BEFORE the coronavirus pandemic swept across the globe, more than one million Scots were living in relative poverty.

But as many face unemployment or being placed on furlough, warnings have been issued about soaring numbers of people racking up unmanageable debt.

Campaigners are now calling for a “different approach” to debt management that could involve some having to be written off – while Nicola Sturgeon has warned that “tinkering with the status quo may not be enough”.

Figures compiled before the Covid-19 outbreak revealed that 19 per cent of Scots, almost one in five, were in relative poverty after housing costs from 2016 to 2019. The figure for children was even higher, at 24% or 230,000 children.

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But as the outbreak squeezes Scotland’s economy, people have been laid off, seen pay cut or placed on furlough as part of the government’s job retention scheme.

Now there are fears the number of people experiencing poverty will soar and citizens will face high levels of debt.

Dr Jim McCormick, the associate director for Scotland at the Joseph Rowntree Foundation, an independent social change organisation, has warned that not everybody is being helped by the emergency funding packages put forward by the Scottish and UK governments.

Dr McCormick believes “people are already starting to worry about debt they are accumulating”.

He added: “The response from housing has been really impressive in terms of rough sleeping and taking off the table the threat of evictions. But people will still be concerned if they fall behind on their rent.

“We are going to have to have a really robust investment in the advice sector – but we are going to have to have a different approach to debt relief.

“When we look at rent and council tax, I think there’s going to have to be a decision made in the future between local government and governments to what proportion of this debt is reasonably recoverable.

“It’s not enough to say we have got those plans in place to furlough staff. We really have to put a lot of effort into looking at take-up to make sure people are getting support.”

The UK Government is covering 80% of salaries, up to £2,500 a month, for workers who are placed on furlough – with a similar scheme later announced for self-employed people.

But freelancers have warned they will miss out while Scottish fishermen have reportedly been forced to turn to food banks after a drop in demand for seafood.

With many facing unemployment and reduced hours and pay, people are applying for Universal Credit – with 1.2 million new applications made to the Department for Work and Pensions during the Covid-19 pandemic so far across the UK.

Dr McCormick said: “Universal credit is not going to be kicking in quickly for people.

“People could find themselves in arrears, just when we are trying to get to whatever is something like normal after this is over.

“It would be wise for governments to be planning now over a major response to it.”

He added: “If people are losing their jobs and are turning to the benefit system for the first time, there’s going to be a delay in them getting support.

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“There is not that awareness between advice providers and this new group of people who need support. For the newly-eligible, we need to make sure we are using a range of channels to identify people.”

That concern is shared by the Poverty Alliance, Scotland’s anti-poverty network.

Peter Kelly, director of the Poverty Alliance, said: “Paying for food and fuel, covering the rent, all of life’s essentials have become more difficult to pay for.

“The job retention scheme is very welcome, but a 20% cut in pay for many low-paid workers will be hard to bear. We also know that many people have already lost jobs, and are now facing the prospect a long wait for Universal Credit.”

"So it is critical that people access the support that is available, whether that is crisis payments from the Scottish Welfare Fund or the alternatives that are available for free school meals.

“However, this crisis has highlighted the weaknesses of our social safety net. As we come out of this crisis, we need to ensure our social security system is a genuine life raft that protects against poverty in times of need.”

With people being told to work from and stay at home wherever possible, concerns have been raised that many are at risk of slipping into fuel poverty, with heating and electricity bills set to rise.

Dr McCormick added: “What we are now seeing is real concern about fuel costs. We are not into the summer yet but all of us are going to have higher fuel bills than normal. "

In Glasgow and Edinburgh, rough sleepers have been temporarily moved into secure accommodation where they can self-isolate and socially distance safely – including hotel rooms.

Dr McCormick said: “At the furthest end of poverty, we are coming close to stopping rough sleeping – at least for the moment. There has been an extraordinary response to some aspects of this.

“Some households will see some increase in their incomes (through government support) but I suspect that is offset substantially by households going in the other direction. Not everyone is being furloughed – some people are losing their jobs entirely and council tax rises are kicking in now."

The First Minister has stressed that an overhaul of the support system is likely to be needed as we move out of the pandemic.

She said: “I do think that the current crisis we are facing and the fundamental impact that this crisis is having on how we live our lives – the economy, on every aspect of what we have taken for granted – means that coming out of this, governments are going to have to do some big, bold thinking about how we recover from this and how we support people along the way.

“People are being deeply hit and affected in a financial sense by this and simply tinkering with the status quo may not be enough to get us to a place of recovery as quickly as we want to do.”