SCOTLAND is bearing the brunt of the recession with jobless and poverty levels north of the Border increasing at a higher rate than in England, according to a new report.
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The hard-hitting new study showed that child poverty in Scotland had increased at double the rate of that for England during the last year of the recession.
Scottish Government ministers were also urged to improve services for low-income households in the report from the Joseph Rowntree Foundation.
However, the study accepted that the government had "little direct control" over economic and fiscal powers to get to grips with the problem.
The report, Monitoring Poverty and Social Exclusion in Scotland 2010, said that unemployment north of the Border was now higher than that for England, despite being lower than before the recession kicked-in.
Scotland's unemployment figure of 7.7 per cent during the first half of 2010 was at a 14-year high. England's jobless rate for the first six months of this year was around 6.8 per cent.
The report was published just weeks after official figures showed that 239,000 Scots were out of work. Scottish unemployment rose by another 25,000 between May and July this year - the equivalent of almost 300 people a day - and is now 49,000 higher than it was over the same period the year before.
According to the figures published by the Office of National Statistics, Scotland's jobless rate increased to 8.9 per cent and is higher than the UK average unemployment rate of 7.8 per cent.
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Meanwhile, the Joseph Rowntree Foundation study revealed that about 26 per cent of adults of working age in the city of Glasgow were being paid out-of-work benefits by November 2009. The figure for Dundee was 23 per cent and around 12 per cent in Edinburgh.
Child poverty rates in Scotland also went up by 2 per cent during the last year of the recession, compared to a 1 per cent hike for England.
The report said the Scottish Government should improve its anti-poverty strategy by driving up the living standards of the 600,000 working age adults who receive unemployment benefit.
Ministers were also urged to help those in low-income employment and to improve key services for poor families.
Research co-author Dr Peter Kenway said: "Although the UK government sets benefit, income tax and national insurance rates, the Scottish Government still needs to have explicit policy positions on these matters which are so crucial to poverty in Scotland."
However, the report also showed Scotland's overall child-poverty rate is still lower than England's. There were an average of 250,000 children in low-income households in Scotland over the last three years, 100,000 lower than in the mid-1990s.The study also found that the average of 130,000 Scottish pensioners in low-income households over the last three years is just half the level of the mid-1990s.
But Deputy First Minister Nicola Sturgeon seized on the report and claimed that only giving "full control of the tax and benefits" to Holyrood would tackle poverty in Scotland.
Ms Sturgeon said: "Although the UK government has chosen to slash planned funding for Scotland, this government is determined to do all we can to help the poorest families.
"In Scotland we have innovative home-grown policies such as school clothing grants, freezing council tax, free heating help, abolishing prescription charges and expanding concessionary travel schemes which are all helping make life better for families and elderly people.
"However full control of the tax and benefits system will enable us to tackle inequalities most effectively."
Labour's housing spokesperson, Mary Mulligan, predicted that Scotland's poverty rate would get worse due to the UK government's package of cuts.
He said: "This report makes it clear that poverty is affecting huge swathes of society in Scotland and is rightly critical of the failings in the Scottish government's anti-poverty programme.
"It also warns that the proposed Tory cuts in the benefits system will have a devastating effect on Scotland's poorest."
Tory finance spokesman Derek Brownlee said the figures showed a need to create more private-sector jobs.
He said: "These figures are further evidence of the urgent need for the Scottish Government to focus on job creation in the private sector, and to work with the UK government to get the business climate right.
"For some years now we have seen the rate of new business start-ups fall.
"If this continues, this depressing trend will continue."