Benefit overpayments worth tens of millions of pounds could be written off due to the ‘values and ethos’ of SNP ministers.
The Scottish Government has ensured a UK-led crackdown will not apply to around £36million owed by welfare claimants north of the Border.
Social Security Secretary Shirley-Anne Somerville said Labour’s plans were ‘not compatible’ with the ‘fairness, dignity and respect’ she required.
She has yet to say if SNP ministers will claw back any overpayments from devolved benefits, once the UK Department for Work and Pensions (DWP) stops doing it on their behalf from next spring.
The Scottish Tories said not even trying was an ‘insult’ to hard-working taxpayers.
Social security spokesman Alexander Stewart said: ‘SNP ministers appear to have thrown in the towel at trying to recover these huge outstanding debts, which is an insult to hard-pressed taxpayers.
‘It is a complete dereliction of duty to not even bother clawing back millions that have been overpaid or fraudulently claimed.
‘No wonder Scotland has a ballooning and unaffordable benefits bill when the SNP Government won’t even try to recoup money fraudulently claimed or overpaid.’
The Scotsman published details of correspondence between the UK and Scottish governments containing profound disagreements over the issue.
Earlier this year, the UK Government announced the ‘biggest fraud crackdown in a generation’ aimed at the cheats who steal around £7billion from taxpayers each year.
The Public Authorities (Fraud, Error and Recovery) Bill also gives the DWP powers to recover money paid out by mistake. As a last resort, it can recover cash directly from people’s bank accounts or suspend their driving licence to make them pay.
The SNP rejected the methods as too harsh, and the UK Government changed the Bill to make sure they did not apply to devolved benefits.
In June, UK minister Andrew Western told Ms Somerville the DWP would stop recovering devolved debts in 2026, leaving SNP ministers to do it themselves or write off £36million.
‘The Scottish Government will need to consider whether these debt records should be transferred for further action or the remaining debt balances be written off,’ he wrote.
In the Holyrood chamber at 9pm on the second last day before summer recess began on June 28, Ms Somerville told MSPs what was going on but did not state the sum involved.
She said: ‘I recognise the duty of governments to ensure that overpayments are recovered, wherever it is reasonable to do so, but that cannot be at the expense of our values and ethos.
‘It would not be appropriate to recommend consent for the overpayment recovery provisions and I do not consider them compatible with the ethos of fairness, dignity and respect.’
She has yet to set out an alternative recovery plan – or even say if there will be one.
In January, Social Security Scotland chief executive David Wallace admitted his agency has ‘the powers to enforce deduction from ongoing benefits, but we have not yet used them’.
The Scottish Government said: ‘Social Security Scotland will always seek to recover overpayments wherever it is economic and reasonable to do so.’