17 October 2003
The Office of National Statistics has told Public Finance that it is considering whether £52bn in public liabilities for decommissioning nuclear facilities must be entered in the national accounts.
The government is accepting £3.9bn in decommissioning liabilities as part of its rescue of the failed British Energy, having previously transferred liabilities of £48bn from British Nuclear Fuels Ltd (BNFL).
A spokesman for ONS confirmed that it had been asked by the government to rule on whether nuclear decommissioning liabilities arising from the rescue of both British Energy and BNFL should be on or off balance sheet. The figure for total nuclear decommissioning liabilities is comparable to England's entire annual revenue expenditure on education.
When British Energy was privatised in 1996 it was sold for £1.5bn, but carried with it decommissioning liabilities several times that figure. Although the company built up a Nuclear Liabilities Fund as a reserve against decommissioning costs, its current value is £775m.
BNFL liabilities of £39bn were reallocated two years ago by the government to a new quango, the Nuclear Decommissioning Authority (initially known as the Liabilities Management Authority), but the cost was revised upward in April this year to £48bn.
BNFL remains state-owned and Trade and Industry Secretary Patricia Hewitt announced in July that the government had abandoned plans to privatise the company. A spokeswoman for the DTI said that a public-private partnership was also now unlikely.
The DTI says the full nuclear decommissioning bill will have to be paid over the next century. Prior to the British Energy rescue, the DTI had estimated that the government would have to pay £1bn a year in clean-up costs for the next ten years.
That figure could increase if British Energy is forced into early decommissioning of existing reactors because of the fall in wholesale electricity prices, though a spokesman for British Energy says it has 'no intention' of taking any reactors out of service early.
PFoct2003
