A report out today by the NAO shows that the Nuclear Decommissioning Authority (NDA) has made progress but will need to tackle significant challenges if it is to ensure a step change in the decommissioning of nuclear facilities in the UK.

According to the report, estimated costs of decommissioning continue to rise rapidly, even for the most imminent work which might have been expected to have stabilised by now. Progress at some decommissioning sites has been hampered by changes at short notice to funds available, bringing uncertainty for sites and lessening value for money.

The report found that the nature and scale of the decommissioning task inherited by the Authority in 2005 was highly uncertain. Many of the NDA's sites had not been designed with decommissioning in mind. And record-keeping, particularly in the early days of nuclear development, had not always been sufficiently detailed to inform decommissioning several decades later. The Authority has invested significant effort in defining what needs to be done and has introduced industry-wide procedures requiring its sites to prepare plans on a consistent basis.

Plans for decommissioning individual sites have gone through a number of iterations and cost estimates have increased significantly. In part, this reflects a more complete assessment of the range of work that needs to be taken forward. In 2007 the Authority estimated that the undiscounted cost of decommissioning its 19 sites over a 100 year period was £61 billion and that it would cost a further £12bn to run operating sites to the end of their commercial life.

This total lifetime cost of £73bn was almost £12bn (18%) higher than the 2005 estimate.

Among its recommendations, the NAO says that the NDA should determine the reasons for the continuing increases in cost estimates submitted by the sites, particularly on those elements of work which, by now, should have been reliably costed.

In the absence of stable cost estimates, the NDA must consider how it will compare the likely cost outcomes of bidders’ proposals in the forthcoming competitions. It must also consider how, after contracts have been let, it can subsequently lock the appointed parent bodies into price and incentive regimes which provide the taxpayer with good value.