AWE renationalisation "is not a magic bullet"
Posted: 9th November 2020
The renationalisation of the Atomic Weapons Establishment (AWE), announced last week by the government,[1] will not solve the problems which have dogged the nuclear weapons manufacturing facility, warned the Nuclear Information Service (NIS), an NGO which monitors developments in the UK nuclear weapons programme.[2]
AWE was privatised in the early 1990s and the contract with the consortium currently running the site was due to run until 2025.[3] From 31st June 2021 AWE will be run by an arms-length body wholly owned by the Ministry of Defence.[4] Terminating the contract early may require a penalty fee to be paid to the consortium by the taxpayer. The cost of breaking the contract has not been disclosed by the government.
AWE’s largest site at Aldermaston has been under enhanced regulatory attention from Office for Nuclear Regulation (ONR) since 2013, a situation that was originally only expected to last for two years. In March 2019 ONR concluded that AWE had not made sufficient progress for a planned inspection that would have paved the way for the two sites to move back into standard regulatory attention.
The current management of AWE have also been widely criticised for mismanagement of their infrastructure upgrade programme, most notably the MENSA warhead assembly facility which is six years behind schedule and expected to cost more than twice its original budget.[5] In September ONR announced their intention to prosecute AWE over a breach of workplace safety law. This follows a successful prosecution in November 2018 where AWE were fined £1 million over a similar incident. [6]
“Renationalisation of AWE is not a magic bullet” said David Cullen, Director of NIS. “AWE is on its third chief executive since 2016. It’s hard to see what more changes to the management or ownership structure of the organisation will achieve without a wholesale commitment to a culture of transparency and accountability. Even if renationalisation means we see less taxpayers’ money being syphoned off as corporate profit, the MOD’s record as a customer, overseeing the problems at AWE for so long, suggests they have no interest in making these changes.”
ENDS
Notes for Editors
[1] https://www.gov.uk/government/news/atomic-weapons-establishment-awe-written-ministerial-statement
[2] The Nuclear Information Service (NIS) is an independent, not-for-profit research organisation that investigates the UK nuclear weapons programme and publishes accurate and reliable information to stimulate informed debate on disarmament and related issues. More information can be found at www.nuclearinfo.org
[3] The contract to run AWE has been held by AWE Management Ltd. (AWE ML) since the year 2000. AWE ML is owned by Lockheed Martin, Serco and Jacobs Engineering. Jacobs joined the consortium in 2008, taking the stake previously held by British Nuclear Fuels. In 2016 AWE ML was restructured, following concerns about the performance of the consortium, with Lockheed Martin taking a 51% stake and the other two companies both owning 24.5%. Prior to 2016 the three owners had an equal share in AWE ML.
[4] The government retains ownership of the AWE sites, which are managed through a subsidiary company of AWE ML: AWE plc. AWEML owns all of the ordinary shares in AWE plc, but the MOD have retained a special share in the company which allows them to exercise control over the contracts and retain ownership of the sites. The renationalisation will happen through AWE plc becoming an Arms-Length Body owned by the MOD. AWE plc will continue to be the operator at the AWE sites and holder of the nuclear site license.
[5] MENSA was originally expected to be completed in 2017 and cost £734m. The current projected completion date for the project is 2023, and the budget has risen to £1.8bn. More information can be found in the National Audit Office Report “Managing infrastructure projects on nuclear-regulated sites” https://www.nao.org.uk/wp-content/uploads/2020/01/Managing-infrastructure-projects-on-nuclear-regulated-sites.pdf
[6] See http://news.onr.org.uk/2020/09/atomic-weapons-establishment-awe-to-face-prosecution/ and https://www.nuclearinfo.org/article/aldermaston-burghfield-safety-legal/awe-fined-%C2%A31-million-electrical-injury-incident
For more information contact David Cullen on 07732 872895