Why is Britain trying to make our nuclear reactors ‘woke’?

Sit on a roundtable of small businesses – as I have on many occasions – and it won’t be long before the topic shifts to the maddening number of rules and regulations that companies have to comply with if they want to sell to government.

Since the Social Value Act passed in 2012, companies bidding on public tenders are not only graded on value for money for the taxpayer (note: that’s you reader), but also on an amorphous concept known as ‘social value’. What this means, in plain English, is that it is no longer enough to provide a good product at a competitive price to win a tender. Bidders that offer worse value-for-money can still get the contract, if they employ more women, offer training to ex-cons, or are in some way ‘greener’. 

This isn’t a completely absurd idea. All things being equal, a green business employing people who would otherwise struggle to get work is a benefit to the state. But there are clear problems with social value in procurement.

First, small businesses spot that this ends up stacking the deck against them. If you’re up against BT, then you will never win on social value. They already have large apprenticeship programmes, do outreach with underrepresented groups, and crucially, pay people to track and write-up these schemes. Even when small businesses do good, they have a much harder time proving it.

Second, value-for-money is not perfectly objective, but it is a heck of a lot easier to weigh and compare than the various social value factors out there. I know of cases where civil servants have complained they have no way of picking between two bids on social value grounds. In some cases, social value factors can deliberately work against innovation. If your business is automating paperwork for the NHS, then you might not provide many ‘opportunities for people who face barriers to employment’ even if you ensure more patients get treated.

Third, it seems to encourage firms to adopt ineffective ‘woke’ practices like unconscious bias training. I know of at least one case where a Big Four consultancy won a public tender and then required its subcontractor, an extremely innovative tech startup, to attend mandatory anti-racism training. As they say in the States: ‘Your tax dollars at work.’

But if ‘social value’ requirements make life difficult for small businesses, they are even more baffling when it comes to our nuclear industry.

Nuclear power is clean, reliable, and, currently, expensive to build in Britain. Britain’s track record with mega-projects is poor and our stop-start approach to nuclear investment means the first two nuclear power stations Britain will build in the 21st century are the world’s two most expensive. Small modular reactors, or SMRs, could potentially solve that cost problem by making it much cheaper to adopt the fleet approach that has worked so well to contain costs in South Korea in the 2000s and 2010s, France in the 1970s and 80s, and Britain in the 1960s.

It is also something we might actually be good at. Rolls-Royce is already world-leading when it comes to making small modular reactors. It is just the ones they make currently go into submarines.

The case for the British state to invest in SMRs is, therefore, pretty strong. Not only do SMRs have the potential to cut emissions, cut bills, and make us energy secure. Britain could, in Rolls-Royce SMR, have a world-leading nuclear business selling plants across the world.

So in 2023, Britain launched the Great British Nuclear SMR competition to pick the vendor Britain would use to build a new fleet of nuclear reactors. Then-Energy Secretary Grant Shapps declared that it would be the fastest competition of its kind ever. After two years, Rolls-Royce SMR has been picked as the government’s sole preferred bidder (the initial plan was to back two vendors). Britain still hasn’t placed a single order for an SMR. Rolls-Royce SMR, however, have now entered into negotiations with the government over building reactors in the UK. Some industry experts tell me they expect Rolls-Royce SMR to be built in the Czech Republic before the UK – despite being far further along the regulatory process here.

In the meantime, Ontario’s publicly-owned utility company has put in an order for four SMRs, with the first set to be online by 2029. 

The comparison between Canada and Britain is stark. I wanted to know more about why despite creating the ‘world’s fastest’ SMR competition, Britain has fallen behind. So I sent a few Freedom of Information requests to Great British Nuclear to learn more about the process. After a back-and-forth over what they can and can’t share, I eventually found out two things.

First, the total amount spent on the competition was £22 million. Most of that (£19.78 million) went to consultants like Deloitte and Arup.

Second, the social value component of the tender. It had been flagged by a number of people involved with the process that this would be worth looking into. 

The official advice is that 10 per cent of every tender should be based on ‘social value’ factors. However, Great British Nuclear’s competition increased that weighting to 12 per cent.

Great British Nuclear were able to provide all of the questions they asked companies relating to social value. In total, there were 26 pages worth of questions covering social value. If vendors used all the space they had available to them, then they would have produced 358 pages of A4 on social value alone.

One question, in particular, stood out. In the section titled ‘tackle workforce inequality’, bidders were assessed against a rather ambitious policy outcome:

‘Tackle workforce inequality across characteristics such as gender, ethnic diversity, race, religious belief, sexual orientation, physical ability and marital status, and achieve 50 per cent gender balance by 2030 for the workforce employed on this TP Contract within the Contractor and its supply chain.’

At one point, the full question asks about employing ‘people seeking asylum’. This is a strange and, fundamentally, unachievable request: British law bans asylum seekers from working.

The asylum seeker requirement is straightforwardly impossible. The 50:50 gender balanced workforce requirement isn’t much easier to deliver.

The big problem is that not only would the chosen vendor be required to have a 50 per cent gender balanced workforce, so too would the companies in the vendor’s supply chain. And in just five years’ time.

There’s two reasons to doubt that this is achievable.

First, nuclear is a male-dominated industry – in part because many of the roles in nuclear require qualifications that themselves are male-dominated. Engineering departments at British universities tend to be dominated by men. Changing this will be complicated and is unlikely to happen quickly.  Of course, firms could game this by having a larger HR department (a female-dominated field), but that would kind of miss the point.

Second, even if it was possible to solve the pipeline problem overnight there’d be another big problem: the supply chain. Rolls-Royce SMR would have to require every firm in its supply chain to make an effort to hire women at much higher rates. Not only would this be tricky – Rolls-Royce SMR as a new entrant probably lacks the power to get its supply chain to sign up to a 50:50 gender balance over such a short-time frame – it would be extremely paperwork intensive. Nuclear supply chains are extremely complex. We would be asking SMR vendors like Rolls-Royce SMR to track thousands of companies' progress on gender equality. Is that really a good use of their time?

I wasn’t able to get the answers vendors gave for this question, but I suspect they wouldn’t have made a commitment to something that would be near-impossible to achieve.

Building a nuclear power station is complicated enough. Great British Nuclear shouldn’t make it even harder by demanding near-impossible progress on gender overnight.