The National Audit Office does not use excitable phrases like “utter shambles.” But the spending watchdog’s verdict on Hinkley Point C, the nuclear power plant in Somerset that is supposedly inevitable, amounts to the same thing. The government “has locked consumers into a risky and expensive project with uncertain strategic and economic benefits”.
The 80-page report confirms one’s worst fears about how ministers fell in love with Hinkley. First, they wedded themselves to an inflexible financial model. Then they agreed commercial terms with developer EDF in 2013, when energy prices were sky-high, and ploughed on regardless when the economic case for Hinkley started to crumble.
The second failing is worse. When the deal was finally signed by Theresa May’s administration last September, the energy landscape had been transformed. The economic case for Hinkley was “marginal”, says the NAO, and “less favourable, but reasonable, assumptions” about energy prices and renewables would have meant the deal was not value for money even on the business department’s own model.
The document tells a depressing tale of inadequate scrutiny and successive governments ignoring the energy revolution taking place beyond their spreadsheets. “Time will tell whether the deal represents value for money,” says the NAO generously, before adding the killer clause: “But we cannot say the department has maximised the chances that it will be.” The rest of us call that a politician’s vanity project.