Blood scandal payouts heap fresh cost pressure on UK government

LONDON — Changes to the U.K.’s infected blood scandal compensation scheme will require significantly more money than originally thought — just as the new government faces multiple spending pressures.

The U.K. government confirmed Friday that it will provide life-long payments to people swept up in what has been dubbed Britain’s worst health scandal.

Tens of thousands of people, including hemophiliacs and others receiving blood transfusions, were infected with HIV and/or Hepatitis C as a result of contaminated blood products used by the state in the 1970s and 1980s.

The last, Conservative-led government accepted a damning inquiry’s call for compensation, but the new Labour administration has vowed to go further.

Cabinet Office Minister Nick Thomas-Symonds has been told by civil servants that newly announced changes to the scheme require “significant additional costs,” according to a person briefed on the revised scheme.

A British government official said it “stands to reason” more funds will be required now that the new administration has agreed to a “more generous” setup.

They stressed that a final estimate of the compensation scheme’s cost has not been calculated yet, due to complexities in who will receive payouts and the amount each person will receive, and that a figure will be announced in the October government Budget.

They were granted anonymity like others quoted in this article to discuss sensitive matters.

Cabinet Office Minister Nick Thomas-Symonds told LBC Friday that individual payments could go as high as £2.8 million for the worst-affected people. It has previously been estimated that the compensation scheme was in line to cost the government at least £20 billion.

His department said Friday it will give extra payments to people hit by the scandal, following a series of recommendations by Robert Francis — the interim chair of the U.K.’s Infected Blood Compensation Authority.

Among the approved recommendations is a £10,000 payment to those who were infected due to “unethical research” — and a £15,000 payment for anyone involved in trials at the Lord Mayor Treloar College, a boarding school which was accused of treating hemophiliacs like “guinea pigs.”

It was also announced that the approximately 4,000 people already receiving compensation through a series of ad hoc schemes will continue to receive these payments, as well as the new compensation payments.

The U.K. government confirmed Friday that it will provide life-long payments to people swept up in what has been dubbed Britain’s worst health scandal. | Leon Neal/Getty Images

This was not the intention of the previous government and will therefore create extra cost pressures.

Family members and friends of those infected are also in line for compensation. However, this is expected to be a more drawn-out process.

‘Do what it takes’

The scheme is now likely to put extra strain on government finances just as Chancellor Rachel Reeves — who has tried to paint the Conservatives as reckless on public spending — mulls spending cuts and tax rises in her Budget later this year.

Thomas-Symonds told Times Radio today that “just over a billion pounds has already been paid out” but that “what the total estimate will be will be set out in the Budget red book (of tax and spend decisions) because there is still work to do on that.” 

“The government will do what it takes to deliver justice for the infected blood community,” he added. 

Ministers have already promised that compensation for the infected blood will not have a knock-on effect for day-to-day public service spending for the U.K.

But this means a more generous scheme looks set to put pressure on other departmental budgets.

Reeves has already told ministers they must find ways to bring down spending in their own departments, after claiming the country’s finances were in a worse position than expected when Labour entered government last month.