (INS) is an NDA subsidiary, with locations in the UK, France and Japan. It provides services to support the NDA mission. A world leader in safe, secure and reliable nuclear logistics, specialist nuclear transport, design and licensing services to the NDA group, as well as to a range of domestic and DRS also has contracts with domestic customers, providing other tailored rail logistics solutions. international customers. It also operates the nuclear shipping company, Pacific Nuclear Transport Ltd, the world’s In February 2021, we brought together the extensive transport and logistics expertise of International most experienced marine transporter of specialist nuclear materials. Nuclear Services (INS), Direct Rail Services (DRS) and INS’s subsidiary Pacific Nuclear Transport Ltd In February 2021, we brought together the extensive transport and logistics expertise of International Nuclear (PNTL) into a single transport division – Nuclear Transport Solutions (NTS). Services (INS), Direct Rail Services (DRS) and INS’s subsidiary Pacific Nuclear Transport Ltd (PNTL) into a single transport division – Nuclear Transport Solutions (NTS). Key Activities Strategic Timescale 2020/21 2020/23 Comments Outcome Target Target Key Activities Strategic Timescale 2020/21 2020/23 Comments Outcome Target Target Spent Fuel Support AGR fuel movements by rail 2020-2023 ON Nuclear Materials - Plutonium and Uranics 6 for EDF from stations to Sellafield, TARGET Support the NDA’s decommissioning 17 22 2020-2023 ON including preparations for the AGR

programme by providing transport TARGET defueling programme and technical solutions for movements

of nuclear material in the UK Nuclear Materials - Plutonium and Uranics

Integrated Waste Management - High Level Waste Support national nuclear material rail 17 22 2020-2023 ON movements for Harwell, Winfrith and TARGET Continue to deliver important 36 37 2020-2023 ON DSRL international transports of vitrified High TARGET Delivery of the rail transport element in 2020-2023 ON Level Waste (HLW) and conditioned 12 17 Intermediate Level Waste (ILW) support of the Exotics programme TARGET Critical Enablers Critical Enablers Continue to deliver important 2020-2023 ON Provide assistance in the development 2020-2023 ON international transports of spent mixed TARGET of the NDA transport and logistics TARGET oxide (MOX) fuel strategy Seek opportunities for new UK and 2020-2023 ON Support the discharge of NDA 2020-2023 ON international business within nuclear TARGET obligations with respect to MOD TARGET shipping, packaging and design and nuclear rail transportation establish a consultancy that provides Provide value for money to the 2020-2023 BEHIND Non-nuclear revenue transport enabling solutions to UK taxpayer through the execution TARGET growth for the year was and international markets of identified non-nuclear work £1.7m, just below the Maintain a leading fleet of specialist 2020-2023 ON that complements the skills and £2m- £2.5m target, due nuclear transport vessels and TARGET capabilities required to support the primarily to COVID-19. crews that, by undertaking regular core nuclear mission Efforts will continue shipments, meets the highest to deliver non-nuclear standards of quality, safety and revenue as opportunities security arise Continue to develop a strategic 2020-2023 ON Provide rail authority and other 2020-2023 ON partnership with Direct Rail Services TARGET associated expertise to the NDA in TARGET including the creation of a joint considering areas of synergy between consultancy offering that combines DRS and INS in support of the NDA’s the nuclear transport capabilities of strategic transport capability both organisations Operate and maintain technology 2020-2023 ON Implement a series of transformation 2020-2023 ON leading fleet of locomotives to support TARGET activities that make INS more TARGET Attract and retain the necessary skills, 2020-2023 ON competitive, innovative and efficient capability and diversity of talent to TARGET whilst ensuring it has the right skills, deliver our rail logistics business in a capability and diversity of talent to safe, secure and reliable manner deliver in a safe, secure and reliable manner

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Performance Analysis - Other businesses that support the NDA mission Performance Analysis - Other businesses that support the NDA mission

NDA Archives Ltd Rutherford Indemnity Ltd

NDA Archives is an NDA subsidiary, responsible for the Nucleus (the Nuclear and Caithness Archives). The Rutherford Indemnity Ltd provides insurance cover for the NDA group. It has a particular focus on nuclear facility is operated by a commercial partner and provides long-term records management and archiving liability cover and the provision of support for changes to insurance requirements. The company is a services for the NDA group. wholly-owned NDA subsidiary, managed for the NDA by Marsh Captive Management Services, and has no direct employees.

Key Activities Strategic Timescale 2020/21 2020/23 Comments Key Activities Strategic Timescale 2020/21 2020/23 Comments Outcome Target Target Outcome Target Target Critical Enablers Critical Enablers Mature and implement the NDA Group 2020-2021 ACHIEVED Heritage now captured Develop and implement comprehensive 2020-2021 DEFERRED Solution is dependent Heritage Strategy in NDA Strategy 4. NDA major incident claims management upon a Third-Party Heritage guidelines solution Administrator being submitted to SLC’s for appointed (See below) enactment via NDA Procure Third Party Administrator to 2020-2021 DEFERRED No bids were received Archives Ltd implement NDA-controlled nuclear for the Third-Party Develop NDA Group Digital 2020-2021 MISSED Vision and strategies liability claims handling administration Administrator tender. Preservation and Digitisation produced in draft. Digital Feedback from suppliers strategies and policies Preservation Coalition are is being collated to inform advising on standards. the re-scope for retender This needs to align with in 2021/22. NDA Group Digital Vision Work is ongoing to and Strategy which will be determine a more developed in 2021/22 bespoke solution than Development of the Hub and Spokes 2020-2021 ACHIEVED Development complete was anticipated at the delivery model – centralised inventory with spoke locations outset and management with dispersed, off- identified. Film collection Provide optimal insurance coverage 2020-2023 ON site storage accessioned and under to the NDA to support its NDA group- TARGET Nucleus control. Future wide insurance programme and exploit addition of other spokes opportunities to reduce overall cost of and development of insurance risk management system Explore all avenues to develop 2020-2023 ON planned potential innovative solutions to the TARGET Accession the outputs from the 2020-2023 BEHIND Magnox Sift & Lift in flight increased financial security or insurance Sellafield and Magnox sift and lift TARGET and on target. requirement resulting from the Nuclear projects Sellafield Sift & Lift Installations (Liability For Damage) Order underway and plans 2016 and to respond to demands for indicate completion 2025. new or additional policy or cover Sellafield Appleton store Continue to deliver the target return 2020-2023 ON will be empty by Mar-23 on the investment portfolio, protecting TARGET Rutherford’s ability to offer insurance Capacity management planning 2020-2023 ON on a cost effective basis, maintaining TARGET liquidity in order to be able to respond promptly to a major loss Continue to use a prudent proportion 2020-2023 ON of Rutherford’s assets to support TARGET infrastructure investment within the NDA group Assist with the NDA group insurance 2020-2023 ON broker tender to ensure all outsourced TARGET activities improve efficiency and are aligned to support NDA group Insurance Strategy

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Performance Analysis - Other businesses that support the NDA mission Performance Analysis - Other businesses that support the NDA mission

NDA Properties Energus

NDA Properties Ltd is an NDA subsidiary, holding and managing the majority of the non-nuclear property Energus is an NDA subsidiary offering a range of training, education and business support services geared assets within the NDA group. towards providing and enhancing skills within both the local and national nuclear workforce.

Key Activities Strategic Timescale 2020/21 2020/23 Comments Key Activities Strategic Timescale 2020/21 2020/23 Comments Outcome Target Target Outcome Target Target Critical Enablers Critical Enablers Effective management of Landlord’s 2020-2021 DEFERRED Deferred due to Continue to work closely with the NDA 2020-2023 ON Essential works Programme, including impact of COVID-19. and stakeholders across the nuclear TARGET property portfolio projects for repair Refurbishments and sector to upskill and develop the work and improved environmental demolitions underway in workforce of today and tomorrow stewardship 2021/22 Continue to manage and facilitate a 2020-2023 ON Effective management of Hinton 2020-2021 DEFERRED On hold until future office number of training opportunities for TARGET House including collaborative strategy (post COVID-19) the NDA group and wider nuclear partnership working with Sellafield Ltd is known sector; including nucleargraduates, to align with the award on the next cyber security graduates and generation Facilities Management apprentices and other bespoke contract programmes to support the NDA Proactively dispose/release surplus 2020-2022 ON People Strategy assets no longer required by the NDA TARGET Continue to work in partnership with 2020-2023 ON Group or wider parts of government, the National Cyber Security Centre TARGET including those that have high socio- (NCSC) and NDA Cyber Security economic value Resilience (CSRP) to deliver a pipeline Effective and efficient management 2020-2023 ON of cyber security young talent into the and assurance of retained landholding TARGET sector. Deliver CyberFirst and be the consisting of 1203 hectares and in venue of choice for Cyber Security excess of 100 properties training in the North West Continue to be a Cumbrian venue of 2020-2023 ON Transfer land and property back to 2020-2023 DEFERRED Deferred pending NDA choice for the NDA group’s events, TARGET NDA where it is established the land is Properties Ltd strategy conferences and delivery of training required for operational purposes review and education.

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Performance Analysis - Other businesses that support the NDA mission Performance Analysis - Other businesses that support the NDA mission

Springfields Fuels Ltd Capenhurst

Owned by Westinghouse Electric UK Holdings Limited Owned by: URENCO Springfields is a nuclear fuel manufacturing site and is located near Preston in Lancashire. The site is The NDA Capenhurst site is located near Ellesmere Port in Cheshire. operated by Springfields Fuels Ltd (SFL) and isused to manufacture a range of fuel products for UK and international customers, the processing of historic uranic residues and decommissioning of redundant In 2012, the site was transferred to URENCO, owners of the adjacent licensed site, and was amalgamated facilities. into a single nuclear licensed site. As part of this transfer, URENCO established Urenco Nuclear Stewardship (UNS), formerly known as Capenhurst Nuclear Services, to provide responsible management From April 2010, the NDA permanently transferred ownership of the company to Westinghouse Electric of uranic materials and carry out remediation work on behalf of the NDA. including the freedom to invest for the future under the terms of a new 150-year lease. SFL is contracted to provide decommissioning and clean-up services to the NDA to address historic liabilities. UNS manages a large proportion of the NDA’s uranic inventory and also provides broader decommissioning and demolition works for redundant facilities, in order to reduce liability and optimise space utilisation on site.

Key Activities Strategic Timescale 2020/21 2020/23 Comments Key Activities Strategic Timescale 2020/21 2020/23 Comments Outcome Target Target Outcome Target Target Site Decommissioning and Remediation Site Decommissioning and Remediation

Deommissioning and demolition Deommissioning and demolition

Complete post operational clean 2020-2022 BEHIND A delay to the Service Island Continue decommissioning and 42 43 2020-2023 ON out of the Residues Recovery 42 TARGET project at Springfields during demolition of key facilities TARGET Plant 2020 means that this target is Nuclear Materials forecast to complete during 2022/23 Continue receipt and safe storage of 24 2020-2023 ON Continue decommissioning of the 42 2020-2022 BEHIND A delay to the Service Island uranic materials TARGET Magnox Island TARGET project at Springfields during Continue the safe storage and 2020-2023 ON 2020 means that this target is 24 management of uranic materials, TARGET forecast to complete during including uranium hexafluoride tails 2022/23 prior to processing through the Tails Management Facility

David Peattie Accounting Officer and Group Chief Executive Officer 15 July 2021

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Glossary and abbreviations Glossary and abbreviations

Care and Maintenance When a Magnox reactor site NDA Authority This is used to describe A&RAC Audit and Risk Assurance Committee NTS Nuclear Transport Solutions is kept in a state of Care the Non-Departmental and Maintenance, it is made Public Body created under AGR Advanced Gas-cooled Reactor OHI Organisational Health Index safe for a planned period the Energy Act and the BEIS Department for Business Energy ONR Office for Nuclear Regulation of quiescence, after which performance of which is and Industrial Strategy OpCo Operating Company decommissioning activities reported in this document. will commence. BEP Box Encapsulation Plant P&PC Programmes and Projects Committee C&AG Comptroller and Auditor General PAC Public Accounts Committee End State Condition of a nuclear NDA Estate The businesses that support site (including the land, the NDA mission – Sellafield, CETV Cash Equivalent Transfer Value PBO Parent Body Organisation structures and infrastructure) Magnox, Dounreay, LLWR, CEO Chief Executive Officer PCSPS Principal Civil Service Pension Scheme following completion of DRS, INS, RWM, NDA CFO Chief Financial Officer PFCS Pile Fuel Cladding Silo decommissioning and Archives, NDA Properties, clean-up activities, and any Rutherford Indemnity, CPS Combined Pension Scheme PFSP Pile Fuel Storage Pond controls to be applied during Energus, Springfield’s Fuels DRS Direct Rail Services Ltd PNTL Pacific Nuclear Transport Ltd its subsequent use. Ltd and URENCO Nuclear DSRL Dounreay Site Restoration Ltd PPP Programme and Projects Partners Stewardship Ltd. EA Environment Agency R&D Research and Development Interim State An interim state describes NDA Group This is the group of the condition of a site or businesses included in the EAP Employee Assistance Programme REMCO Remuneration Committee facility (including land) at statutory accounts. These ED&I Equality, Diversity and Inclusion RIDDOR Reporting of Injuries, Diseases and specific points en-route to are NDA, Sellafield, Magnox, FGMSP First Generation Magnox Storage Pond Dangerous Occurrences Regulations the site end state. It is a INS (including subsidiaries GDF Geological Disposal Facility RWM Radioactive Waste Management Ltd natural milestone or decision PNTL, INS Japan, INS point in the decommissioning France SAS), DRS, RWM, GLT Group Leadership Team SEP Silo Emptying Plant and remediation programme NDA Archives, NDA GSR Group Strategic Risks SEPA Scottish Environment Protection Agency that typically represents a Properties and Rutherford HAL Highly Active Liquor SFL Springfields Fuels Ltd significant reduction in risk Indemnity. DSRL and LLWR or hazard. An interim state will also be consolidated in HLW High Level Waste SGHWR Steam Generating Heavy Water Reactor does not automatically infer a to the statutory accounts in HMG Her Majesty’s Government SIRO Senior Information Risk Owner period of quiescence; it can 2021/22. HSE Health and Safety Executive SLC Site Licence Company be followed by continuous or deferred decommissioning. HSSE Health, Safety, Security and Environment SME Small and Medium-sized Enterprises Committee STEM Science, Technology, Engineering and Interim End State An interim end state is a One NDA A way of working more specific type of interim effectively and efficiently to IAS International Accounting Standards Mathematics state. It marks the end of maximise the opportunities ICT Information Communications Technology STIP Short-Term Incentive Plan all physical works. No more within the group of IFF Integrated Financial Framework THORP Thermal Oxide Reprocessing Plant active remediation will take businesses. place to achieve the site end IFRS International Financial Reporting Standards TRIR Total Recordable Incident Rate state, i.e. further remediation ILW Intermediate Level Waste UKGI UK Government Investments will be passive for example INES International Nuclear and as a consequence of radioactive decay or natural Radiological Event Scale attenuation of contamination. INS International Nuclear Services Ltd IWM Integrated Waste Management JCG Joint Consultation Group LLW Low Level Waste LLWR Low Level Waste Repository Ltd LTIP Long-Term Incentive Plan M&A Mergers and Acquisitions 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 NOMCO Nominations Committee

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Useful links and documentation Contact Details

NDA Headquarters Dounreay Office • Nuclear Decommissioning Authority Herdus House D2003 – Zone 8 Westlakes Science Dounreay (https://www.gov.uk/government/organisations/nuclear-decommissioning-authority) & Technology Park Thurso • Department for Business, Energy and Industrial Strategy Moor Row Caithness Cumbria KW14 7TZ (https://www.gov.uk/government/organisations/department-for-business-energy-and-industrial-strategy) CA24 3HU • Sellafield Ltd (www.gov.uk/government/organisations/sellafield-ltd) Contact: +44 (0)1925 802001 Cockermouth Hub Visit: www.gov.uk/nda Unit 5, • Magnox Ltd (www.gov.uk/government/organisations/magnox-ltd) Lakeland Business Park, • LLWR Ltd (www.gov.uk/government/organisations/low-level-waste-repository-ltd) London Office Cockermouth, 10 Victoria Street CA13 0QT. • Dounreay Ltd (www.gov.uk/government/organisations/dounreay) Westminster London Department of Business, • Capenhurst Nuclear Services Ltd (https://www.urenco.com/) SW1H 0NN Energy and Industrial Strategy • Springfields Fuels Ltd (https://www.westinghousenuclear.com/) 1 Victoria Street Harwell Office London • Radioactive Waste Management Ltd Nuclear Decommissioning Authority SW1H 0ET (https://www.gov.uk/government/organisations/radioactive-waste-management) Building 329 West Thomson Avenue Principal Bankers • Nuclear Transport Solutions (https://nucleartransportsolutions.com/) Harwell Campus Government Banking Service OX11 0GD Wellesey Grove Croydon CR9 1WW Useful documentation Warrington Office Hinton House Auditor Birchwood Park Avenue The Comptroller and Auditor General • NDA Strategy - March 2021 (www.gov.uk/nda) Risley National Audit Office Warrington 157-197 Buckingham Palace Road • NDA Business Plan 2020 to 2023 and NDA Business Plan 2021 to 2024 (www.gov.uk/nda) WA3 6GR Victoria London • NDA Mid-Year Performance Report 2020 to 2021 (www.gov.uk/nda) SW1W 9SP • NDA Research and Development 5 year plan: 2019 to 2024 (www.gov.uk/nda) • NDA Direct Research Portfolio (DRP) Projects: Quarterly Update – Oct 2019 (www.gov.uk/nda) • Nuclear Decommissioning: attracting and retaining skills (brochure) Nov 2016 (www.gov.uk/nda ) • NDA Corporate Centre: gender pay gap report, 2020 (www.gov.uk/nda) • Register of Director’s Interests and associated procedure (www.gov.uk/nda) • NDA sustainability report April 2020 to March 2021: (www.gov.uk/nda)

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Appendix A - NDA Group - Summary Appendix B - Major Projects Cost of events confirmed as INES1 or and Schedule

Major projects are defined as those projects with a lifetime cost of £100m or more with a business case approved by Government. The historic cost estimates in the table below are expressed in money values of the year in which the estimate higher during 2020/21 was prepared (i.e. have not subsequently been adjusted for inflation).

Project/ Year Estimated Current Estimated Estimated Estimated Current Estimated 2019/20 Programme initiat- cost at business cost Mar cost end date at business end date estimated ed initiation case cost 2020(£m) Mar 2020 initiation case end Mar 2020 Schedule Site Event Description Final rating and duty holders comments on the event (£m) (£m) (£m)Variance date Variance INES 2 events First Generation Magnox 2004 229.0 400.0 340.0 0.6 Dec 2012 Mar 2020 May 2020 +11 mths Sellafield Ltd Leak from Magnox Swarf Storage Silo at Liquor level monitoring indicated a leak from the Magnox Swarf Storage Pond the Sellafield site. Storage Silo which culminated in contamination within the facility (FGMSP) - and the land and associated groundwater underneath the facility. Bulk Sludge and NB This event began in 2019 and was Fuel Retrievals reported in that year, however the leak is This incident was rated as an INES Level 2. Key reasons for changes to cost and/or end date from year initiated to March 2020 continuing, and it is considered appropri- Increases in cost and schedule compared to initiation were associated with the complexity of installing new equipment into an existing radio- ate to report as an ongoing, not new, INES actively contaminated and sensitive nuclear facility as well as project performance issues. level 2 in this year. There has been a £0.6m cost variance in year due to delays associated with plant failure with respect to the D Bay component of the scope and subsequent repair. This has also extended the project completion forecast. As of end of March 21 all project scope has been delivered and project is being closed out INES 1 events Magnox Swarf - - 846.0 911.5 33.1 - Sept 2023 Jan 2026 +13 mths Sellafield Ltd Leak from a pipe in the Magnox reprocess- A uranyl nitrate leak from a corrosion crack in a pipe led to a small Storage Silo ing facility at the Sellafield site. loss of radioactive liquid from an overhead pipe onto ground which (MSSS) - SEP was subsequently remediated. No persons were affected and Solid Waste Storage there was no immediate safety consequence. Retrievals The incident was rated as INES Level 1 Key reasons for changes to cost and/or end date from year initiated to March 2020 Key reasons for changes to cost and/or end date from year initiated to March 2021 In year cost and schedule increases have resulted from delivery issues and delays primarily with SEP 2 commissioning. Currently the start of retrieval operations are expected to commence Q4 FY 21/22 but there are risks to this associated with completing remaining scope and regulatory permissions. Cost increases and schedule movements are also as a result of the COVID-19 pandemic and the complex working arrangements around the facility which will only become more complex once retrievals operations commence. The understanding of this and the learning from SEP 2 commissioning has been factored into the forward plan for SEP 1 and SEP 3. Start of retrievals using SEP 3 is also contingent on BEP availability, the delivery of which has slipped to May 2026 and is driving out the end date for this project. .

Process notes Magnox Swarf 2014 615.0 887.0 1327.0 339.9 Jan 2021 Jun 2023 May 2026 +42 mths • It is the site licence company’s duty to report and investigate events on the site, to take action to control risks, and prevent recur- Storage Silo rence. However, the NDA takes the safety of people working with radiation seriously and we have, working with the site licence (MSSS) - Box Encapsulation companies concerned, reviewed all of the above. We were content that site licence companies had carried out a proper investi- Plant gation and learned from what happened. • The International Nuclear and Radiological Event Scale (INES) is a tool for communicating the safety significance of nuclear and Key reasons for changes to cost and/or end date from year initiated to March 2020 Variances in the early stages of the project concerned changes in scope and design along with different commercial arrangements than had radiological events to the public. Events are rated at seven levels. A level 1 INES event is rated as an anomaly. been originally envisaged. The current scope also reflects changes associated with the Alternative Intermediate Level Waste Strategy. The • Events are given a provisional INES rating by the site licence company BEP project has experienced significant delivery issues subsequently, with cost and schedule now forecast to exceed business case approv- • The provisionally rated event is referred to the National Officer (an ONR Inspector), who decides the final rating reported to IAEA als. The output of the Tiger Team work has been incorporated into the forward delivery plan for BEP and the creation of a single integrated • The latest information on INES events can be found at https://www-news.iaea.org/ delivery team. Increases in cost and schedule reflect the outcome of the work to revise the delivery strategy and the impact of theCOVID -19 pandemic. Executive Steering Group overseeing the recovery of this project chaired by the Sellafield CEO. Pile Fuel 2005 495 601 474.1 0.3 Oct 2019 Apr 2021 Mar 2021 +7mths Cladding Silo (PFCS) - Early retrievals project Key reasons for changes to cost and/or end date from year initiated to March 2020 Variances to the forecast at initiation followed a review of the proposed solution in 2013. This resulted in a revised approach which required the redesign of the waste retrievals and handling equipment, increasing the cost and schedule. The revised business case, approved by Government in September 2016, provided an updated cost and schedule reflecting the new approach. The business case highlighted 3 key opportunities to improve the project cost and schedule, around simplification of the retrievals, waste handling and control equipment. Work has continued to realise these opportunities, reflected in the cost and schedule estimates being well within business case approvals. In-year cost and schedule increases have been the result of delays in completing the last remaining scope element of the project associated with the internal transfer flasks following the manufacturer going into receivership. This scope is now complete, and the project is being closed down.

200 201 NDA Annual Report and Accounts 2020/21 NDA Annual Report and Accounts 2020/21 Appendix B - Major Projects Cost and Schedule Project/ Year Estimated Current Estimated Estimated Estimated Current Estimated 2019/20 Programme initiated cost at business cost Mar cost end date at business end date estimated initiation case cost 2020(£m) Mar 2020 initiation case end Mar 2020 Schedule (£m) (£m) (£m)Variance date Variance Pile Fuel Cladding Silo 2006 119.0 445.0 454.5 54.5 Jan 2019 Jul 2022 May 2023 +23 mths (PFCS) Box Encapsulation Plant Product Store – Direct Import Facility Key reasons for changes to cost and/or end date from year initiated to March 2021 A revised Business Case reflecting cost and schedule increases was approved by HMG during the 2018/19 financial year. Delays to the com- pletion of detailed design scope led to increased design and supervision costs, delaying procurements and creating inefficiency in construction activities on site. Sellafield Ltd took full control of the project in Q1 financial year 2019/20 and following further performance issues with the pipework subcontractor the contract with them was terminated and the remaining mechanical and electrical installation activities were consol- idated under a single contractor to address performance issues. However, as a result of this and the impact of the COVID-19 pandemic the project had to be re-sanctioned in September 21. Given that the true impact of the pandemic was not understood at this time only the impact of the pipework delays were included in the sanction. The variance between the approved business case and current stated outturns is due to COVID-19 impacts and the project is delivering in line with its COVID-19 impacted cost and schedule. SIXEP 2014 394 730 602.3 28.1 Nov 2026 Oct 2030 Jan 2029 +5 mths Contingency Plant

Key reasons for changes to cost and/or end date from year initiated to March 2020 At initiation in April 2014 the project estimate was based on a volumetric estimate. As the project has matured through concept (Apr 2015) and preliminary design (July 2016) stages the increased scope definition enabled a more accurate and definitive estimate to be developed based on measured quantities. Since March 2020 the project has progressed to schedule on site construction activities, however these activities have been offset by COVID-19 delays on valve prototype development which is on critical path. This delay has resulted in a 5 month schedule variance and associated cost of £28.1m. The project is currently preparing its Full Business Case for HMG approval in Q1 2022. This project has been added to the GMPP in Q3 and associated reporting is in place. Sellafield 2019 885 885 1142.3 364.6 Mar 2028 Mar 2028 Feb 2029 +21 mths Product and Residue Store Retreatment Plant Key reasons for changes to cost and/or end date from year initiated to March 2021 The project has been preparing its Full Business Case during 2020/2021. The development of the case has been informed by more robust market informed data and assurance of the forward schedule by the Programme and Project Partners (PPP). Development of the FBC has resulted in a significant cost and schedule variance form the March 2020 position. This cost and schedule increase has been heavily assured and benchmarked, and is captured within the FBC, which is seeking ministerial approval in July 2021. The estimate is in line with current Refer- ence Class forecasts. On site construction activities have progressed, delivering in line with its COVID-19 impacted cost and schedule. Design delays, due to COVID-19 restricted working arrangements have also impacted on the forward schedule. This project has been added to the GMPP in Q3 and associated reporting is in place. Electrical 2018 238 238 325.3 93.1 Mar 2023 Mar 2023 Nov 2026 +16mths Supply New Construction

Key reasons for changes to cost and/or end date from year initiated to March 2021 Cost and schedule variance is due to immature scope and design in the original business case leading to an understatement of cost and schedule. The current project forecast has been aligned to the estimates & schedule assured via the Sellafield Ltd SPER in Dec 2020, this takes into account the impacts of COVID-19 as well as the improved scope and design definition. Project to submit FBC in October 21. Replacement 2018 800 800 659.3 33.3 Feb 2029 Feb 2029 Apr 2028 +3mths Analytical Project

Key reasons for change to cost and/or end date from year initiated to March 2019 NEW: The Outline Business Case was approved by HMG in January 2020. Cost & schedule increases associated with COVID-19 impact (£23m) and annual indexation. Project delivery continues in line with COVID-19 forecasts, however, there have been some notable delays - preliminary design completions target of March 21 is further delayed due to ongoing working inefficiencies and critical design resource issues. Detailed Design completions for Analytical Equipment Development Modifier are at risk affecting Contract Awards. Delays to the critical path are being analysed with plans for recovery also in development. Following a ‘Cold Eyes Review’ of the project, plans have been developed to address some of the project shortcomings with additional resources being provided by the PPP partnership including a new Head of Projects. This project has been added to the GMPP in Q3 and associated reporting is in place.

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