Rashes can be caused by a variety of things - parasites (internal & external), allergies, or even genetic conditions that can be passed on. With so many different factors involved, you would really need to take your dog to the vet to be sure. Those scabs look painful for the dog and you wouldn't want it to get any worse.
The only suggestion I can give in the meantime is to make sure that your dog is on a good quality food. I think one of the main causes of rash is food allergies. Maybe someone else will come along with a suggestion shortly - but I know everyone will agree that you need to take your dog to the vet.
The initial visit should be around $50 - $70, I would think, and they won't do any treatments without your consent.
"Happiness is a warm puppy."