Section 31: Establishment and maintenance of the Account
138.Section 31 establishes a statutory account – the Nuclear Decommissioning Funding Account – as the basis for funding all of the NDA’s activities. The aim is to enable the NDA to plan ahead effectively and put long term contracts in place by demonstrating the availability of funding on a rolling basis over a period of ten years or more.
139.The provision is intended to give confidence to the market that resources will be available to support substantial programmes of work over a period of years, and thereby should encourage competition for clean up contracts and help to build confidence in the NDA and in its programmes.
140.Subsection (2) provides for the opening balance of the Account to be determined by the Secretary of State with the consent of the Treasury. The intention is to ensure it is sufficient to support the NDA’s programme over the first 10 year period. The opening balance will be the sum total of:
the value of BNFL’s Nuclear Liabilities Investment Portfolio (which, under section 42 of the Act will be transferred to the Secretary of State and paid into the Consolidated Fund – see paragraphs 160 and 161 below);
the value of the Magnox Undertaking of 1998 at the time it is extinguished by section 43 of the Act (see paragraphs 162 and 163 below);
an additional sum from Government to drive forward the decommissioning and clean up programme as effectively and efficiently as possible.
141.Thereafter, the Account will be held by the Secretary of State who, under section 22, will receive all income passed to the NDA for payment into the Consolidated Fund and provide grants to the NDA. The Account will record all such receipts and grants as credits or debits respectively. Any money generated by the NDA in operating installations such as THORP, SMP or Magnox will therefore be identified as a contribution to the funding of the decommissioning and clean up programme. Subsection (4) also provides for the Account to be credited by any amounts received by the Secretary of State on the NDA’s behalf and by interest on the balance in the account.
142.The annual contribution will be the largest and most important of the credits to the Account. The intention is that it should be set at a level which ensures that the balance of the Account is kept at a sufficient level to support a rolling ten year programme for the NDA. Subsections (6) and (7) require the Secretary of State to publish a policy statement explaining how the annual contribution is to be determined so as to prevent the balance of the Account falling below a minimum defined level determined by the Secretary of State with the consent of the Treasury. The Secretary of State will be accountable to Parliament for the implementation of this policy and the operation of the Account as a whole.
