Last year, Scotland’s benefits agency encountered significant financial challenges, with overpayments to claimants totaling £14.25 million. This figure marks a substantial increase from the previous year’s £5.19 million, and these overpayments were attributed to either fraudulent activities or administrative errors.

The annual report and accounts from Social Security Scotland also highlighted a notable rise in its operational expenses, which surged by 9.9% to reach £291.1 million. A considerable portion of this increase, amounting to £21.5 million, was due to higher staff costs, including salary increments for senior officials such as Chief Executive David Wallace.

Amidst these financial pressures, the agency successfully distributed benefit payments to almost a million Scots during the year. However, concerns are mounting regarding a potential major benefits spending gap that the SNP Government may face in the future. The increase in benefit recipients has been partly linked to the agency’s ‘light-touch review process.’

Scottish Conservative social security spokesperson Alexander Stewart criticized the SNP for allowing government running costs to escalate while simultaneously implementing cuts to frontline services. He expressed disappointment over the lack of efforts to curb the expenses associated with highly-paid civil servants, despite previous promises of cost-saving measures.

It comes amid growing concerns about a looming major benefits spending gap facing the SNP Government in the coming years, while rising numbers of people receiving benefits in Scotland has been partially attributed to the ‘light-touch review process’ used.

Scottish Conservative social security Alexander Stewart said: ‘The SNP are imposing cuts to frontline services but have stood back and allowed government running costs to balloon. Despite promising savings, they’ve done nothing to rein in the cost of highly-paid civil servants.

‘The Nationalists have created a welfare spending gap that will be £2 billion by 2030. Thanks to their reluctance to introduce the assessments in place elsewhere in the UK, we’ve seen a massive rise in benefits overpayments.

‘This is a government constantly spending more taxpayers’ money on its own bureaucracy and failing to tackle the welfare bill, all while imposing cuts on essential services.’

Social Security Scotland revealed the huge amount of overpayments

The Social Security Scotland annual report and accounts said total overpayments detected in cases it administers were worth £14.25 million in 2024/25, with the largest amounts being £7.5 million for the adult disability payment and £4.5 million for the Scottish child payment.

This compares to £5.19 million of overpayments detected in 2023/24, including £1.9 million for the Scottish child payment and £1.7 million for adult disability payment.

Social Security Scotland said: ‘Due to the changing environment, more benefits are being directly administered by Social Security Scotland, therefore the number of overpayments has increased proportionality.

‘Following investment in additional error intervention activities, streamlining of processes and introduction of Performance Management approaches, combined with a growing, maturing benefit caseload, this has resulted in an increase in detected error.’

In addition, £12.2 million of errors were detected for Scottish cases by the Department for Work and Pensions for benefits it administers in 2024/25, as well as £7.4 million in 2023/24.

In a section of its annual report about fraud, Social Security Scotland said some internal and external individuals or groups may seek to ‘exploit weaknesses in our systems for financial gain’.

It said it has strengthened its approach to fraud prevention, enhanced data capabilities and invested in staff training to ‘help ensure that decisions on benefit applications are accurate and robust, reducing the potential for fraud and error’.

In 2024/25, total expenditure by Social Security Scotland was £291.1 million, compared to £264.9 million the previous year. Staffing costs increased over the period by 10.9 per cent from £196.5 million to £218 million.

The salary of its chief executive increased from £105,000-£110,000 in 2023/24 to £115-£120,000 last year, while his total costs including pension benefits increased from £160,000-£165,000 to £190,000-£195,000.

The annual report also reveals that there were 2,187 personal data incidents reported by staff in 2024/25, with 719 of these categorised as personal data breaches following assessment or investigation. This was an increase on 681 breaches in 2023/24 and 332 in 2022/23.

Social Security Scotland said: ‘We are maintaining efforts to understand root causes and identify preventative measures to try to reduce occurrences overall, while encouraging colleagues to continue reporting suspected incidents.

Scottish Conservative social security Alexander Stewart 

‘Following risk assessment and investigation, no personal data breaches were reported to the Information Commissioner’s Office in 2024/25.’

The total cost of devolved social security spending in Scotland is due to soar from £6.22 billion this year to £9 billion a year by the end of the decade.

The Fraser of Allander Institute has previously said the number of people receiving devolved disability benefits is forecast to rise from 648,000 in February 2019 to over 1.13 million by 2029/30. 

While it said the caseload for disability benefits is growing across the UK, it said that it is rising more rapidly in Scotland and highlighted that a “light-touch review process” has been introduced “where claimants can confirm their condition remains the same without needing to provide extensive new evidence”.

Social Security Scotland also highlighted a ‘client survey’ which found 91 per cent of those who received payments felt they were ‘treated with kindness’.

Mr Wallace said: ‘Putting our clients first remains at the heart of everything we do. We have made significant progress in improving the experience of our clients through reduced call waiting and processing times.

‘I was particularly pleased to see that 91 per cent of respondents to our most recent client survey said they were treated with kindness.

‘We remain focused on ensuring people get the money they are entitled to while continuing to treat people with dignity, fairness and respect.’