BNFL to cut 500 Sellafield jobs in two years

BRITISH NUCLEAR Fuels, the state-owned reprocessing company, is to cut 500 jobs at its Sellafield plant in Cumbria as part of a cost-cutting programme.

The jobs will go over two years and will include 220 workers who have already agreed voluntary terms. The rest of the jobs are expected to be cut through natural wastage, with no compulsory redundancies.

The cuts are part of a programme started in 1996 to reduce controllable costs at BNFL by 25 per cent by 2000. The plan should cut pounds 200m from the cost base.

The 500 jobs will be cut from the 6,500 employed at Sellafield. BNFL employs around 16,000 workers in total. The company said the cuts would not take place unless it was "safe to do so and operational performance can be maintained or improved".

The announcement comes as the Government considers the possible privatisation of BNFL in a move that could raise pounds 3bn. The Government appointed accountants KPMG to advise on possible options for the company in September last year.

KPMG's report was submitted before Christmas and recommended that ministers proceed with the sale. The Government said a decision was expected in the next 12 months. BNFL has appointed its own advisers, Rothschilds, which have acted on many government privatisations in the past.

Ministers are thought to be keen on a float this year. However, it may be delayed because of the problems of preparing the business for sale and the need to ring-fence its liabilities. The Magnox generators, which BNFL took over from the Government 18 months ago, alone have liabilities of pounds 18bn. Environmental groups have said privatisation could leave the taxpayer with a total bill of pounds 30bn.

BNFL meets 8 per cent of the UK's electricity needs. It has an order book worth pounds 13bn.