1.  In 2007, the estimated undiscounted cost of decommissioning civil nuclear sites reached the enormous sum of £61 billion, yet despite many attempts at estimation this figure is likely to rise even further. It has been all too easy for successive governments and the industry to push these costs onto future taxpayers. The Nuclear Decommissioning Authority is now faced with trying to get to grips with the legacy of this repeated deferral and the massive challenge of cleaning up these sites which contain waste, the exact nature of which is not known in some cases.

2.  Between 2005 and 2007, estimates of decommissioning costs expected to be incurred by sites between April 2008 to March 2013 rose by 41%. Uncertainty around costs far into the future is understandable. But uncertainty over the escalating costs of work due to be carried out imminently is difficult to justify. The Nuclear Decommissioning Authority should publish alongside any future estimates the likely range within which future costs may fall.

3.  With this track record of rising costs it is surprising that the Authority only reviews the process of estimating decommissioning costs by its site licensees, but not the details of costs themselves. The Authority has procedures to ensure estimates are prepared on a consistent basis across its sites, but needs to put in place better arrangements for challenging the underlying cost estimates themselves, for example, by taking forward its plan to commission a validation of site estimates.

4.  It is even more surprising that, in 2006-07, around a third of the Authority's expenditure on its sites went to meet support costs. Site support costs, including engineering support, human resources and procurement services, amounted to £826 million. The Authority should benchmark support costs between sites and encourage greater use of shared services to deliver efficiency savings. It should also expect bidders for future contracts to achieve efficiencies in support services.

5.  Changes made by the Authority at short notice to some sites' planned programmes have increased costs to the taxpayer. As a result of changes to decommissioning plans, the Authority has had to provide £31.6 million to its sites to cover the costs of early contract closure, as well as staff training and redundancy. The Department, working with the Authority and HM Treasury, should examine the arrangements for planning and resourcing the Authority's work. Improved arrangements could include making better use of year-on-year flexibility and building reserves to provide a buffer against unexpected demands.

6.  There are significant variations in performance across the sites being decommissioned. Working with the new parent bodies, the Authority should identify further ways of strengthening the supply chain for decommissioning work, for example by helping to train people and develop the required skills. The Authority should use the parent body competitions to sharpen the commercial incentives in its contracts and drive efficiency improvements.

7.  The Authority's charges for reprocessing nuclear fuel may have included inadequate allowance for the cost of decommissioning the related facility. When agreeing new contracts, the Authority should ensure that, at a minimum, charges are sufficient to provide a contribution to the estimated decommissioning costs of facilities and, where possible, cover the full cost it is likely to incur in delivering the service.

8.  The Department is unable to provide complete assurance that the costs of decommissioning new nuclear power stations will not fall back on future taxpayers. The Department should ensure that there are robust arrangements to ensure that operators of new stations make adequate provision. The level of contribution made by operators to the independent decommissioning funds should be based on prudent estimates that should be updated regularly. The Department must also learn the lessons of British Energy by ensuring that it regularly monitors risks to taxpayers. Before giving the go-ahead to new sites, the Department should be confident that operators can make arrangements to meet all future decommissioning costs.