An estimated £14.8m of a carer's benefit is thought to have been overpaid in Scotland due to error and fraud, a report by the Auditor General has shown.
The Department for Work and Pensions calculated that 5.2 per cent of the £284 million paid out in Carer's Allowance in 2019/20 related to estimated error and fraud, which led to auditors qualifying Social Security Scotland's accounts.
The inherent risk of error and fraud in social security systems means an audit qualification is not unusual. The National Audit Office has qualified the annual accounts of the DWP for the last 31 years.
Social Security Scotland has improved error and fraud prevention and detection in the last year. But it remains reliant on the DWP for the delivery of much of the £3.5 billion it spends on benefits, and for the associated estimates of error and fraud. That increases the audit risk to Social Security Scotland's finances at a time when Covid-19's economic impact brings added uncertainty.
Stephen Boyle, Auditor General for Scotland, said:
Social Security Scotland has strengthened its error and fraud arrangements and reacted quickly to the immediate challenges posed by the pandemic, but there's still a lot of key work to be done.
It is now responsible for billions in complex benefits spending but remains heavily reliant on the DWP. Benefit spending may rise because of Covid-19, increasing the potential for greater error and fraud. And Social Security Scotland needs to think about what arrangements will be needed to manage that scenario.