Estimating fraud and error in the Scottish social security system: Consultation

1. Introduction

Scottish Ministers and Accountable Officers have a legal duty under sections 14 and 15 of the Public Finance and Accountability (Scotland) Act 2000^[1] to ensure payments are made correctly and deliver value for money.

Audit Scotland’s 2021-22 annual report^[2] highlighted the need for Social Security Scotland to understand the levels of fraud and error within its caseload in line with other government departments delivering similar services. This activity would support the Scottish Government’s commitment to protect public resources, help identify any weaknesses in benefit processing, and improve systems and training. It would also help to identify and address the root causes of underpayments and overpayments, reducing administrative costs, ensuring better value for money and overall efficiency.

In response to this recommendation, Social Security Scotland reviewed the estimation methodologies used by DWP, the Department for Communities in Northern Ireland, and international approaches, developing options based on best practice and legislative requirements. The methodology chosen involves a regular programme of sampling, review, and analysis of selected cases within the wider benefit caseload to ensure accuracy.

As the Social Security (Scotland) Act 2018 (“the 2018 Act”) did not contain powers to request information directly from individuals selected for review, amendments were needed. Section 18 of the Social Security (Amendment) (Scotland) Act 2025 (“Information for Audit”) amends the 2018 Act to create new powers for Scottish Ministers to require individuals to provide information in order to audit the social security system as a whole.

This consultation seeks views on the regulations required to operationalise section 87B-E of the 2018 Act - exemptions, safeguards, and the processes that will apply when a case is selected for review. The aim of the proposals are to produce timely, statistically sound, repeatable measures of fraud and error to underpin assurance without placing unnecessary or unfair burdens on clients.