Bonuses at taxpayer-funded quango the Nuclear Decommissioning Authority rose by almost a third last year even though it faces a £4bn budget shortfall by 2015.
Staff were awarded £5m, according to an answer to a Freedom of Information request tabled by the Guardian, compared with just under £3.8m the previous year. The NDA, which employs about 300 people, will publish its annual report by the end of the month when it will outline how much it paid to directors for the last financial year. The TaxPayers' Alliance said that the pay-outs would be hard to justify at a time of public sector spending cuts.
The NDA's chairman Stephen Henwood recently admitted there were "shortcomings" in the way the bonus scheme worked, and it has since been tightened up. He has also promised to cut a third of its staff and its £800m annual running costs by a fifth within three years. Staff costs went up by over 40% in two years, according to the NDA's most recent published annual reports.
A spokesman for the NDA said that senior managers received between £15,000 and £20,000 in bonuses last year and that the average bonus was about £12,000. According to its annual report, executive directors were awarded £65,000 each.
The NDA is responsible for decommissioning the UK's old reactors, estimated at costing £73bn. It is supposed to fund about half its annual clean-up budget through its commercial activities, such as operating the remaining Magnox reactors and reprocessing spent fuel. The rest is paid for by the taxpayer, via the energy department. But recently, lower income and higher decommissioning costs mean funding the NDA takes up two thirds of the energy department's annual budget.
During the year corresponding to last year's pay-outs – 2008/2009 – the NDA increased its income by over £500m largely as a result of higher electricity prices. It also said that it achieved £183m of efficiency savings. An NDA spokesman said: "In order to attract and retain the calibre of people necessary to deliver the NDA's required performance, NDA staff have the contractual opportunity to achieve an annual bonus dependent on the achievement of strict performance targets."
But Matthew Sinclair of the TaxPayers' Alliance, said: "Taxpayers will struggle to understand why ... a multi-million pound bonus pot is necessary ... when there is so much pressure to cut spending in order to address the fiscal crisis. At the same time, using cash bonuses to this extent, at an organisation that has such a long term objective, could clearly create the wrong incentives for staff and lead to the pursuit of short term efficiencies at a greater long term cost. The NDA needs to review how it rewards staff and do more to deliver value for taxpayers' money."
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