Government compensation schemes: update

On the basis of a report by the Comptroller and Auditor General, we took oral evidence from several public bodies administering compensation schemes – the Cabinet Office, the Home Office, the Ministry of Defence (MoD), the Department of Business & Trade (DBT) and from the Infected Blood Compensation Authority.1 We also took oral evidence from Sir Alan Bates, founder of the Justice for Subpostmasters Alliance; Kate Burt, Chief Executive at The Haemophilia Society; Rev Clive Foster MBE, Windrush Commissioner at Office of the Windrush Commissioner; and Peter Gibson, Chief Executive at Fighting with Pride and experts with specialist knowledge relating to government compensation schemes. We also surveyed individuals across all government compensation schemes to increase our understanding of the common problems that people experience. More details of the survey are included in Annex: Summary of survey results.

Government compensation schemes are expected to provide people who have experienced harm, either directly or indirectly, from the actions or inaction of public bodies with the compensation or financial redress they are rightly entitled to. The NAO’s report examined the operational phase of a selection of seven government compensation and financial recognition schemes, including Windrush, Post Office Horizon IT (looking at four separate schemes within it), LGBT Financial Recognition, and Infected Blood. Our report concentrates predominantly on the schemes examined by the NAO and their operations.2 1 C&AG’s Report, Government’s compensation and financial recognition schemes, HC 1817, 17 April 2026 2 C&AG’s Report 10 Table 1 Scheme overview Scheme People eligible for Lead government compensation department Windrush Members of the Windrush Home Office Compensation Scheme generation and their families who incurred losses due to difficulties proving their legal immigration status in the UK. This was extended to any eligible person who arrived in the UK before the end of 1988 from any country and who is lawfully in the UK. Horizon Shortfall Current and former Department for Scheme subpostmasters with Post Business & Trade Office contracts who were (DBT) wrongly held liable by Post Office Limited for shortfalls in branch accounts and who were neither convicted nor litigants in the group litigation. Horizon Group 492 of the 555 DBT Litigation Order subpostmasters involved Scheme in the group litigation that resulted in a 2019 High Court settlement, following a judgement which ruled that the Horizon IT system was faulty Horizon Overturned Current and former DBT Convictions Scheme subpostmasters whose criminal convictions were overturned by the courts, or who were prosecuted but not convicted nor received a caution. 11 Horizon Convictions Current and former DBT Redress Scheme subpostmasters whose criminal convictions were deemed to have been malicious and were quashed by legislation. LGBT Financial LGBT veterans of the UK Ministry of Defence Recognition Scheme Armed Forces who were (MoD) dismissed or discharged because of the pre-2000 ban on homosexuality (Dismissed or Discharged Payment) and those negatively affected by the ban (Impact Payment). Infected Blood NHS patients who became Cabinet Office Compensation Scheme infected through receiving contaminated blood transfusions or products, and those affected such as family members and carers. Source: C&AG’s report, Figure 1

We also received written submissions from a range of different sources including voluntary sector organisations, academic and researchers as well as wider government stakeholders. A list of the written evidence is available on the inquiry page of the Committee’s website.3 In particular, the evidence we received has drawn to our attention the importance of: • clear, proactive communication throughout the claim process, by bodies administering schemes; • outlining clear assessment criteria for claimants; • simplifying compensation schemes where possible, and adopting a proportionate approach to assessing claims based on evidence provided; • adopting a more coherent approach to designing and delivering government compensation schemes that is user-centred; 3 Committee of Public Accounts, Government compensation schemes: update written evidence 12 • the independent design and delivery of schemes, separate from the body responsible for causing the original harm to victims; and • schemes providing more comprehensive support for victims during the claim process, including legal support.

By February 2026, the government had paid around £3.5 billion in total across the seven schemes examined by the NAO, with up to another £11.4 billion potentially yet to be paid. The Infected Blood Compensation Scheme alone is estimated to pay out £12.8 billion. Schemes differ in fundamental ways that affect their complexity and progress to date, including expected cohort size. Some Horizon schemes expect to receive hundreds of claims, for example, while the Infected Blood Compensation Scheme anticipates potentially tens of thousands.4

Some compensation schemes, such as the Windrush and some of the Horizon IT schemes, experienced significant issues in their early stages.5 For example, schemes’ initial assumptions about likely claim volumes and processing capacity were often wrong, contributing to backlogs and lengthened processing times.6 These schemes needed to make changes in how they operated as a result, such as introducing fixed sum awards and providing better support to victims, to improve the claim process for victims.7

There remains substantial variation across schemes in how long claims take to conclude, capacity for greater transparency and clarity during the claim process and scope for more structured and consistent cross- government learning.8 The independence of schemes, and their design and operation, is also still a concern for victims, as only the Infected Blood Compensation Scheme is run independently of the department or organisation responsible for the original harm.9 Victim trust and the independence of compensation schemes

Most respondents to our survey reported feeling the scheme they had experience of felt unfair, and 76% of people said the claim process was distressing or retraumatising. Over the first year of the Windrush compensation scheme, the Home Office received far fewer claims than 4 C&AG’s Report, para 5 5 C&AG’s Report, para 16 6 C&AG’s Report, para 7 7 C&AG’s Report, paras 10 and 16 8 C&AG’s Report, paras 8, 14 and 17 9 C&AG’s Report, para 12 13 expected, partly due to a lack of trust amongst victims. Some victims feared that engagement with the Home Office, as administrator of the scheme, may lead to immigration enforcement action. Many victims suffered harm due to the Home Office’s ‘hostile environment’ policies, which required them to demonstrate their lawful immigration status to access public services, housing and jobs.10 The Ministry of Defence (MoD), likewise, identified a low level of trust amongst victims of its discriminatory ban on LGBT service personnel, which has made it hard to engage with those veterans who may be eligible for financial recognition.11 The Windrush Commissioner, Reverend Clive Foster MBE, told us that having the department that caused the original harm as the administrator of a compensation scheme does not help build victim trust in a scheme, and that a level of independence is essential to build trust.12 Similarly, written evidence we received from Age UK, University of Leicester’s Legal Advice Clinic and Hackney Council all noted that compensation schemes should be independently administered rather than be administered by the bodies responsible for the original harm caused to victims.13

We asked the departments whether they agreed that having the body that caused the original harm administering the subsequent compensation scheme was a poor way to establish trust. The Home Office said that it understood why there is deep scepticism and lack of trust, as victims perceive that government departments are not trustworthy so would want an independent organisation to deliver redress. However, on balance, it was of the opinion that the body that has caused the harm should also be responsible for providing redress. In contrast, DBT said that, on the Horizon Shortfall Scheme, claimants low level of trust in Post Office Limited became apparent and it was a mistake in retrospect for them to administer the scheme.14 The Cabinet Office also stated that it established the Infected Blood Compensation Authority to administer the Infected Blood Compensation Scheme after reflecting on how you build trust and establish structures independent of the organisation that caused original harm.15

The Post Office Horizon IT Inquiry led by Sir Wyn Williams recommended that the government should establish a standing public body to “devise, administer and deliver schemes for providing financial redress” to persons harmed by the action or inaction of public bodies. The NAO made a similar recommendation, for a new standing public body to act as a compensating 10 C&AG’s Report, para 1.9 11 C&AG’s Report, para 3.20 12 Q5 13 GTS0008; GTS0011; GTS0014 14 Q 50 15 Q 72 14 authority to administer future time-limited compensation schemes.16 Professor Sir Jonathan Montgomery, professor of healthcare law at University College London and former chair of the expert group on the Infected Blood Compensation Scheme, spoke to us about establishing a redress commissioner or standing body that works with affected communities to set up schemes. He said that creating such structures could be beneficial in ensuring that future schemes could be created more quickly.17

We asked the Cabinet Office why there is still no permanent central body to oversee and advise how compensation schemes are administered. The Cabinet Office acknowledged the merits of a single body independently administering schemes in a consistent way but expressed concern that such an organisation could not build multiple bespoke or tailored schemes that are appropriate for victims. It asserted that it would need to be persuaded that the benefits of an independent body outweighed those of having bespoke and tailored schemes.18 We later asked the Cabinet Office for its assurance that it is open minded, however, about establishing an independent body to help design and deliver schemes, which it confirmed it is and that it is advising Ministers of the merits and challenges.19 The Departments also confirmed to us that DBT is chairing a ministerial group to consider options for improving future delivery of redress and explore the feasibility of an independent body.20 DBT previously announced that government plans to make a substantive statement on the matter by summer 2026, however, this has not materialised.21 Central oversight of compensation schemes and learning within government

Officials from compensation schemes across government attend eight- weekly meetings of a cross-Whitehall network to share updates on schemes, learning and best practice. The NAO’s report found that these meetings are helpful opportunities for Departments to raise questions on operational issues and policy design, which have led to improvements in earlier schemes and benefitted later ones.22 However, that there remains 16 Post Office Horizon IT Inquiry Final Report Volume 1, Recommendation 17, HC 1119, July 2025; C&AG Report, Lessons learned: Government compensation schemes, Session 2024–25, HC 121 17 Q 15-16 18 Q 106 19 Q 112 20 Q 109 21 C&AG’s Report, para 2.24 22 C&AG’s Report, para 2.27 15 no dedicated team within government that has central oversight of, or offers support to, bodies setting up or administering government compensation schemes. Without such oversight, the government risks losing its expertise in ensuring schemes operate in a timely, efficient and effective manner.23 Written evidence we received from Hackney Council also warned that without government making efforts to learn lessons from earlier compensation schemes, there is a risk that mistakes from earlier compensation schemes and injustices are repeated.24

We asked the Departments how they had learned lessons from what went wrong with earlier compensation schemes. DBT told us that it learnt lessons as it continued to administer the Horizon IT compensation schemes and applied the learning from earlier schemes to its more recent ones.25 For example, Sir Alan Bates criticised the Horizon Group Litigation Order Scheme, stating the scheme became very legalistic despite DBT’s assurances during co-design that it would not be. DBT now accepts it over-complicated the scheme and has applied this learning to its Capture Scheme26. It also explained it had learned from the Infected Blood Compensation Scheme when designing the Capture Scheme and referenced, in particular, its more broad and holistic assessment of claims.27 Similarly, the MoD said it engaged closely with earlier schemes, and learned a lot from the Windrush Scheme about case working and processing as well as the importance of considering the implications of financial recognition payments on benefit payments. The MoD also referenced the Cross-Whitehall Working Group and described it as bringing together expertise in government.28

Sir Alan Bates told us of the importance of establishing an organisation that learns lessons from those involved with compensation schemes, including for example victims and lawyers.29 Shaila Pal, Director of the King’s Legal Clinic at King’s College London and author of a comparative analysis of the Windrush Compensation Scheme, said that an advisory group with significant learning and knowledge of compensation schemes, that includes victims of other schemes, should be part of an independent body that devises future schemes.30 23 C&AG’s Report, para 17 24 GTS0014 25 Q50 26 The Capture Redress Scheme launched in October 2025. People may be able to apply for the Capture Redress Scheme if they suffered a financial shortfall as a result of the Capture software, which was installed in some Post Office branches between 1992 and 2000. 27 Qq 72 28 Q 101 29 Q 23 30 Q 19 16

We asked the Cabinet Office whether there should be a permanent body within government that is learning lessons from what went wrong with earlier schemes. Cabinet Office told us that it is the natural place for such learning, considering it is the cross-cutting and co-ordinating centre of government. It also said its wider work is trying to change the culture in government, preventing the need for future compensation schemes, but it acknowledged that learning lessons to change how government operates is very difficult.31 We also questioned the Cabinet Office on whether an independent body responsible for compensation schemes would be an effective repository of institutional memory. The Cabinet Office asserted that it is the responsibility of the departments of State to ensure government is retaining and sharing corporate knowledge. It also told us it is determined to learn the lessons of previous schemes and that it will be ready for any further compensation schemes that government decide to establish.32 31 Q 107 32 Qq 110, 111 17 2 Claimant experience on government compensation schemes Failure to consult impacted communities

The departments have not always launched schemes before gaining a clear understanding of issues facing affected communities. On the Horizon Shortfall Scheme, Post Office Limited initially expected only a few hundred applicants but by the initial claim deadline of November 2020 it had received 2,417 applications.33 Post Office Limited could not afford the total amount of compensation due at this point, which led it to pause the processing of claims.34 The scheme then reopened after this deadline and subsequently received over 10,000 more applications.35 On the Windrush Compensation Scheme, the Home Office announced changes to the scheme design in December 2020, following criticism about the scheme’s performance from Parliament and representatives of victims, and feedback from caseworkers. Changes included launching a £500,000 Windrush Community Fund to raise awareness of the Windrush schemes and address a widespread lack of trust in the Home Office that was deterring some people from claiming.36

Kate Burt, Chief Executive of the Haemophilia Society, told us that Government could have avoided problems experienced by the Infected Blood Compensation Scheme if it had early engagement with affected communities – before the scheme launched.37 She said that the Infected Blood Compensation Scheme was designed without victim involvement and stressed that co-design with victims is critical.38 Reverend Clive Foster also told us it is critical that impacted groups are involved in designing schemes from the outset, and that design is aligned with trauma-informed principles that consider how the claim process can be retraumatising for people. 33 C&AG’s report, Paras 2.7 & 2.8 34 C&AG’s report, Para 2.9 and 2.13 35 C&AG’s report, Para 1.19 36 Q81 37 Q9 38 Q16 18 Sir Alan Bates similarly stressed the importance of engaging victims and their representatives in designing schemes and processes and told us of his experience of co-design with DBT on the Horizon Group Litigation Order Scheme. Sir Alan said DBT had seemed to consider victims’ perspectives during co-design sessions, but despite this, the scheme then ended up looking very different to what was discussed.39 Shaila Pal went further by telling us that, not only should affected communities be involved in the design of schemes, but they should also receive funded legal advice to support them to engage in co-design.40

We asked the departments whether they agree that there needs to be more co-design with victims on future schemes as early as possible. The Cabinet Office told us that co-design is essential for compensation schemes, because it believes it is the only way schemes can build trust with victims and affected communities. It acknowledged that it is a core lesson and principle in building trust going forward. DBT and the MoD told us that they conducted co-design on the Horizon Group Litigation Order Scheme and the LGBT Financial Recognition Scheme respectively. The MoD gave the example of co-design resulting in it establishing the separate impact payment and the identification of priority cases. The MoD also echoed the Cabinet Office’s argument that co-design can build victim trust and confidence in a scheme. The Infected Blood Compensation Authority also told us it operates a community-driven design, where it engages with and consults affected communities before deciding on any significant design features of its scheme.41 Failure to deliver compensation to victims in a timely manner

The NAO’s report found that three schemes extended the time periods over which they are open to new claims after the schemes were launched, recognising that many eligible claimants had not applied within original timescales.42 It also found substantial variation across and within schemes in the time taken to resolve claims. There were 27 claims to the Windrush Compensation Scheme, as of January 2026, that had been in progress for between 12 and 18 months, and a further 15 claims which had been in progress for longer than 18 months, out of 528 claims in 39 Q5 40 Q 13 41 Q72 42 C&AG’s Report, para 9. 19 progress at the time.43 On the Horizon Shortfall Scheme, 2,049 claims were paid over a year after a claim was received—a fifth of all claims paid—and the longest claim settled took 1,395 working days.44

Peter Gibson, Chief Executive Officer of Fighting With Pride, expressed serious concern that government has not sufficiently resourced publicity and outreach on the LGBT Financial Recognition Scheme, or proactively identified and engaged eligible claimants. He told us that government should be doing all it can to identify eligible claimants before the scheme closes in December 2026, including contacting all eligible veterans, and that he felt its current efforts are insufficient.45 We also received written evidence from Hackney Council informing us that it is running drop-in sessions and outreach with potential Windrush Compensation Scheme claimants, in lieu of an effective national campaign. It said misinformation was allowed to spread in the community, which has led to confusion amongst victims as to the remit of the scheme, in the absence of a successful government campaign.46

We asked MoD why it has not written to all potentially eligible veterans through the LGBT Financial Recognition Scheme. MoD told us it was doing all it could to promote the scheme, but it could not contact all eligible veterans as service records were so fragmented.47 We also expressed concern that the deadline for applications of December 2026 may mean claimants miss out on financial recognition. MoD said in response it will continue to promote awareness of the scheme and referenced additional investment in a specialist to deliver outreach but did not address the cut-off date for applications. When asked whether the LGBT Financial Recognition Scheme could be extended if claims are submitted after December 2026, MoD said its focus was on maximising the number of claims submitted before the deadline and that it did not have a contingency in place. It also said that any extension to the scheme would require ministers to enact the necessary legislation.48

Representatives of victims told us that prolonged delays in settling claims were unacceptable and had serious consequences for victims. Reverend Clive Foster informed us that Windrush victims were waiting 14 months to get a result on a claim in 2020, and it was totally unacceptable 43 C&AG’s report para 7 44 C&AG’s Report, para 2.19 45 Qq 4, 22 46 Written evidence - GTS0008 47 Q 70 48 Qq 91, 92 20 how long people were waiting to get justice. Peter Gibson from Fighting With Pride also said that the delays at the start of the LGBT Financial Recognition Scheme led to a great deal of distrust.49

We asked the Departments why there is such substantial variation in the time taken to settle claims. DBT responded that it is waiting for people to submit full claims on the Horizon Compensation Schemes and it is keen to pay victims.50 The Home Office said that, on the Windrush Compensation Scheme, launching without case-working capacity was a serious issue that resulted in backlogs and completely unacceptable processing times, that needed improvement.51 The Home Office also told us it investigated why claims longer than 12 months were unresolved, which it attributed mainly to complex cases and claims with probate considerations.52 The Home Office agreed that claims should be resolved within a reasonable timeframe, stating that claims taking longer than 12 months to resolve were not acceptable.53 We asked both DBT and the Home Office how processing times had improved, with DBT attributing this to the introduction of fixed-sum offer payments and the Home Office crediting better resourcing and a single case worker approach.54 Finally, we asked the departments whether they agree that claims taking over 1,000 working days were unacceptable. The Home Office and DBT agreed, but both also stated that a lot of the longest claims are delayed because claimants want to pause or slow the process, because they are finding it distressing and retraumatising, and departments only progress claims at the pace victims want.55 Complex evidential requirements and legal support for claimants

Compensation schemes often require claimants to provide extensive evidence to demonstrate their eligibility for the scheme.56 However, the evidence we heard suggested that the evidential requirements on too many schemes have become overly burdensome and onerous for the claimants, and that in some instances they relate to records that no longer exist.57 The Windrush Commissioner told us that the level of evidence required 49 Q52 50 Q 80 51 Q 81 52 Q 81 53 Q81 54 Q 83 55 Q84 56 Q10 57 Q20 21 means claimants often need additional support to complete their applications, and that the absence of funded legal support creates barriers to accessing compensation.58 63% of respondents to our survey reflected that the overall process had felt “extremely difficult”, a further 23% found it “somewhat difficult”59. Respondents felt it was particularly unfair that the burden of gathering evidence fell on them when that evidence was already held by the body administering the scheme and responsible for their harm.

Sir Alan Bates told us that the Horizon schemes had become complex and legalistic in nature, increasing both the time taken to resolve cases and the cost of administering schemes60. He acknowledged that the Horizon schemes were intended to be nonlegalistic but had “got bogged down in lawyers”, which he said added complexity and increased costs.61 He told us that claimants have had to rely on legal representation to engage effectively with the process.62 The Horizon schemes place significant emphasis on formal evidence and structured assessment processes, meaning claimants often rely on legal representation to support their applications.63 Shaila Pal also told us that, without legal support, claimants may recover significantly less compensation; she cited evidence that awards of around £11,000 without legal representation can increase to around £80,000 where claimants have legal support.64

We also asked about differences between schemes in access to legal support. The Home Office told us that it was struck by the contrast between Windrush and the Horizon schemes in access to funded legal advice, explaining that Windrush was designed without funded legal support to avoid confrontational and retraumatising processes.65 MoD told us that it does not provide legal support on the LGBT Financial Recognition scheme because it was designed to operate without the need for legal representation.66 It explained that it provides funding to organisations such as Fighting With Pride and the Royal British Legion to support applicants.67 However, Peter Gibson from Fighting With Pride told us that applicants had struggled to engage with the scheme and that expectations had not been effectively managed, despite the support provided.68 We asked the Cabinet Office about the wider availability of legal advice for claimants, 58 Q5 59 Survey Q 60 Q6 61 Q5 62 Q6 63 C&AG’s report, Paras 2.35 & 2.5 64 Q10 65 Q87 66 Q88 67 Q70 68 Q22 22 and it told us that where schemes are highly complex and legalistic it can be appropriate for the state to provide funded legal support as part of scheme design.69 Scheme transparency and progress updates

Representatives of victims have expressed a need for greater transparency and clarity about how long the claims process is expected to take, and have been critical about the lack of information provided to victims about how long they might wait for an offer or how their claims were progressing.70 Despite the Infected Blood Compensation Scheme and the Windrush Compensation Scheme providing claimants with a single point of contact to support them and provide continuity during the claims process, representatives of victims still reported needing more clarity about how long a claimant can expect to wait and better communications during the process.71 Representatives of claimants to the Horizon Compensation Schemes also told the NAO that a lack of communication about how individuals’ claims are progressing causes significant stress and anxiety for people during the process.72

Peter Gibson from Fighting With Pride told us that the MoD initially promised victims regular updates during the claim process, but this did not come to fruition, and it also said the MoD launched the scheme without delivering its online case management system, that allows claimants to view the status of their claim and which generates automatic updates.73 The MoD told us it should have done more to manage expectations about the readiness of the scheme at launch and how long it would take claims to be processed. The MoD also explained that it launched the scheme without its online case management system being ready, so it could provide financial recognition payments to high-priority groups as quickly as possible.74 The Home Office also told us that Windrush claimants initially received little information about progress or timescales when the scheme launched, describing the scheme as a ‘black box’.75

Our survey of individuals with experience of government compensation schemes found that two-thirds of people had irregular or no communication during the claim process. Of total respondents to our survey, 53% felt 69 Q89 70 C&AG’s Report, para 14 71 C&AG’s Report, para 14 72 C&AG’s report, para 2.11 73 Q 15 74 Q 67 75 Q 93 23 the timescale to claim and next steps in the process were not regularly communicated to them during the process, and a further 13% reported seldom receiving regular communication.76 Written evidence we received from the Parliamentary and Health Service Ombudsman highlighted the importance of clear communication and engagement with claimants throughout the process, acknowledging in particular the potential trauma and lengthy time that an individual may have suffered for before being able to seek redress.77

We asked the Departments what feedback they had received from victims about transparency during the claim process and what it was doing to address feedback it received. DBT told us it amended the claim guidance on the Horizon Compensation Schemes, in response to feedback from claimants about wanting more information, and has considered an online tracker so claimants could view their progress. The Home Office similarly confirmed it is reflecting on whether it should make an online system for tracking claims that is easily accessible and transparent, rather than relying on an individual caseworker to update a claimant.78 We also pressed the Departments on whether an app would be useful so every claimant to a scheme could track the status and progress of their claim. The Cabinet Office agreed that an app would work in certain circumstances, but it advised that there are others where it would not – particularly when a claimant is very ill. It also acknowledged that it is its job to make sure that there are appropriate and transparent channels available that match the diversity of people claiming through schemes. DBT then echoed this point, asserting that claimants to the Capture Scheme, for example, prefer paper-based communication such as letters.79 76 See Annex: Summary of survey results 77 GTS0003 78 Qq 93, 94 79 Q 96 24