In a briefing paper on the use of the Scottish Welfare Fund during the pandemic, the Poverty and Inequality Commission’s working group on responses to COVID-19 said it is “shocked that more of the funding available was not used to provide a much-needed lifeline for people battling hardship”.

The commission found that there had been a total of £8.6m of money from the Scottish Welfare Fund used between April and June this year, just 15% of the fund’s total budget of £57.6m for the year. Proportionally, the fund should have paid out 25% of its funding – the equivalent of £14.4m – during the same period, the commission argued.

The spending of the fund during lockdown was also £1.1m lower than the same period in 2019.

The Scottish Welfare Fund offers grants to people in need and is administered through local authorities.

Community care grants are issued to people to allow them to continue to live in their community, while crisis grants are often smaller and used to cover immediate emergency costs.

The commission has now called on the Scottish Government to set a minimum award amounts for applications and do more to improve its monitoring and evaluation of SWF administration.

It also said that the government should develop a national policy to provide support to people who have no recourse to public funds.

Poverty and Inequality Commission’s chair, Bill Scott, said: “The impact of the pandemic on those on low incomes has been drastic.

“In April, more than one in five people across Scotland said they were very or extremely concerned about being able to pay bills. We are seeing drastic increases in food parcel provision and emergency grants across the third sector.

“We know that local authority staff have been committed and worked diligently through a challenging time to meet the needs of vulnerable people. Yet, the SWF remains under-utilised, to the detriment of those who need access to its funding the most.”

He added: “It is unacceptable that the Scottish Welfare Fund is not being promoted properly and that known barriers to accessing this vital support still exist.

“People must know where to go for financial assistance and then receive necessary funding easily and with dignity.

“Our report raises a number of issues about the SWF that we will seek to resolve with the Scottish Government with the utmost urgency.”

A Scottish Government spokesman said: “We more than doubled the Scottish Welfare Fund to £80m this year to ensure there is additional financial support to people coping with the economic impacts of coronavirus. It is then administered and distributed by local authorities.

“It is important that awareness of the fund is high so that as many people as possible who need the support are able to access it when they need it.

“We thank the Poverty and Inequality Commission for their recommendations, which we will consider.”