| Decommissioning | |||||||||
| and waste | |||||||||
| management | Restructuring | Contracts | Other | Total | |||||
| Group | £m | £m | £m | £m | £m | ||||
| At 1 April 2006 | 8.9 | 15.4 | 10.0 | 1.5 | 35.8 | ||||
| Balance sheet reclassifications | – | 0.3 | 0.9 | – | 1.2 | ||||
| Charged to the income statement: | |||||||||
| additional provisions | 0.2 | 6.3 | 3.1 | 1.2 | 10.8 | ||||
| unused amounts released | – | (2.4) | (0.3) | – | (2.7) | ||||
| Utilised | (1.7) | (6.7) | (5.7) | (0.2) | (14.3) | ||||
| Businesses sold | (1.5) | (1.3) | (1.2) | (0.8) | (4.8) | ||||
| At 31 March 2007 | 5.9 | 11.6 | 6.8 | 1.7 | 26.0 | ||||
| Balance sheet reclassifications | 0.4 | – | – | (0.1) | 0.3 | ||||
| Charged to the income statement: | |||||||||
| additional provisions | – | 0.6 | 0.3 | 0.1 | 1.0 | ||||
| Utilised | (1.5) | (4.1) | (1.9) | (0.1) | (7.6) | ||||
| At 31 March 2008 | 4.8 | 8.1 | 5.2 | 1.6 | 19.7 |
| Decommissioning | |||||||||
| and waste | |||||||||
| management | Restructuring | Contracts | Other | Total | |||||
| Company | £m | £m | £m | £m | £m | ||||
| At 1 April 2006 | 7.8 | 14.0 | 8.2 | 0.9 | 30.9 | ||||
| Balance sheet reclassifications | (0.5) | 0.8 | 0.9 | – | 1.2 | ||||
| Charged to the income statement: | |||||||||
| additional provisions | 0.2 | 6.3 | 3.1 | 1.2 | 10.8 | ||||
| unused amounts released | – | (2.4) | (0.3) | – | (2.7) | ||||
| Utilised | (1.6) | (5.8) | (5.1) | (0.2) | (12.7) | ||||
| Businesses sold | – | (1.3) | – | (0.2) | (1.5) | ||||
| At 31 March 2007 | 5.9 | 11.6 | 6.8 | 1.7 | 26.0 | ||||
| Balance sheet reclassifications | 0.4 | – | – | (0.1) | 0.3 | ||||
| Charged to the income statement: | |||||||||
| additional provisions | – | 0.6 | 0.3 | 0.1 | 1.0 | ||||
| Utilised | (1.5) | (4.1) | (1.9) | (0.1) | (7.6) | ||||
| At 31 March 2008 | 4.8 | 8.1 | 5.2 | 1.6 | 19.7 |
| Group | Company | ||||||
| Provisions for liabilities and charges | 2008 £m |
2007 £m |
2008 £m |
2007 £m |
|||
| Non–current | 6.8 | 15.2 | 6.8 | 15.2 | |||
| Current | 12.9 | 10.8 | 12.9 | 10.8 | |||
| 19.7 | 26.0 | 19.7 | 26.0 | ||||
Decommissioning and waste management
On 31 March 1996 certain properties, rights and liabilities of UKAEA
were vested in the Company in accordance with the Transfer Scheme made pursuant
to section 1 of the Atomic Energy Authority Act 1995.
A supplemental agreement entered into pursuant to the Transfer Scheme provides that liabilities for decommissioning any nuclear facility in existence as at 31 March 1996 and for any waste transferred to UKAEA (“the Authority”) for disposal prior to 31 March 1996 are to remain with the Authority. All new or incremental decommissioning, waste management and clean up liabilities arising after 1 April 1996 were assumed by the Group except for certain liabilities which have been transferred to, or assumed by, third parties.
Provisions for these costs were made in full once facilities became contaminated and were calculated on the latest technical assessments of the processes and methods likely to be used in the future and represent estimates derived from a combination of the technical knowledge available, existing legislation and regulations and commercial agreements.
The timing of the utilisation of these provisions is uncertain and costs will be incurred as the facilities continue to be decommissioned and the waste disposed of. The majority of this provision relates to the Building 220 facilities at the Harwell site where the timing of decommissioning is uncertain.
Restructuring
In the two years to March 2007 AEA completed the transformation of
its business from a diverse group to a single mission company focused on climate
change and energy consultancy. Provisions related to this restructuring are
held for associated redundancies and for warranties and indemnities given
under business sale agreements. These provisions will be utilised within the
next 1 to 2 years.
Contracts
Contract provisions are in respect of projected losses or commitments
on long–term contracts, including onerous lease contracts on properties
no longer fully occupied by the Company. These provisions will be utilised
when the costs are incurred on the long–term contracts and as lease
payments are made on the vacant properties. Applying a risk adjusted discount
rate does not give a result materially different from the undiscounted provision
and no adjustment for the effect of discounting has been made.
Other
The remainder of the provisions are primarily dilapidations and wear and tear
provisions on the Company’s property assets. These provisions will be
utilised as dilapidation repairs are carried out.