Some of the deepest cuts in public spending in decades have been announced in the UK. However, funding for the nuclear industry has essentially been unaffected by the austerity with spending on decommissioning activities remaining close to current levels.
There will be an average 19% cut to departmental budgets, chancellor George Osborne revealed as he announced the government's four-year spending review to parliament. Each government department will next month publish a business plan setting out reform plans for the next four years. Osborne told parliament that the spending review has been based on "fairness, reform and growth."
While areas such as defence and welfare were particularly hit, the UK's nuclear industry escaped relatively unscathed. The government has maintained that it will not provide subsidies for nuclear new build projects, but the decommissioning sector is primarily publicly-funded.
The Nuclear Decommissioning Authority (NDA) - established in 2005 - was set up and funded under the 2004 Energy Act. It is charged with cleaning up the UK's legacy of nuclear wastes on 20 sites including 39 reactors, five fuel reprocessing plants as well as other fuel cycle and research facilities. The NDA has estimated nuclear liabilities of some £76.5 billion ($120 billion). About half its budget comes from government grant, with the rest also from government roughly in line with income from commercial activities at NDA facilities.
The review states that the Department of Energy and Climate Change (DECC) - whose annual budget will be cut by 5% - will "continue to manage Britain's historic energy liabilities, including capital funding for the Nuclear Decommissioning Authority (NDA). Spending on the highest hazards at sites such as Sellafield has been protected."
It added, "As the NDA's commercial income is forecast to reduce, government spending on energy liabilities will increase over the spending review period. However, the NDA will undertake a significant program of reform to achieve savings and to become more efficient and effective."
The NDA welcomed the funding settlement, saying: "Together with our projected commercial income, the settlement will ensure that total expenditure by the NDA will be maintained at current levels of around £3 billion ($5 billion) a year."
NDA CEO Tony Fountain commented, "I welcome the funding settlement announced today as it recognises the importance the government allocates to the decommissioning agenda. We will be able to fund a very significant, targeted, program of work to manage the UK's nuclear legacy." He added, "Clearly, our funding is not unlimited and we will need to look at how we prioritise our expenditure."
In a statement, the UK's Nuclear Industry Association (NIA) said: "We are pleased that the government has recognised that the NDA's existing work programmes will provide the best possible value for money for the UK taxpayer."
The NIA added, "The industry is in no doubt that only the most efficient and effective use of public funds is acceptable, in what is one of Europe's biggest environmental remediation and industrial programs."
Researched and written
by World Nuclear News