Mrs McDougall called for a fund for UDR victims
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A report by the former interim victims commissioner has recommended the Memorial Fund for victims be phased out.
Bertha McDougall said it should be replaced by a more flexible fund, to be allocated £8m in the first year.
She said a more co-ordinated approach was needed and suggested consideration be given to setting up a fund for UDR families similar to the police fund.
She also recommended more compensation for those bereaved before 1988.
Spouses bereaved before that year should receive an annual payment of £2,000, she said.
Previous changes to the law made special financial allowance for those affected by the Troubles after 1988.
Mrs McDougall also advocated establishing a victims' forum highlighting issues of concern and a role for their representatives on bodies responsible for community planning when local government reforms come into effect in 2009.
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The real cost needs to be considered within the context of human suffering and the physical, emotional and psychological trauma inflicted on individuals and society as a whole
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She also criticised the government's "fragmented" approach to helping those suffering from trauma, and said the methods of delivering services were too complex.
"It is neither fair nor accurate to measure the cost of the Troubles in purely financial terms whether it be funding or service provision," she said.
"The real cost needs to be considered within the context of human suffering and the physical, emotional and psychological trauma inflicted on individuals and society as a whole.
"Better definition and identification of need coupled with co-ordinated implementation of services and appropriate funding is at the core of my recommendations."
Northern Ireland Secretary Peter Hain said the report was "excellent and fair".
"Bertha McDougall has produced a thorough report which makes a number of recommendations to advance the needs of victims and survivors," Mr Hain said.
"It is an important report which will help shape how we can move forward and I want to thank Mrs McDougall for remaining focused on the task at hand during what has been a difficult year."
However, Relatives for Justice, a group which represents families of people killed by the security forces or loyalists, criticised the report.
The group, which launched a High Court challenge to Mrs McDougall's appointment, described her recommendation for a fund for UDR widows as "offensive".
Spokesman Mark Thompson said: "Bertha McDougall has managed to display complete insensitivity towards those people who have been affected by state violence, particularly those people affected by the RIR and the UDR.
"This is a sectarian militia. It has a long history of involvement in sectarian murders and collusion."
Mark Kelly was one of those who met Mrs McDougall as she prepared her report.
He lost both legs in a UVF bomb attack in Glengormley in 1976.
"I have often said I don't consider myself a victim. Those who sadly lost their lives are the true victims, but certainly I would feel that, in some way, the system victimised us again in not being prepared to cope with our needs in a real way," he said.
"But as a society we all grow and there's the need to change and I think this particular report is a part of the reconciliation process."
Mrs McDougall's term of office is over and her report is now being made public.
Following a high court ruling that the manner of the appointment was unlawful, she has been permitted to publish her report in a personal capacity.
Mrs McDougall's husband, a police reservist, was murdered by the INLA in 1981.