National Audit Office Press Releases
Investigation into submarine defueling and dismantling
Despite a government commitment from over 20 years ago to dispose of its radioactive waste as soon as reasonably practicable, the Ministry of Defence (the Department) has not yet disposed of any of the 20 submarines it has decommissioned since 1980.
The Department now stores twice as many submarines as it operates, with seven having been in storage for longer than they were in service. It first aimed to have a disposal process that would operate by 2011 but now estimates to roll-out its dismantling approach by 2026. The Department has spent an estimated £0.5 billion since 1980 on storing and maintaining its retired submarines.
To dispose of submarines, the Department must undertake a complex series of inter-related tasks to remove the fuel, take out radioactive parts (dismantling) and then recycle the boat. At each stage the Department needs the necessary space, infrastructure, skills and regulatory approvals. Its approach involves several inter-dependent projects including defueling-related projects at Devonportand submarine dismantling covering Rosyth and Devonport.
Since 2004, the Department has not defueled any submarines and does not have a fully funded plan to re-start the work. Nine of the Department’s 20 out-of-service submarines contain nuclear fuel which needs to be removed using nuclear-regulator approved dock infrastructure and facilities. In 2004, the Office for Nuclear Regulation found facilities in Devonport did not meet the latest regulatory standards and the Department stopped defueling submarines. Following delays its latest planning estimate, subject to ongoing scrutiny and departmental approval, is to start defueling from 2023, an 11-year delay. Overall, the project budget has increased 57% (£100 million), from £175 million to £275 million in June 2018.
Delays to defueling have wider consequences for costs, risk and dock space. The Department pays an estimated £12 million a year to maintain and store the nine fuelled submarines currently held in Devonport. Maintaining fuelled submarines presents additional technical uncertainties and affects dock availability, particularly in Devonport which is expected to run out of space for retired submarines in the mid-2020s. Space constraints have meant the Department does not have a dock to prepare its most recently retired submarine for long-term storage and is developing other ways of doing this. Until submarines are placed in storage, they need to be kept partially crewed, potentially affecting the Department’s ability to redeploy its personnel.
The Department has started to dismantle two submarines, Swiftsure and Resolution, but does not yet have a fully funded process to remove, transport and store all types of radioactive parts. The dismantling project has been delayed by 15 years, with the whole-life cost increasing by £0.8 billion (50%). The Department’s latest planning estimate, which is yet to be approved, is to roll-out its approach by 2026.
Delays create cost, capacity and reputational risks beyond the project. Alongside annual maintenance, the Department has committed to removing submarines from the water every 15 years for more detailed maintenance in dock, recognising a £2.2 billion liability for this within the overall £7.5 billion submarine disposal related liability included in its 2017-18 accounts. If this work took 24 months, rather than the assumed 18 months, and there was a two-year delay to dismantling, it could increase its liabilities by an estimated £0.9 billion.
Delays have provided the Department with an opportunity to re-assess its dismantling approach. To meet its commitments to Parliament, the Department has set itself a series of milestones. In particular, to dismantle its first submarine by 2023 for which it needs to have decided its approach to removing and transporting intermediate-level waste by December 2019. It will then design the process, demonstrate it can work, contract for the transport and ensure it has the budget in place.
In the last two years, the Department has revised its governance arrangements which it is continuing to develop. From April 2019, the Defence Nuclear Organisation will have responsibility for all disposal-related projects, including those previously within the Royal Navy’s remit. It recognises as high risk its failure to manage its nuclear liabilities coherently and has assessed itself as not yet having fully developed plans in place to meet 67% of its submarine defueling and dismantling objectives.
Looking further ahead, the Department does not have a fully-developed plan to dispose of Vanguard and Astute submarines, which are currently in service, or its future Dreadnought-class submarines, which have different types of nuclear reactor. For the Vanguard and Astute-class it has identified suitable dock space which, if used, will need to be maintained. Within the civil nuclear sector, organisations are required to consider nuclear waste disposal during the design stage of power stations and nuclear infrastructure. The Department does not have a similar obligation.
Notes for Editors
out-of-service submarines stored by the Ministry of Defence (the Department)
average number of years submarines out-of-service, against 26 years in-service
estimated total cost to the Department of maintaining retired submarines since 1980 (to 2017) *
estimated cost to the Department of fully disposing of a submarine*
Department’s future liability to maintain and dispose of its 20 stored and 10 in-service submarines, as at March 2018
number of years’ delay in re-establishing an ability to defuel submarines, moving from 2012 to a current planning estimate of 2023**
57% (£100 million)
budget increase for re-establishing a defueling capability from £175 million (2007) to £275 million (2018)
average number of years fuelled submarines have been stored
Dismantling submarines (removing radioactive parts)
number of years delay rolling out a tested submarine dismantling approach, moving from 2011 to a current planning estimate of 2026**
50% (£0.8 billion)
increase in the cost of the project from £1.6 billion (2002) to £2.4 billion (2016)
estimated increase in the Department’s longer-term financial liabilities related to submarine dismantling should it take:
- six months longer to remove intermediate-level waste from boats dismantled in two stages than the expected 18 months; and
- a similar delay dismantling the remaining submarines
*Figures estimated based on the average annual cost over the last four years at 2017/18 prices
** ‘Current planning estimate’ reflects the Department’s current working level which has not yet been approved by the Departmental Investment Board as it is subject to ongoing scrutiny
- To dispose of a retired submarine, the Department needs to undertake a series of tasks. These include preparing the boat for long-term storage; routinely maintaining retired boats; removing irradiated nuclear fuel (defueling); taking out the radioactive parts (dismantling); and then breaking-up the boat and recycling its parts. It stores submarines at both its Devonport dockyard in Devon and in Rosyth, Fife. Aside from its storage basin in Devonport, it contracts with Babcock International Group plc (Babcock) to use these dockyards. It currently only defuels and prepares submarines for storage in Devonport, and has started dismantling in Rosyth, where all the submarines have already been defueled.
- Government categorises its nuclear waste according to radioactivity and heat generation levels which influences how parts can be handled, transported and stored. Levels of radioactive material include irradiated fuel from within the submarine’s reactor core; intermediate-level waste primarily the Reactor Pressure Vessel and parts that have been close to the nuclear fuel; and low-level waste.
- It will cost an estimated £96 million to fully dispose of a submarine excluding costs associated with establishing the required facilities, infrastructure and disposing of nuclear waste at the end of its storage period.
- The Department’s ability to dispose of its submarines depends largely on one contractor, Babcock and also on government more widely. Babcock owns the nuclear-licensed dockyards and facilities in both Devonport and Rosyth, whilst also providing aspects of the related projects. In addition, the Department relies on Radioactive Waste Management, a wholly-owned subsidiary of the Nuclear Decommissioning Authority, to provide the Geological Disposal Facility. This is expected to be available to store submarine-related intermediate-level waste from the 2050s. The Department currently contributes 6% of the total annual cost, equivalent to £2 million in 2017-18.
- The Department includes a £7.5 billion liability in its 2017-18 accounts for maintaining and then disposing of its out-of-service submarines. Of this figure, £2.2 billion relates to maintaining the 20 submarines currently out of service and the costs of using the Devonport site. The Department also provided for £1.5 billion to dispose of these boats and the remaining three Trafalgar-class and four Vanguard-class currently in service. The Department does not need to provide for the liabilities associated with storing and disposing of submarines not yet operational. It increased its liability by an average £100 million for each of the Astute-class recently brought into service. Potential changes to the HM Treasury’s discount rates, which contributed significantly to the 50% (£2.5 billion) increase in the provision from 2016-17 to 2017-18, affect the size of the Department’s liability.
- Press notices and reports are available from the date of publication on the NAO website. Hard copies can be obtained by using the relevant links on our website.
- The National Audit Office scrutinises public spending for Parliament and is independent of government. The Comptroller and Auditor General (C&AG), Sir Amyas Morse KCB, is an Officer of the House of Commons and leads the NAO, which employs some 785 people. The C&AG certifies the accounts of all government departments and many other public sector bodies. He has statutory authority to examine and report to Parliament on whether departments and the bodies they fund have used their resources efficiently, effectively, and with economy. Our studies evaluate the value for money of public spending, nationally and locally. Our recommendations and reports on good practice help government improve public services. Our work led to audited savings of £741 million in 2017.
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