LONDON — Critical programs aimed at updating Britain’s nuclear weapons infrastructure have been hit by long delays and huge cost increases, according to the parliamentary Public Accounts Committee.
Poor management on three nuclear projects involving warhead assembly, core reactor production and submarine building have resulted in combined cost increases of £1.35 billion (U.S. $1.67 billion) as well as delays of between 1.7 and 6.3 years, the committee revealed in a report scheduled for release May 12.
The cost overruns were caused in large part by avoidable mistakes, such as beginning construction work without mature designs, said the committee.
The cost increases and delays cited in the report could be the tip of the iceberg in the nuclear sector. The three programs investigated by the committee represent about a quarter, by initial value, of the 52 nuclear infrastructure programs that the Ministry of Defence is pursuing. A report on nuclear infrastructure late last year by the government’s financial watchdog, the National Audit Office, said the initial value of all the projects was almost £5 billion.
The parliamentary committee said the MoD admitted that costs on the three projects “could keep rising, as its poor contract design has left the taxpayer to assume financial risk, while doing little to incentivize contractors to improve their performance.”
The report said the MoD has poorly managed the three programs, failed to learn from past mistakes and agreed to poorly designed contracts with the major companies that have a stranglehold on Britain’s defense nuclear sector. The contracts did not allow the ministry to share the financial risk with contractors, which meant the government bore the full impact of cost increases, including those of subcontractors.
“To utterly fail to learn from mistakes over decades, to spectacularly repeat the same mistakes at huge cost to the taxpayer — and at huge cost to confidence in our defense capabilities — is completely unacceptable," said Member of Parliament Meg Hillier, who chairs the Public Accounts Committee.
"We see too often these same mistakes repeated,” she added. “The department [MoD] knows it can’t go on like this. It knows it must change and operate differently. The test now is to see how it will do that, and soon.”
The MoD said it “immensely regretted” the impact on the taxpayer.
What happened with the three programs?
The worst offender in the committee’s report is the MENSA program at the Atomic Weapons Establishment in Burghfield, southern England, where a new nuclear warhead assembly and disassembly facility is under construction.
“MENSA had seen a cost increase of £1.07 billion. Some of these cost increases were the result of poor planning decisions and were avoidable. For example, 48% of the total increased costs and nearly £400 million for MENSA was a result of construction starting before requirements or designs were sufficiently clear, which was time-consuming and costly to subsequently rectify,” the report said.
The Atomic Weapons Establishment is run by a Lockheed Martin-led partnership involving Jacobs Engineering as well as Serco under a government-owned, contractor-operated arrangement.
The report by the National Audit Office estimated MENSA would be 6.3 years late.
When asked about how the MENSA program is faring, AWE provided Defense News with its latest in-service completion date of 2023, adding that the work is now "focused on procuring and fitting out the necessary equipment and seeking regulatory approvals.”
The other two programs investigated by the Public Accounts Committee are based at the Rolls-Royce reactor-core production capability facilities at Raynesway, near Derby, England, and at BAE Systems’ submarine-building yard at Barrow.
The cost of the Rolls-Royce facility being built to equip the upcoming Dreadnought-class of nuclear missile submarines with a new reactor design was forecast at £474 million, with a completion target date of 2026. The National Audit Office found that date to be 5.1 years behind schedule.
The future sub-building facility at BAE Systems’ Barrow location is expected to cost £240 million, with a completion date of 2022. The new facility is to allow for the modular build of the four Dreadnought-class submarines destined to replace the Royal Navy’s Vanguard boats. The National Audit Office estimated that BAE’s infrastructure project is 1.7 years behind schedule under that completion date.
The watchdog also said in its report that despite earlier challenges, the projects had made progress in later stages. All programs are in their fitting-out stage.
A Rolls-Royce spokesperson noted that the creation of a new, nuclear-regulated facility is “a highly complex and intricate project."
“Our existing facilities have been in use since the 1950s, so this really is a once-in-a-generation construction project, and we’re working closely with the MoD to ensure this important facility faces no further delays,” the spokesperson said.
A BAE spokesperson said the company had not seen the report and therefore was unable to comment.
How are other nuclear projects getting along?
Another troubled AWE program — Project Pegasus — was not included in the parliamentary investigation, as construction had not even begun when the MoD paused the project. The ministry put it on hold to further mature the design of the facility to better handle and produce enriched uranium. The £634 million facility was originally planned to enter service in 2016.
The MoD told the Public Accounts Committee it had learned lessons from other programs, and so paused Pegasus to ensure the design is sufficiently mature and that requirements for a future warhead are clear.
The committee reported that the country’s nuclear efforts account for about 18-19 percent of the U.K. defense budget, whereas it is only 6-7 percent of the U.S. defense budget.
The MoD told the committee that it had the necessary funding but will negotiate with the Treasury about future funding as part of the upcoming governmentwide spending review.
The ministry also said it wants to avoid cuts to the nuclear budget. “The Department is keen to place some form of ring-fence around the nuclear budget, given its high priority and importance,” the committee report said.
In a statement, an MoD spokesperson cited the complexity of nuclear infrastructure projects, but said the ministry continues “to work closely with the regulators and our industry partners.”
"Together, we are committed to strengthening the management of nuclear programs, including significant investments in infrastructure to store and update weapons.”