Compensation bill for abuse victims could reach €1.35bn

The bill for compensation paid to the victims of abuse in orphanages and industrial schools could reach €1.35 billion, the Dáil Public Accounts Committee has heard, write Martin Wall and Liam Reid

Comptroller and Auditor General John Purcell told the committee yesterday that around 14,600 people had made applications to the Residential Institutions Redress Board by the deadline last December.

He said that the current average payment made by the board was €76,000. Legal fees were adding around 20 per cent to this figure.

Mr Purcell said that it was clear that original estimates for the cost of the scheme drawn up by the Redress Board and the Department of Education "had been severely under-cooked".

The Department of Education estimated initially that the scheme would cost around €250 million. It later revised this figure to over €600 million. In 2003, the comptroller projected that the scheme could cost up to €1 billion.

As part of a deal reached in 2002 with the State, 18 religious congregations which managed the orphanages and industrial schools paid over €128 million in cash and property in return for an indemnity against future legal actions by former residents.

Chairman of the Public Accounts Committee, Michael Noonan of Fine Gael, said last night that the final bill for the Redress Board scheme could reach €1.35 billion - far higher than previous estimates.

The comptroller said he was confident the final bill would be in excess of €1 billion.

Mr Noonan said that there were qualifications surrounding the €1.35 billion estimate. He said the level of average payments could fall in the future, reducing the State's potential exposure. It could also emerge that more severe cases had been "front loaded" and that less severe cases came in later. However, he said that on the other hand it could emerge that the later applicants were people living abroad and that the average payment may not fall.

Mr Noonan said the contribution of the religious congregations amounted to around 10 per cent of the mid-range estimate for the final cost of the scheme.

Committee deputy chairman, Fianna Fáil TD John McGuinness, said the latest figures showed that the Department of Education's estimates "have been wholly inaccurate". "It does raise serious questions about how the whole process was engaged in," he said.

He added that the department had rejected the committee and the comptroller when they suggested the potential cost was up to €1 billion. "Now we see that the extent of the cases mean that, even if you took a middle of the road figure, the cost is going to be at least €1 billion."