Executive summary
Date(s) of inspection:
March 2025
Aim of inspection
The aim of the inspection was:
- Firstly, to obtain an update on the current state of Nuclear Services (NS) in its journey to being a legal entity equally owned by the three licensees, EDF Nuclear Generation Ltd (NGL), NNB Generation Company (HPC) Ltd and Sizewell C Ltd (SZC) and an update on any future foreseeable changes to workload expansion / additional shareholders / employment status.
- Secondly to follow up from the Inspection carried out in November 2023 and five of the seven areas for improvement (AFIs). This included progress against the NS Development Plan, and arrangements between the three licensees and NS; covering interface, oversight and control of work conducted by NS. Focussing on work planning, management, and governance arrangements. Development against the other two AFIs are being progressed separately.
- Thirdly, to follow up on areas for future regulatory interest highlighted in the recent assessment report following the Management of Change (MoC) submission for the change of ownership of NS. Focussing on management system arrangements.
For consistency, the inspection was conducted jointly between ONR safety and security inspectors from New Reactors and Operating Facilities Directorates, responsible for regulating these licensees, enabling efficient and effective engagement, incorporating a cross-purpose assessment. The EA were also part of the inspection team as they are assessing the organisational capability at HPC. We are inspecting the licensee's ability to maintain control of the delivery of work activities carried out by NS.
Subject(s) of inspection
- LC36 - Organisational capability - Rating: Green
Key findings, inspector's opinions and reasons for judgement made
Since the last inspection in November 2023 Nuclear Services has further evolved and at the end January 2025 became a separate legal entity registered on companies house, now owned by the 3 licensees under legal agreement. This change was subject to a Management of Change and assessment by ONR which resulted in a letter of no objection. There have been a number of improvements made since this previous inspection, including the setting up of the Nuclear Services Board, accountability meetings, improvements to task order generation, and closer working of Nuclear Services and the licensees.
Following the 2023 inspection and MoC assessment, this inspection found that:
- There were no foreseeable changes proposed by Nuclear Services to the number of shareholders, the employment status of those working for Nuclear Services or expanding the workload beyond the three Licensees. Any such change would be subject to the Management of Change (MoC) process and discussion with ONR and would require the agreement of the three licensee shareholders. Regulatory oversight of the Nuclear Services business evolution strategy will be maintained through Level 3 and Level 4 meetings.
- Regarding the 5 Areas for Improvements (AFIs), identified from the inspection in November 2023, and the areas of regulatory interest identified following the MoC assessment for the change of ownership of NS, we gained assurance that AFI-1 (the strategy and plan) could be closed. The impact of NISR (AFI-7) will be followed up with a meeting after the inspection.
- Improvements had been made to the governance framework within licensees to manage NS via accountability meetings and the setting up of the NS Board and NS Steering Committee, However there were some shortfalls and inconsistencies in the governance and oversight arrangements between licensees (AFI-2) and NS management system arrangements (AFI-3) which should be addressed to ensure roles, responsibilities and accountabilities are clear, along with quality management arrangements. Regulatory interface arrangements also need to be clearly set out in licensee arrangements to address a finding from the change of ownership MoC assessment.
- Improvements were seen in the specification of work, including task order development and licensee accountability (AFI-4), but these need to be reflected at an appropriate level in the management system arrangements. ONR advised that further consideration be given to the split between projects and generic service provision to improve work management and prioritisation as it could impact on the safety significance of projects if not clear. The remaining 2 AFIs regarding the development of identification of core safety and security capability (AFI-5) and the target operating model for security (AFI-6) were out of scope of this inspection but are being followed up via cross licensee meetings with Nuclear Services.
Overall, the inspection was rated GREEN in that no significant issues were identified. A Regulatory Issue will be raised with licensees to address the shortfalls identified above and oversight will be maintained through routine meetings.
Conclusion
HPC, SZC, NGL and NS have been able to use the period since the inspection in November 2023 to further stress test their arrangements and incorporate learning, ahead of a change in ownership and NS moving to a legal entity in January 2025.
ONR’s November inspection set out seven areas for improvement for the three licensees, with the expectation that they should be addressed prior to NS becoming a legal entity.
Five of the seven areas for improvement were the focus of this inspection. We found that one of the areas could be closed, this was the strategy and plan, and that the impact of NISR would be followed up with a Level 4 meeting post the inspection to enable ONR to confirm their position.
The remaining three areas, governance, management system arrangements and the business processes to create task orders require further development and a Regulatory Issue will be raised to track progress. A Level 4 meeting will be held post the inspection to discuss and agree an additional potential Regulatory Issue around the risk of licensee compliance with LC17.
We agreed that a green RAG rating be assigned to this inspection noting no significant shortfalls were identified. Some of the areas for improvement are further developed than others and the focus is on clarity and inconsistencies still to be addressed.