I don't think you read TFA, which anyway had a misleading title. He would not be charged for his prison costs. It appears to be a factor in determining compensation.

It looks to me like they are basing it on how much he would have earned had he been free to work, in which context you can see the logic of deducting costs he would have incurred. I find this callous and despicable, but the problem is related to determining the value of a human life - there isn't really an answer, yet guidance is needed for consistency between cases.

How would you approach it?

I think £2m should be enough for a reasonably comfortable retirement in most of the UK, and that over 10 years is enough of a person's liberty taken to warrant providing that.

Should someone get more if they were a high earner?

I'd like compensation to come out of the DPP budget, to align incentives properly, but starving that department might result in less justice instead of more.