Whitehall bungled miners' compensation, say MPs

Whitehall bungled miners' compensation, say MPs

Whitehall "seriously mismanaged" a £4bn compensation scheme for former miners suffering from lung disease and physical injuries, a report by a committee of MPs said yesterday.

Two-thirds of the claims cost more to administer than the cash paid out and some claimants are still waiting for the money a decade after they put in the claim. Others died before they got the cash.

The total cost of the scheme is expected to rise to £6.4bn - with £2.3bn being spent on administration, including £1.3bn to private solicitors to process claims.

The Commons public accounts committee report condemns the Department for Business, Enterprise & Regulatory Reform for the handling of the scheme.

"There are lessons aplenty here for other parts of government planning and implementing new compensation schemes," said Edward Leigh, the Tory chairman of the committee. "These include getting actuarial advice in advance on the likely volume of claims and being a lot tougher with solicitors on the conditions attached to their fee tariffs. Far too much money went into the solicitors' pockets."

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The department greatly underestimated the number of claimants: 750,000 people claimed instead of the estimated 218,000. The average claim took 33 months to handle, with the longest taking more than 11 years.

Some solicitors overcharged claimants or charged them fees when the government was paying the bills. The department is seeking the return of more than £80m from solicitors, while a number of big law firms are now reimbursing claimants.

Thompsons, which made £123.6m in England and Wales handling claims, is returning £2.2m to claimants; Beresfords, which made £115m from the scheme, said it had returned all the money to claimants; and Hugh James, which made £90m, never charged claimants. The Union of Democratic Mineworkers, which received £31m from the scheme, has not disclosed whether it has reimbursed anybody.

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