Profile: Andrew Jackson, the Atomic Energy Authority's CFO

When Andrew Jackson first got the call from a headhunter about a CFO position
at the UK Atomic Energy Authority, he admits the job didn’t exactly float his
boat. ‘I won’t hide the fact that my reaction wasn’t exactly positive. I didn’t
see it as a developing area.’

Five months into the job and he’s eating his words, although he admits he
hasn’t had many opportunities to tell people he meets at dinner parties just
exactly what he does for a living. ‘It has a huge name and yet most people don’t
know what the UKAEA does,’ he admits.

Jackson, 54, has joined the UKAEA at an interesting time. Originally set up
to assume responsibility for Britain’s atomic research programme from the
Ministry of Supply 52 years ago, it designed and built the world’s first
commercial nuclear power station at Calder Hall and its pioneering research
spawned a whole new industry.

The nuclear research programme is largely complete, although UKAEA continues
to lead the UK’s research into fusion research thanks to a combined £64m annual
investment from the UK government and Europe. But the organisation’s bread and
butter work has shifted to the decommissioning and restoration of its former
nuclear research facilities – it has already fully decommissioned 14 of its 26
research reactors.

Now, the body finds itself, for the first time ever, under commercial
pressure, following the government’s decision to open up the nuclear
decommissioning market to competition. The creation of the Nuclear
Decommissioning Agency as a result of the 2004 Energy Act has meant that UKAEA
can no longer sit on its laurels. The monopoly is no more – the onus is now on
reinventing itself as a contractor of choice.

The NDA, which manages nuclear sites on behalf of the government, has put
together a timetable for competition of all civil nuclear sites – there are
around 20 in total across the UK, including Sellafield in Cumbria, Dounreay and
Chapelcross in Scotland and Sizewell A in Suffolk, worth around £56bn in
decommissioning work between them.

CIMA-qualified Jackson describes the new set up as a watershed in UKAEA’s
developmental history. ‘Previously we were tasked by government to decommission
sites as cost effectively as possible. Now we’re competing with others to do
that. We have a contract with the NDA and they are our dominant client but it
means the UK Atomic Energy Authority is moving from being the custodian of
nuclear sites to being tasked with innovation and cost efficiency.’

The latter isn’t necessarily something that Joe Public wants to dwell on,
given the emotive nature of nuclear waste disposal. Nonetheless, deregulation of
the market has presented some interesting opportunities and challenges to
Jackson and his fellow board members. While the shift does open up opportunities
to expand the business into other nuclear and non-nuclear markets, it also means
that, for the first time, the UKAEA is having to put together competitive
tenders for decommissioning work.

Just last month, UKAEA announced a tie up with construction giant AMEC and
Colorado-based CC2M HILL to take on the nuclear clean up market. Jackson says
the consortium will bid for a ‘select number’ of the UK’s civil nuclear sites
currently being opened up to competition by the NDA. Beyond that, he’s looking
to the multi-billion dollar markets of the former Soviet Union and Eastern
Europe.

‘We each bring different skills and we’ll work together as a joint
collaboration team for the bid. If we’re successful we’ll fulfil the obligation
by using the resources of all the best people and set up joint ventures. UKAEA
is not a huge organisation so it’s a case of focusing on our core skills. We
want to develop a best in breed business. We’ve already won a few small
consultancy projects – one in the UK and a couple in Moscow – and we’re bidding
for work in Italy.’

Competititors are already on the radar screen. BNG, the clean-up arm of
British Nuclear Fuels (BNFL), whose proposed £1bn sale from its parent has been
put on hold due to a rift at the top of the NDA, and Bechtel, to name but two.
But Jackson has identified UKAEA’s ‘USPs’ (unique selling points).

‘This organisation has an incredible knowledge base and track record for
innovation and one of the few companies that has a track record, not only in
decommissioning older power stations that weren’t designed to be disassembled,
but doing it safely.’

Despite working for a non departmental government body, Jackson is fluent in
the language of the big bad world of business. But then he’s no stranger to the
commercial sector, having spent the last 11 years of his career with
construction giant Alfred McAlpine, most recently as finance director of its
civil engineering division; prior to that he was CFO of rival Bovis
International. ‘There are similarities between the sectors – they’re very
project oriented. One of the fundamental changes at UKAEA is that we’re becoming
a profit-making business. It’s a huge cultural challenge. I was brought in to
add commercial skills to the existing technical ones,’ he says.

Five months down the line, and Jackson’s confident he’s already made some
significant enhancements to the business. ‘From a practical perspective, we’ve
restructured some of the reporting for a stronger focus on cash flow and the
balance sheet.’ A far bigger challenge, however, has been tackling employee’s
attitudes, although he doesn’t believe that packing his team off on executive
education courses is the answer to changing their outlook.

‘The skills are here. Going forward it’s about understanding why we want to
win business and understanding the risk/reward balance. If you’re responsible
for spending government money, you tend to ask different questions.’

Jackson has enlisted the help of consultants at KPMG to help transform the
organisation to a commercial beast, and wouldn’t shy away from continuing that
tack. ‘It’s about having a clear view of what we’re good at and what we’re not.
We also realise that the NDA isn’t going to give all the work to us so that it
can maintain some competitive pressure.’

This commercial mindset is also a driving force behind moves to return
decommissioned sites to commercial use. It has good incentives to do so – not
only does this generate income for UKAEA, it also serves as positive PR for the
local community. He is adamant that local residents are more concerned about job
losses as the result of nuclear sites closing, than having a radioactive site on
their doorstep.

‘Windrath used to have 2,000 UKAEA people on that site and today there are
still 2,000 but less than 200 are associated with decommissioning. We have
commercial tenants who rent units in the science and technology park there,’ he
explains.

A former nuclear research reactor may not be everyone’s idea of an attractive
backdrop to their HQ, but Jackson maintains there are good commercial reasons
why a business might want to relocate to the sites. ‘Some people like the extra
security you get.’

Security at Harwell, Jackson’s base, and rather aptly the home of the British
nuclear industry, is indeed tight and understandably so – armed policemen at the
entrance.

The taxi driver who drove me to Harwell from nearby Didcot Parkway could only
remember one security breach – when women from Greenham Common succeeded in
infiltrating the site. As it turns out, the demonstration was a bit of a damp
squib, failing to generate much in the way of publicity, although no doubt
serving as an embarrassment to security chiefs at the site.

Perhaps they would do well to take a leaf out of Jackson’s book. ‘I’m a
person who asks thousands of questions,’ he says. ‘The only stupid question is
the one you don’t ask.’

Nuclear’s role in our quest for power

The nuclear industry currently supplies a quarter of the UK’s energy needs, a
figure that is set to fall steadily as the oldest stations are decommissioned.

But with the International Energy Agency predicting a rise in global energy
demand of50-60% by 2030, and with dwindling oil supplies fuelling talk of an
energy crisis, the debate about the role that nuclear power should be playing in
supplying our energy needs rages on.

The government’s energy review, unveiled just weeks ago, has opened to
consultation some core energy considerations – from ensuring that the UK’s
long-term goal of reducing carbon emissions is met, to the steps the government
should be taking to deliver reliable energy supplies. It will also look to
tackle the thorny question of nuclear new build including long-term liabilities
and waste management.

Despite being plugged as an open-minded exercise, cynics believe the review
is littlemore than a tortuous way of saying ‘yes’ to anew generation of nuclear
power stations. Plans for future decommissioning of power stations, as they
reach the end of their life, mean that by 2025 nuclear capacity will have
reduced to a single station.

Environmental campaigner Greenpeace has warned that building more nuclear
power stations will dramatically increase the risk of a catastrophic terrorist
attack.

Meanwhile, a recent survey from the Tyndall Centre for Climate Change
Research found that the general stigma attached to nuclear power remains, with
84% of the 1,491 respondents believing that it creates dangerous waste and 70%
agreeing that nuclear power is a hazard to human health.

It’s just two years since the government published its energy white paper,
with its vision of renewable energy allied with energy efficiency providing a
low-carbon, secure and affordable energy future.

The question is whether the absence of any meaningful energy efficiency
policies since then, combined with the growing list of MPs now prepared to voice
their support for nuclear power, perhaps means those cynics were onto
something?’