Chancellor Rachel Reeves will present first autumn budget in October (Image: Getty)
Rachel Reeves must tackle a £47 billion bill in outstanding compensation claims to get a grip of Britain’s finances, reports have suggested.
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The state has already paid £84 billion under previous governments under 12 compensation schemes for injustice, cover-ups and negligence.
Although that has been paid out, £47billion is still owed for victims of the infected blood and Post Office Horizon scandals, an analysis of National Audit Office data by the TaxpAyers’ Alliance shows.
The Government’s bill could grow even higher with victims of the infected blood scandal expecting more than the £2.2billion currently in the budget to compensate them, while other demands for compensation are still to be decided.
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Former Post Office minister Paul Scully, who oversaw compensation for postmasters, told The Independent that the huge bill to the taxpayer is often “the consequence of groupthink and cover-up to protect the brand”
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He said: “If the cover-up did not happen and the mistakes were dealt with earlier, the cost would be far lower to the public purse.”
He added: “I came across many horrendous cases [in the Post Office scandal]. 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 we can.”
He said the budgeted amounts were based on value-for-money tests by the Treasury to protect the taxpayer in the future.
The largest amount the taxpayer has to fund is for clinical negligence schemes managed by NHS Resolution, where £26.5billion has been paid out and a further £69.3billion budgeted for.
Other schemes have an unknown ceiling for payments, including the vaccine damage scheme from the late 1970s, with £20million paid out so far.
The payments for the Windrush scandal – which saw people entitled to live in the UK wrongly deported – have so far reached £85.9million from a budgeted amount of £215million.
Another open scheme is the armed forces compensation scheme (AFCS) which pays out for injury, illness or death caused by service on or after 6 April 2005. So far, £1.3bn has been paid out from a total of £2.3billion budgeted.
The Chancellor unveiled a £22 billion blackhold in the public's finances earlier this month.
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A Treasury source said that details on the expected costs of compensation schemes will be set out in the autumn Budget “as required in the usual way”.
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The government has stated that it is committed to paying comprehensive compensation to infected and affected victims of the infected blood scandal. But it admits that it does not yet know how much needs to be set aside.
The Treasury has noted that the total cost of the compensation scheme will ultimately depend on the number of people who have been infected or affected who come forward, but “each eligible person will get the compensation they are due”.