Chancellor Rachel Reeves has been trying to tackle the UK’s finances, making tough decisions no one wants to make, only to be hit with a £47 billion bill in outstanding compensations.
“Black Hole” Discovered First
Earlier this year, she uncovered a £22 billion ‘black hole’ in the public finances, which she has been trying to fix, only to uncover this new bill.
£84 Billion Disbursed Already
The state has already disbursed £84 billion through 12 different compensation schemes, which previous governments have organised in power for injustices, negligence, and cover-ups.
£47 Billion Still Owed to Victims
According to the National Audit Office data analysis by the Taxpayers Alliance, the £84 billion has been paid out already but leaves for £47 billion still owed to both the victims of the infected blood and the Post Office Horizons scandal.
No End Figure for Infected Blood Scandal
The government has allocated more than £2,2 billion for the infected blood victims but that not the final tally as other demands for compensation are still in the works.
30,000 Infected With HIV in Infected Blood Scandal
More than 30,000 people in the UK were infected with HIV and hepatitis C after receiving contaminated blood products in the 1970s and 80s. The previous governments ignored warnings about the blood supplies, allowing the victims to be infected.
£10 Billion Expected Compensation for Victims of Infected Blood Scandal
£346 million out of the budgeted £2,2 billion has already been paid out however Former SNP MP Chris Stephens said the actual compensation cost was always understood to be about £10 billion.
Commitments Need to Be Kept
He said, “The government needs to ensure that the commitments parliament has given the infected blood community are met. In full.”
Government Committed to Pay Out
The government has stated that they are committed to paying out comprehensive compensation to the affected infected blood scandal, but has noted that they don’t have final numbers at this stage.
Clinical Negligence: A Cost Factor
The largest scheme is for clinical negligence managed by NHS Resolutions, which amounts to £26,5 billion and has already been paid out with a further £69,3 billion budgeted.
Horizon Scandal Another Compensation Drain
Another scandal resulting in compensation was the Post Office Horizon scandal, in which many were wrongly prosecuted after faulty software indicated that money was missing. More than 900 sub-postmasters were charged with stealing.
700 Falsely Prosecuted
Many sub-postmasters went to prison for theft, and many were financially ruined. Between 1999 and 2015, 700 people were prosecuted.
No Compensation Can Undo the Damage
Former Post Office minister Paul Scully, who oversaw compensation for postmasters, said, “I came across many horrendous cases. Nothing can properly compensate the way lives were ruined and businesses bankrupted by this scandal, but we have a duty to compensate the victims as best as we can.”
Compensation Affects the Public Pockets
He said, “If the cover-up did not happen and the mistakes were dealt with earlier, the cost would be far lower for the public purse.”
Windrush Scandal Budgeted at £215 Million
The Windrush scandal, which saw deported people who were entitled to live in the UK, was also costly, coming in at £85,9 billion thus far from a budgeted £215 million.
Ongoing Armed Forces Compensation Scheme at £1,3 Billion
Another ongoing scheme is the Armed Forces Compensation Scheme (AFCS), which pays out for death, injury or illness caused by service on or after the 6th of April 2005, which budgeted a total of £2,5 billion and has paid out £1,3 billion.
Outstanding Compensation Fee Is Double the Feared ‘Black Hole’ Costs
The original ‘black hole’ in the nation’s finances required Reeves to make some drastic changes, such as scrapping winter fuel payments, cutting social care reforms, and abolishing the upgrade to the rail network.
Next Steps for Reeves Cause Tension
The new revealed outstanding amount is almost double that of the ‘black hole’ funds, and many are wondering what Ms Reeves will do next to alleviate this mounting bill.
Backtrack on Tax Raises
However, she has confirmed that she intends to reverse her previous election promise not to raise taxes, which may affect the public’s perception and trust.
Autumn Budget to Discuss Expected Compensation Costs
Details about the compensation schemes and the expected costs will be discussed in the autumn budget, and a Treasury source said the compensation will be dealt with “as required in the usual way.”
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Featured Image Credit: Shutterstock / Tsuguliev.