Select Committee on Trade and Industry Third Special Report


The work of the Committee in the 1997 Parliament

With regard to the First Report on the Work of the Committee in the 1997 Parliament published on 9th January, we welcome the positive remarks you have made on the relationship between the Department and the Committee particularly connected to the timeliness and quality of our replies to your reports. We believe that a good relationship has developed between the Committee and the Department during the current Parliament and that this has given added value to the development of policies for which the Department is responsible. You have commented on the lateness of replies to two of your questions on the supplementary estimates - one concerning Horizon and the other Dounreay. In the case of Dounreay you were also concerned about the quality of our reply. In most instances we have responded quickly to questions on the supplementaries but we agree that it is vital that explanations should be provided to the Committee as promptly as possible in all cases.

On Dounreay, the Department's original baseline allocation of £90m in respect of the decommissioning programme there, and the figures for individual projects making up this aggregate figure, were prepared following the 1998 Comprehensive Spending Review, and before the conclusions of the 1998 HSE/SEPA Dounreay Safety Audit. These figures are reflected in the information provided by the Department to the Committee in December last year.

When the Department's Main Estimate for this financial year was presented it was recognised that additional funding was likely to be required to meet the recommendations of the Safety Audit. We provided the Committee with a provisional estimate of the additional funds likely to be required to meet the recommendations of the Audit in February 2000 (Annex 1). More robust estimates of the overall increase in the costs became available in September 2000 with the publication of the Dounreay Site Restoration Plan, and we were then able to provide the Committee with a detailed estimate.

The Department is mindful of the need to reply promptly to the Committee and is reviewing its financial control system monitoring expenditure by the UKAEA. This should help ensure that we are able to respond promptly to any enquiries made by the Committee in future.


DTI response to the Trade and Industry Committee's request for further information following the Secretary of State's Appearance before the Committee on 15 February 2000.


The second issue on which our Secretary of State gave the Committee an undertaking to provide further information related to the estimated cost of the site restoration plan for Dounreay. UKAEA has yet to produce its final version of the plan to respond to the safety audit published by the NII and SEPA in 1998. The audit recognised that the production of an integrated plan for decommissioning the Dounreay site was a complex exercise, and UKAEA committed that this should be available by September 2000. I understand that it is on schedule.

The funding requirement for Dounreay will not be clear until that plan is available and agreed as the basis for the future management of the site. However, preliminary indications, which I would be grateful if the Committee could regard as confidential, are that Dounreay will require between [***] in additional public funds for each of the next four years. This reflects the extended closure of the Fuel Cycle Area, as well as plans to bring forward some major environmental, decommissioning and waste management projects at the site such as emptying of the Shaft. At present the best estimate of the total cost of decommissioning Dounreay is £1.3 billion (discounted), although this figure does not fully reflect the cost of responding to the audit. I will write to the Committee again on this point in May when I expect to have better estimate from the UKAEA of the total cost of decommissioning Dounreay.

These figures include an allowance for replacing the D1206 dissolver. However, a decision on whether this, or an alternative means of treating the fuel is to be followed, will only be taken once we have had the opportunity to consult on the options. (The D1204 plant will not undertake any further reprocessing work and plans are being prepared for its decommissioning.)

Note: *** = the figures supplied are in confidence to the Committee and are not published.

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