ONR Annual Report and Accounts 2017/18 - …

1 OFFICE FOR NUCLEAR REGULATION Annual Report AND Accounts 2017 /18HC 1078 OFFICE FOR NUCLEAR REGULATION Annual Report AND Accounts 2017 /18 Presented to Parliament pursuant to Paragraphs 21, 24 and 25(3) of Schedule 7 to the Energy Act by the House of Commons to be printed on 21 June 1078 ONR Annual Report AND Accounts 2017 /18 OFFICE FOR NUCLEAR REGULATION3 Crown copyright 2018 This publication is licensed under the terms of the Open Government Licence except where otherwise stated. To view this licence, visit: Where we have identified any third party copyright information you will need to obtain permission from the copyright holders publication is available at Any enquiries regarding this publication should be sent to us at 978-1-5286-0219-8 CCS0218031918 04/18 Printed on paper containing 75% recycled fibre content minimumPrinted in the UK by the APS Group on behalf of the Controller of Her Majesty s Stationery Annual Report AND Accounts 2017 /18 OFFICE FOR NUCLEAR REGULATION5 CONTENTS1.

2 performance Report _____6 Chair s foreword _____6 Chief Executive s foreword _____8 Chief Nuclear Inspector s statement _____10 Overview summary_____12 Who we are _____12 What we do _____12 Where we do it _____13 Key issues and risks _____13 Going concern _____14 ONR in numbers - 2017 /18 _____16 Our Strategic Themes for 2017 /18 _____18 performance summary _____18 Financial performance _____22 performance analysis _____26 Strategic Theme 1 - Influencing improvements in nuclear safety and security _____28 Strategic Theme 2 - Inspiring a climate of stakeholder respect, trust and confidence _____61 Strategic Theme 3 - Getting the best out of our people _____66 Strategic Theme 4 - Developing a high-performing, sustainable organisation _____702.

3 ACCOUNTABILITY Report _____78 Corporate Governance Report _____78 Directors Report - Composition of ONR s Board _____78 Governance Statement _____84 Statement of Accounting Officer Responsibilities _____102 Remuneration and Staff Report (including Gender Pay Report )_____103 Remuneration policy _____105 Staff information _____1122018 Gender Pay Report_____117 Parliamentary Accountability and Audit Report _____124 The Certificate and Report of the Comptroller and Auditor General to the Houses of Parliament 1273. FINANCIAL STATEMENTS _____1326 ONR Annual Report AND Accounts 2017 /18 OFFICE FOR NUCLEAR REGULATIONPERFORMANCE REPORTCHAIR S FOREWORD1I am pleased to Report that ONR has continued to influence improvements in nuclear safety and security using the breadth of regulatory and enforcement tools we have to ensure compliance with the high standards required by UK law, protecting the workforce and the public.

4 The senior team is competently driving results towards our 2020 Strategy and I am confident in their delivery of ONR s mission and vision so that we deliver operational results alongside undertaking new work to ensure our long-term sustainability and effectiveness. The environment in which we operate never stands still and we remain mindful of the need to be flexible and responsive to change, as acutely demonstrated by several changes to new build assumptions and our response to the Government s decision to withdraw from Euratom. We adopt an enabling approach to regulation where possible and work in a constructive way with dutyholders and other stakeholders to facilitate effective delivery against clear and prioritised safety and security outcomes.

5 The focus is on strengthening industry accountability, while enabling dutyholders to discharge their duties in an efficient and effective way. However, we will and do take enforcement action where , we continue to enhance our nuclear inspector team, with successful recruitment allowing us to grow to meet the new and changing demands placed upon us. We re improving our training and implementing improvements to ensure greater sharing of knowledge and this will remain a high priority for the next few years as we develop our ONR Academy so that it will be fit for future Board level, we said farewell with thanks to John Crackett CB and Dr Richard Savage and welcomed Sarika Patel, Sir Simon Lister and Mark Foy whose experience broadens our skills base.

6 We have continued to engage with those we regulate so that we may personally listen to and learn from their feedback, with enlightening and inspiring visits to Devonport Royal Dockyard, Hinkley Point C and the Atomic Weapons Establishment sites at Aldermaston and Burghfield. Nick Baldwin CBE Chair, ONR7 ONR Annual Report AND Accounts 2017 /18 OFFICE FOR NUCLEAR REGULATIONNone of this would be possible without the continued dedication, commitment and professionalism of ONR s staff and I cannot thank them enough for maintaining their enthusiasm and loyalty, whatever the pressures. I would like to thank my fellow Board Members for their unstinting support and for carrying out their role, collegiately and with vigour, to the highest standards of is my last year as ONR Chair and as I look back I am confident that we are more open, transparent and diverse, strengthening our corporate governance, growing our capacity and developing our capability and resilience and I m proud of the mature public corporation we are Baldwin CBE ONR ChairTHE ENVIRONMENT IN WHICH WE OPERATE NEVER STANDS STILL AND WE REMAIN MINDFUL OF THE NEED TO BE FLEXIBLE AND RESPONSIVE TO CHANGE, AS ACUTELY DEMONSTRATED BY SEVERAL CHANGES TO NEW BUILD ASSUMPTIONS AND OUR RESPONSE TO THE GOVERNMENT S DECISION TO WITHDRAW FROM EURATOM.

7 8 ONR Annual Report AND Accounts 2017 /18 OFFICE FOR NUCLEAR REGULATIONThe public s safety and security remains our top priority. So I m pleased to Report that ONR s core regulatory purpose was delivered effectively last year. Our Chief Nuclear Inspector s Report gives details on how we have effectively carried out our regulatory duties. Our trajectory to our 2020 Strategic Plan remains on track, but our operating environment continues to change and evolve and we have remained agile and responsive as new demands upon us have arisen. We undertook more work than planned for UK Government, with significant support to the Department for Business, Energy and Industrial Strategy to transpose the EU Basic Safety Standards Directive, supported a Small Modular Reactor competition and developed next stages and planning and delivery support to what is possibly our biggest challenge in decades to develop an independent UK State System of Accountancy for and Control of nuclear materials, which will enable the UK to meet international safeguards standards from March 2019.

8 We also responded to considerable uncertainty and change to the new build element of our portfolio, which led to sizeable variations to our financial forecasting, as we re-deployed staff to other work in the short changes caused some stretch internally, but to the credit of our staff, we have continued to do what is right so as to provide consistent input, direction and a public service, we were keen to improve our insight from the hundreds of stakeholder engagements we undertake every year. I m pleased that our first ever independent survey reported very positive results and we ll continue to work more pro-actively and transparently in line with the UK Regulators Code. The changes of structure and capability we introduced during 2016/17 have had a positive impact on most of our internal functions, leading to strong internal governance and coherent corporate planning and a more strategic and flexible approach to our learning and development.

9 An exception to this relates to IT, where progress has been unacceptably slow and exacerbated an already ageing estate, but where a recent change to our stance is improving confidence that will ensure we reap success in 2018 EXECUTIVE S FOREWORDI M PROUD TO SAY THAT ONR BECAME A MORE DIVERSE ORGANISATION, REDUCING OUR AVERAGE AGE, HIRING MORE WOMEN, TAKING ON MORE PEOPLE WITH DIVERSE PERSPECTIVES, EMPLOYING GRADUATES AND nne Kelbie Chief Executive9 ONR Annual Report AND Accounts 2017 /18 OFFICE FOR NUCLEAR REGULATIONOur investment in our capability and capacity has begun to pay off, with delivery of over 20 improvement projects and we have laid the foundations for activity to modernise ONR, developing more efficient and effective ways of working.

10 The Knowledge Management and Business Process Review Project (Well Informed Regulatory Decisions - WIReD ) is a key enabler for delivering our 2020 strategic I m proud to say that ONR became a more diverse organisation, reducing our average age, hiring more women, taking on more people with diverse perspectives, employing graduates and apprentices and using external insights to help us think differently and inform further growth of a healthy ONR culture that promotes regulatory excellence in all has been my pleasure and privilege to lead ONR, working with our highly talented and committed people, to work with engaging and challenging stakeholders at home and abroad and to continue our journey to becoming a more modern and agile organisation that can regulate effectively and efficiently for 2020 and beyond.