SNP minister grilled on how £36 million in missing benefits money will be recovered

As exclusively revealed by The Scotsman last month, Shirley-Anne Somerville withdrew consent for the Department for Work and Pensions (DWP) to recover overpaid and fraudulent benefits from Scots welfare claimants.

The Cabinet secretary said new Westminster legislation was overly punitive and did not fit with Social Security Scotland’s (SSS) kinder ethos. However, this means Scotland’s benefits agency has been left with no immediate way to recover the £36m of debt.

At Tuesday’s Holyrood finance committee, convenor Kenneth Gibson asked the debt, saying The Scotsman’s report had “caused considerable concern among members of the committee”.

Ms Somerville said she had concerns about UK Labour’s law giving the DWP the “ability to take money away from people's bank accounts without due notice and consideration of their current circumstances”. She also described the ability to cancel driving licences as “punitive”.

“We did have a great deal of back and forth with the UK government about whether we could continue working on historical debt and we were unable to do so, which is why I declined further co-operation on that part of the Bill,” she said.

David Wallace, chief executive of SSS, said the existing system for debt recovery was built on “fairness, dignity and respect”. He said all debt recovery teams were “trauma trained” and would always seek to do “a voluntary recovery”.

If the debt has occurred through the fault of SSS, the agency will write that debt off, he added.

Labour MSP Michael Marra pushed Ms Somerville for figures on how much debt the agency had recovered. Mr Wallace told the committee that £300,000 of £10m of debt had been recouped in 2023/24, but for the past financial year this had risen to £1m.

Mr Marra pointed out this was a 10 per cent recovery rate. “Would you think that’s a success?” he added. Ms Somerville replied: “I think I will always challenge the agency, as indeed the agency challenges itself, to improve those numbers.”

Mr Marra pressed the social justice secretary on what exactly SSS plans to do with regards recovery the debt.

Ms Somerville said SSS needed information from the DWP on the nature of the debt, adding: “Until we get that information, it’s quite challenging to hypothecate where that goes.”

Mr Marra then asked “how long have you known about this?”, to which the Cabinet secretary replied “not very long”.

Conservative MSP Liz Smith asked Ms Somerville whether the £36m figure was accurate.

Ms Somerville replied: “I have no issue with the figure. I have issue with the interpretation that somehow meant the Scottish Government was just going to leave that to one side and not do anything about it.”

Ms Smith asked the Cabinet secretary how much of the money SSS would be able to recover, but Ms Somerville was unable to answer the question.

Under plans outlined in the proposed new Public Authorities (Fraud, Debt and Recovery) Bill, the DWP would have powers to retrieve owed money directly from a person’s bank account.

If they were without sufficient funds, the DWP could then impose sanctions such as applying to the court for the temporary suspension of their driving licence.

The dispute is detailed in letters acquired by The Scotsman from the DWP under Freedom of Information legislation.