The most likely cause of these scabs and the itching if primarily located at the base of the tail or lower back is a flea problem. The best way to find fleas on a pet is with a flea comb. Fleas can move very quickly so a live flea can be very difficult to find. With a flea comb, the comb should catch any flea dirt present. The flea dirt is the black specks that are flea poop left behind by the fleas. Flea dirt is sufficient evidence to diagnose fleas.
In the face of not finding flea dirt of fleas, I would still recommend using a topical flea treatment -- the one I recommend first is Revolution as it also has an intestinal dewormer and heartworm treatment, but Advantix, Nexgard and Frontline are good products as well. This is applied between her shoulder blades so she cannot lick it off. Flea baths, collars and over the counter flea products honestly do not work, well if at all.
Other possible causes are allergies causing intense itching. The scabs would be secondary to her scratching or biting at herself. Like fleas, this often causes thinning hair in the area of the most intense itch. Dog can be allergic to indoor allergens, outdoor allergens, food proteins and flea bites. With a flea bite allergy, all it takes is one bite for a full blown itchy event to begin. There is a blood or skin test that can be done to determine if a pet is allergic to different things, although it is quite pricey and a good physical exam and question asking can typically narrow down that an allergy exists. The specific allergen is what is very difficult to pinpoint. If the itchy occurs at specific times of year and then improves at other times, a seasonal allergy is a more likely suspect than a food allergy since she is exposed to her food all the time.
The initial therapy for allergy relief is 1)Topical -- bathing with a oatmeal or benedryl or cortisone shampoo. Some of over the counter and some are prescription. They work by directly contacting the skin and soaking medication at the site of the itch. This is something that needs to be done continually -- not just when the symptoms show up. Topical therapy is used to keep the skin healthy and avoid flare ups. Some people are able to bathe twice monthly, some need to bathe weekly to manage symptoms. Also, each dogs reacts to the shampoos differently. Some benefits from an anti histamine shampoo where as others benefit more from an antibacterial shampoo like Malaseb.
2) Oral antihistamines -- this can start with benedryl 1 mg / pound (human benedryl is 25 mg per tablet or capsule unless extra strength). There are also other anti histamines available as benedryl only works in 1/3 of dogs. At this time, it sounds like your dog is beyond the need for benedryl. The next antihistamine most commonly used is hydroxyzine. Along with topical therapy, hydroxyzine can be very helpful. 3) Steroid treatment -- prednisone or a medication called temaril p which combines an antihistamine with a steroid and is very effective. The benefit of this medication is that the dose can be decreased or spread out more and more to see what the lowest effective dose your individual dog can be maintained at. Some dogs are only on doses every three days. 4) There is a newer medication on the market called Apoquel -- works great with dogs with indoor and outdoor allergies. It is truly a miracle drug for some dogs.
I also HIGHLY recommend essential fatty acid supplements as this helps strength the skin barrier . Usually vets carry a product but there are many out there -- some even OTC at petsmart or on DrFosterSmith online
You just want to be sure it has both 3 and 6 omega fatty acids.
There is also a product line called Douxo that I love for allergy pets. Here is a link if you want to look at the options: http://www.douxo.us/dermatology/douxo-dermatology-dogs-allergies-shampoo.html
They have sprays, gels, shampoos, conditioners
Food allergies are treated with a prescription diet trial. This prescription diet would help eliminate sources of protein that typically cause allergies. The diet trials last about 6-8 weeks and no other treats or people food can be given during this time. The proteins in the prescription diet are either 1) new to the pet, such as duck or salmon or 2) Processed to the point that the protein is small enough that the body will not react in an allergic way -- this is called a hydrolyzed diet.
If her has damaged her skin to the point that a secondary infection is present, then she may need an antibiotic as well, just in the short term. Then the above medications can also be used to stop her itch and prevent it from returning. There are a few different "allergy shots" that vets give. They are usually a long acting steroid. I prefer to not use this route as it is harder on the body and we cannot control the dose as well as we can with an oral product.
After you read this information, let me know what further questions you have prior to proceeding to the ratings page.