Indecent Assault in Primary School

A child I know recently started school. He came home with news that an older child had touched him "down there" before physically assaulting him and offering him money for his silence. The older child then went on to intimidate the young boy daily until he was identified.
The school handled it with care and urgency at first, but once they learned the identity of the child seemed to have left the matter alone purely because the older child admitted to everything except touching the younger child on the genitals.
The police were notified and agree the school has done all they can based on the age of the older child.
He has not been punished for at least the physical assault he admitted to, and the victim has been told it wouldn't have happened had he not gone into the older child's area in the playground.

Aside from this the young child still enjoys school and has settled in quite well, so removing him is not an option for the parents. They are, however, devastated that this has happened and is "being swept under the rug". Aside from counseling for the victim, does anyone have any advice on how to handle this matter as the parents don't like the fact it's been ignored and the victim has had the blame shifted onto them for where he was playing?