Compensation – right or racket ?

By Robert Whiston FRSA     Nov 1st 2010

The Criminal Injuries Compensation Authority is a curious beast, and one that produces unfathomable annual accounts.

It is the product of the welfare culture which was so dominant in the 1960s and designed “to compensate blameless victims of violent crime”; but in the current climate of fiscal restraint it is proving to be an expensive liberal bolt-on.

For instance, apart from property worth £4.3 million (in 2007), with a further £1m of ‘assets under constuction’, .the balance sheet is at best confusing and amounts in the Income & Expenditure accounts not confirmed elsewhere.

“At 31 March 2007, the Authority’s balance sheet records net liabilities of £1,187 million (31 March 2006 £1,252 million). This reflects the inclusion of liabilities falling due in future years, which, to the extent that they are not to be met from the Authority’s other sources of income, can only be met by future grants-in-aid from the Ministry of Justice. This is because, under the normal conventions applying to Ministry of Justice control over income and expenditure, such grant may not be paid in advance of need.”

From its annual budget thought to be £282m (£282,237,000 Net Parliamentary funding in 2009), it paid out over £209 million to people in 70,000 cases.

But where did all that money go and were they all deserving cases ? When transparency is de rigurre in political circles and Whitehall Depts the Criminal Injuries Compensation Authority somehow stays aloof. There is no analysis of payments made by offence and the sums involved, e.g. for theft, GBH, road accidents, rape, etc. 

New Zealand has a slightly more comprehensive compensation scheme than Britain, i.e. the family of a person killed by a motor car can claim. It is called the Accident Compensation Corporation (ACC). In its 2008 Annual Report the declared ‘Total Claims Liability’ was put at $NZ 18,006 million ($NZ 18 billion), and its ‘Net Levy Income’ at a far lower $NZ 3,652 million ($NZ 3.6 billion). [1]

Addendum: Was it this scenario – for a country of only 4.4 million – that prompted Kenneth Clarke MP, the Minister for Justice to say on Nov 23rd 2010, that in addition to  having to look at the prospects for the compensation for terrorism scheme.

“. . . . The fact is that we were left with a system of criminal injuries compensation which was not working. We have enormous liabilities piling up for which the previous Government had not made any adequate funds available, so we have hundreds of millions of pounds-worth of arrears of claims.” Hansard, Nov 23rd 2010. [2]    

In a 1999 consultation paper, “Compensation For Victims of Violent Crime”  (Home Office), which examined the structure of payments made and the qualitfying categories, no attempt was made to allocate compensation paid by type of crime or even gender. Imagine how our understanding would be enlarged if we knew that, say, 35% , 31% and 22% of the compensation fund was paid out to victims of street crime, domestic violence and rape, respectively, and/or that 80% of those 22% rape victims were female and aged between 16 and 25, and/or that 50% were aged  16 – 20 ?  We might find out that the average compensdation amount paid for rape was, say, £11,500 per claim but only £2,500 for street stabbings.  As things presently stand we can’t even guess at the numbers involved and the money paid out.

An inkling of how and why rape compensation was set at its relatively high level and why compensation passed to being funded by Parliament can be found in the text at page 9:

“Previous criticism of the tariff itself has tended to focus on the position of women and child victims, the argument being that since they have been under-represented in actions’ for damages in the courts, the parameters for awards for these groups were established largely by claims made to the Criminal Injuries Compensation Board and were thus not open to the wider pressures inherent in personal injury litigation.”

In lumping together ‘women and children’ it was possible to correctly claim that because the majority of child victims of sexual abuse did not claim for damages in the civil courts changes should be made. This was principally because their “assailants were people of low means and thus there is no prospect in any event of being compensated by that route.”

As a consequence of this reasoning it was easier to make the next step, namely:

“Similarly, women who suffer rape and other assault are rarely able to sue their attackers for precisely the same reason.”

In 2010 we still have no idea where the money is spent. We find out (quite accidently through a newspaper report) that following a case of a false rape allegation – where the minimum compensation paid to a rape victim is £7,500 – that firstly no crime and secondly, no victims are needed to be paid compensation. In May 2010 the Criminal Injuries Compensation Authority nonchalantly confirmed that no actual conviction was needed to get the cash.[3]

“If we think it is more likely than not that someone was the blameless victim of a violent crime, we may be able to offer compensation, even if no offender was brought to justice.”

But this was not even remotely the case. This is the official position of the CICA according to a CICA spokesperson, although he / she did lamely add:

“Where we have any evidence of fraud or attempted fraud we report it to the police and co-operate fully. If the police themselves tell us about a fraud, we will seek repayment because a fraud against us is a fraud against the taxpayer.”

Confirmation of the £209 million said to be spent on 70,000 cases cannot be found in the published accounts with the closest reference being this (see table below):

The figure £244 is one that crops up more than once in the accounts. For instance, under ‘Note 3’ of Staff Costs, the cost of Provision for early release is £244,000.

The Authority’s Annual Report seems pleased that it received 65,445 new applications in 2009-10 which was an increase of 13.3%  over the number of applications received in the previous year (2008-09 = 57,753). However, it makes no attempt to square this with the 70,000 figure claimed elsewhere in the text.

If the CICA published accounts of their claims and liabilities they might look similar to those issued by the ACC and shown here as “Fig 3.  ACC (NZ) Section 13.1″. This table relates only to “Sensitive Claims” – which is the terminology used for rape and sexual assault offences. Fig 3.  ACC (NZ) shows the cost for sensitive clims to exceed $NZ 28 million in 2006.  Simple arithmetic reveals that the 2008 Total Liability for each New Zealander stood at $NZ 4,092 million per person, paid for by a levy of $NZ 830 million raised from businesses and people.

The dangers to the UK recovery – post 2010 – of introducing an old age pension scheme based solely on ‘Resident Status’ (as was proposed a few years ago) would prove disastrous given that state pension, which are tied to contributions made over 35 years,  are said to be costing the Treasury too much.  Of course, the only gainers in this adjustment of entitlement would be women and immigrants – both categories would have failed to pay in sufficient money to cover their ’til death’ pension.

Fraudsters

The CICA sees  its switch over to “online and telephone application services” as something of a landmark but it is one which immediately puts one in mind of the ballot fraud perpetrated in the last general election.  

                           CICA website

Golden Teeth ?

What, one has to wonder, is costing the taxpayer £3 million pa spent, apparently, on CICA staff for “medical and dental fees” (see Note 4, Administration Costs,  £3,115,000) ? Do they have appalling teeth or shocking dietary habits that render them prone to extensive medical intervention – more than the rest of Scotland ? Why can’t they pay for their own medical and dental needs – or is the NHS not grand enough for them ?

Wages & Pensions

The matter of pension, once a topic easily air-brushed away, is now a more sensitive subject as millions of wage earners face savage cuts to incomes and the total eradication of their private pension schemes.

Employees benefit from the not insignificant Principal Civil Service Pension Scheme (PCSPS) which is described an unfunded multi-employer ‘Defined Benefit’ Scheme (the Rolls Royce of pensions).  Coyly the report states that:

 “ . . .the Ministry of Justice . . . . are unable to identify their share of its underlying assets and liabilities.”

What is revealed is that for 2009-10 the CICA (the employer) contributed £1.7m (£1.698 million) to the PCSPS (in 2008-09 it was £1.569 million). And just to add a little more misery to the gloom comes the news that: 

“The contribution rates reflect benefits as they are accrued, not when the costs are actually incurred, and reflect past experience of the scheme.”

For ease of understanding the columns showing the not ungenerous ‘Cash Equivalent Transfer Values’ have been omitted to avoid creating a complex table.

The Prime Minister’s salary is £142,500 pa, meaning that many in the NGO sector are overpaid for the comparatively light duties they have to undertake in comparison with the heavy responsibilities of a Prime Minister.

As noted earlier, the figure £244,000,000 is one that crops up more than once in the accounts, for instance, under ‘Note 3’ of Staff Costs (see above). The table below puts this cost to contect with other salary costs. The total wages bill of £13½  million is made up of pension costs, agency staff and redundancy type payments (see table below).

Either a dichotomy exists or the CICA prefers to operate with two faces – one for claimants and another for public consumption. How else can the CICA mandate, “to compensate blameless victims of violent crime” be reconciled with its refusal in June 2010 to provide compensation to, for example, taxi driver Clive Bishop who has lost his business and income as a result of a false allegation ?

This is especially keenly felt when a Tribunal ruled, in 2009, that Mr. Bishop could apply to the Criminal Injuries Compensation Authority (CICA). In June 2010 the CICA turned down his application on the grounds it was not a “violent crime” even though by then  the Home Office accepted that in cases of false allegations of rape ‘the victim’ is the man accused.[4]

How much more violent can you get than to be prevented from working ? Rape falls within the ambit of the Offences Against the Person Act of 1861. 

“. .. . The purpose of the criminal injuries compensation scheme [via the CICA] is to provide compensation to blameless persons who have sustained criminal injury.” – Hansard, Feb 23rd 2010 (NB. ‘perverting the court of justice’ is a criminal act). [5]

And returning to the earlier point, how on earth can the CICA assess as they did in May 2010,  whether the injury really was an act of criminality if there is no criminal and no crime ?

 

END

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2 responses to “Compensation – right or racket ?

  1. Excellent and interesting article Robert.

    I can see that you have the same debates in the UK as we have in the Netherlands about the disproportionate higher management salaries to be earned in publicly funded NGO’s and Quango’s compared to the annual salary of your MP.

    Another comparable issue is the shameless and blunt gender racism and gender discrimination exhibited towards males in the policies and functioning by these same NGO’s and Quango’s, which you excellently illustrated on the case of denied compensation to taxidriver Mr. Bishop by the Criminal Injuries Compensation Authority (CICA) without any proper motivation and reason.

    I read in your newspapers that your new government will put an end to most of the endless shipload of publicly funded NGO’s, Authorities and Quango’s. Will they put an end to the Criminal Injuries Compensation Authority (CICA) as well as you made an excellent case why they should?!

  2. I am very much impressed by the breadth of Robert Whiston’s research. I note the gender bias in the compensation board.
    Ivor

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