Audit team members included:
D.Derbyshire A.Bleeze P.Maxwell D&SGibson R.Slominski N.New P.Harvey C.Patchett A.French C.Shepherd M.El-Shanawany M.Bassett R.Nicholson J. MurrayC.Reiersen M.Jeal P.Woodhouse A Lindley R.Yates T.McNulty
Invaluable support was provided by many staff, in particular:
A.Cain N Tunstall S.Jones C JonesThe audit team would also like to record their thanks to all of their colleagues who provided input to the audit and covered other work during the audit, and to the staff of British Energy Generation Limited and British Energy Generation (UK) Limited and their contractors without whose co-operation the audit would not have been successful.
This report sets out the key findings of the team which carried out the safety audit of British Energy Generation Limited and British Energy Generation (UK) Limited, the two nuclear Licensees within British Energy plc. The audit was undertaken to review the capability of each Licensee to continue to discharge its responsibilities in the light of reductions in staff.
A multi-disciplinary team carried out a comprehensive review of both Licensees. The audit covered corporate management aspects, management of safety, ownership and control, retention of expertise, use of contractors and the proposed integration of the two Licensees. The main audit team comprised eleven nuclear inspectors from HSE's Nuclear Installations Inspectorate (NII), supported by other nuclear inspectors and an inspector from HSE's Operations Unit. The team started work at British Energy Generation Limited in March 1999 and moved on to British Energy Generation (UK) Limited in April 1999. This was followed by visits in May 1999 to some of the key contractors used by the Licensees.
The report presents a thorough analysis of the results from this work and makes recommendations for action to ensure the capability of British Energy Generation Limited and British Energy Generation (UK) Limited to discharge their responsibilities as nuclear Licensees is maintained or improved. The issues raised by the audit, whilst significant over the medium to long term, do not challenge the immediate safety of the operating nuclear power stations.
British Energy Generation Limited and British Energy Generation (UK) Limited have so far shown a positive response to the findings and are in the process of addressing the recommendations arising from the audit. Their action plans, setting out the proposals and timescales for resolving the recommendations, are to be produced within four weeks of receipt of this report. HSE's Nuclear Installations Inspectorate will monitor progress to expedite a timely and satisfactory completion.
If you have any comments or would like further information on the issues discussed in this report, please write to the Chief Inspector of Nuclear Installations at the address below.
Laurence Williams
Director of Nuclear Safety and
HM Chief Inspector of Nuclear Installations
St Peter's House
Balliol Road
Merseyside
L20 3LZ
As part of restructuring and privatisation of the nuclear industry, the advanced gas cooled reactor (AGR) power stations and the single pressurised water reactor (PWR) station passed into the private sector in 1996. A holding company, British Energy plc (BE), was formed with two wholly owned subsidiaries, Nuclear Electric Limited and Scottish Nuclear Limited. The subsidiaries were responsible for operating the power stations and therefore were granted the nuclear site licences in line with the HSE policy (derived from the requirements of the Nuclear Installations Act) that the user of the site must hold the licence.
Staff numbers in the two subsidiaries had been reduced in the run up to privatisation. Shortly after privatisation, both Nuclear Electric and Scottish Nuclear instigated a systematic programme of further staff reductions. The downsizing process was known as 'Vision 2000' within Nuclear Electric and 'Route 21' within Scottish Nuclear. In 1997 and early in 1998, the Nuclear Installations Inspectorate (NII) undertook a series of inspections of the Licensees' arrangements for managing the staff reductions. These inspections established that the Management of Change processes were generally acceptable; however, in certain safety areas questions were raised about the application of the processes to already depleted staffing levels.
It had been NII's intention to undertake further (follow up) inspections in late 1998. Before the work was started, BE approached NII with proposals to integrate Nuclear Electric and Scottish Nuclear into a single Licensee. To demonstrate that an integrated organisation would function effectively as a single Licensee, BE proposed to integrate the technical management and the technical teams of the two Licensees for a limited period before formally applying for relicensing. This process would result in some loss of management posts. The target date proposed by BE for the integration of the central functions was 1 January 1999.
Towards the end of 1998, at a late stage in the relicensing discussions, BE divulged there were commercial obstacles which made transfer to a single Licensee unattractive. Although BE recognised it could be some years before relicensing became commercially attractive, they still wished to proceed with the integration of the central functions on the proposed date namely, 1 January 1999. BE's intention is to retain two Licensees but to use an integrated management and central technical team to support the operation of the nuclear power stations of both licensees. This type of arrangement has not been used previously in the UK nuclear industry and presents NII with questions about the validity of the approach.
NII agreed to integration at the Board level and for some non-safety significant company functions; these changes took place in January 1999. However, agreement to integration in safety significant areas was withheld until an audit could be completed. The aim of the audit was to confirm that downsizing had not reduced the Licensees' capability to discharge their responsibilities and to deliver acceptable safety performance. The audit would also provide a baseline against which to judge further changes (including integration).
Another change took place on 1 January 1999. Nuclear Electric was renamed British Energy Generation Limited (BEGL) and Scottish Nuclear became British Energy Generation (UK) Limited (BEG(UK)L). The change of names did not invalidate the existing nuclear site licences and, hence, there was no need for applications for new licences.
In March and April 1999, NII audit teams visited the headquarters and technical centres of BEGL and BEG(UK)L. Visits were then made to some of the principal contractors who provide technical support to the Licensees. The NII teams interviewed a wide cross section of staff to gather information on which to make a judgement regarding the current situation in both Licensees. We were afforded unfettered access to talk to the staff. Their co-operation and openness greatly facilitated the work of the NII team. This report describes the findings from that work and makes recommendations for BEGL to BEG(UK)L to address.
The audit findings are focused on the areas for action to ensure the capability of BEGL and BEG(UK)L to discharge their responsibilities as Licensees is maintained or improved. Nevertheless, we have also highlighted a significant number of good points we found (or confirmed) during the audit. In particular, staff at all levels were committed to safe operation of the nuclear power stations. These good points have been taken into account in deciding upon the necessary regulatory action.
We consider the appropriate regulatory action is to require the downsizing process to stop whilst the recommendations arising from the audit are addressed. However, we judge that the issues which have been identified, whilst significant over the medium to long term, are not such that they challenge the immediate safety of the operation stations. The key issues are as follows.
The staff reduction programme in both Licensees had been predicated on the assumption that, in a privatised environment, they could reduce the amount of work (eg on plant modifications). In BEGL, staff reductions have in fact taken place even though there has not been the expected reduction in work load. The shortfall in resource has been met by placing greater reliance on contractors, some of whom are actually Licensee staff recently released under the downsizing programmes. In BEGL, the supervision of contractors is adding to the work load on the remaining in-house staff and in some areas we judge the staff reductions have gone too far. In BEG(UK)L, staff levels have been reduced in line with a reduction in the planned work load, but emergent work is at a much higher level than anticipated. BEG(UK)L has an even greater reliance upon contractors for technical support and, in some areas, its own staffing levels need to be increased.
In BEGL, we found no formal process by which the minimum skills base had been established (ie that which must be retained within the Licensee to enable it to discharge its duties under the licence). Thus the downsizing exercise was taking place without knowing the minimum resource requirements, or having a process to ensure they can be sustained over time. This has resulted in specialist expertise in several key areas (specific to the nuclear industry) being vested in single experts. Staff leaving to pursue their careers elsewhere have exacerbated this position since BEGL cannot easily find replacements with the requisite expertise and experience.
BEG(UK)L has developed a definition of its skills base by means of a register of posts which require suitably qualified and experienced people (SQEP) to fill them. The register identifies people who have the necessary qualifications and experience against the various posts. This approach to defining the skills base is welcomed, but it needs further development. For example, we found there are no formal criteria for judging whether qualifications and experience are adequate nor are there procedures to ensure removal of a person from the register if a skill is no longer being practised. In addition, BEG(UK)L does not have staff who can discharge the full range of identified skills and is reliant on external support to fulfill some SQEP roles. BEG(UK)L is thus unable, in all areas, to make decisions on safety matters based on the expertise of its own staff.
Neither Licensee has policies on the use of contractors to define, for example, the circumstances under which they should be employed and on what type of work, the level of responsibility that could be delegated to contractors, and the level of monitoring required to maintain Licensee ownership of the work. A variety of contractual arrangements exists. The closest relationships - namely partnerships in BEGL and satellite offices for BEG(UK)L - pose challenges with respect to loss of Licensee control, ownership of work and decisions derived therefrom, and loss of corporate memory.
In both BEGL and BEG(UK)L, the records show that some staff are working significant amounts of overtime. There is also under reporting of overtime so that the true situation must be worse than shown. Taking everything discussed above into account our judgement is that in some key safety areas in both BEGL and BEG(UK)L staff levels are at, and in a limited number of areas, below that required to sustain the work load and discharge the requirements of Licensees.
Our review of the application of the management of change process in BEGL and BEG(UK)L revealed flaws in both the processes and in their application. The way in which the processes have been applied has allowed preconditions (enablers), which should have been met before staff were released, to be relaxed to ongoing commitments. For example, a requirement to provide a trained replacement before someone leaves becomes simply 'provide training', which is open-ended. This has allowed staff to leave without having a ready replacement. We found examples of misapplication of the management of change process, including retrospective sign-off to justify release of staff who had already left (without completion of all the enablers) and examples where ongoing commitments had yet to be signed off long after someone had left.
We require BEGL and BEG(UK)L to address the recommendations arising from the audit. The Licensees need to provide an action plan within four weeks of receipt of this report, with proposals and timescales for resolving the recommendations. The key areas for action by the Licensees are as follows:
BEGL and BEG(UK)L to stop the planned reduction of in-house staff numbers until they can demonstrate their forward work predictions are reliable, and demonstrate that the Management of Change processes will not adversely affect the safety of nuclear plants. BEGL and BEG(UK)L to ensure that business plans are matched to the in-house staff capability and perceived work load. BEGL and BEG(UK)L to formalise, record and resource the skills base that each requires to underpin the duties of a Licensee to retain ownership and control of its operations. BEGL and BEG(UK)L to develop and promulgate policies to identify the key considerations and to guide decision making on why, when and how to utilise contractor resource - including their 'intelligent customer' requirements. BEGL and BEG(UK)L to investigate the reasons for the high level of overtime worked in certain areas (including estimates of that not reported), and take steps to prevent excessive hours being worked by staff handling nuclear safety related work. BEGL and BEG(UK)L, as a matter of urgency, to critically review their Management of Change processes in order to ensure they will incorporate the lessons learned from the change process (including the findings of this audit).
As part of the audit, we also explored the potential impact of integration. To ensure there is a seamless transition into the integrated organisation with no diminution of standards of work or loss of control of the Licensees' operations, all staff require a clear understanding of revised responsibilities, changes in methods of work, and additions to their workload before integration goes ahead. We found that, although the proposed structure of the integrated organisation has been defined and the managers for the joint team have been selected, few of the staff below senior level seem to know what additional responsibilities they might have to undertake following integration. We were also told that there is no explicit allowance within most work programmes to cater for the extra demands of integration - which will include additional travel between the two central offices at Barnwood (Gloucester) and Peel Park (East Kilbride). These demands will be over and above the normal workload, which is already high in many areas. We wish to be reassured that the two Licensees are ready to integrate. BEGL and BEG(UK)L therefore need to clearly define their state of readiness for integration and demonstrate that adequate control of operations can be maintained in both Licensees.
The integration proposals put forward by British Energy (maintaining two separate Licensees for the foreseeable future) are novel and raise a potential problem which we had not previously considered in detail. The crux of the issue is the question of the acceptability, in nuclear licensing terms, of individuals in the central (integrated) team who work for one Licensee providing advice to the operating stations in the other Licensee. Each Licensee is expected to maintain control of its own operations and have its own intelligent customer capability. The arrangement proposed by British Energy could violate these principles. Resolution of these issues will be necessary before our agreement to the deferred integration proposals can be considered. The simplest way to overcome the problem would be to form BEGL and BEG(UK)L into a single Licensee.
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