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Charity finance policy

The Tampon Tax: how not to provide sustainable funding for charities

After months of high profile campaigns, this week has brought the welcome news that the UK will no longer apply VAT onto women’s sanitary products. 

Post by CFG

This is fantastic news for women in the UK as well as for the women’s groups and charities that have campaigned for this change – it just goes to show what a good bit of advocacy can achieve. But with this announcement comes uncertainty over future funding of the charities providing vital services to victims of domestic abuse.

Bitter-sweet funding

tumblr_nxjg2zqO1m1uwsny1o1_500 In the Joint Autumn Statement and Spending Review, Osborne announced that £15m raised from the Tampon Tax would be made available as grants for women’s charities. In the Budget 2016 document the Treasury listed the organisations that had successfully bid for the grants. He also announced two grant-making partnerships – one with Comic Relief (£4m plus £1m match funding) and the Rosa Fund for Women (£2.2m for a ‘small grants fund) - to help disburse the tampon tax funding to grassroots women’s organisations across the country. This has put the very groups that had been campaigning strongly against the tax in a bitter-sweet position where they could benefit from a (albeit much needed) windfall from that very same tax.

Domestic abuse is not just a women’s problem

As many commentators noted, funding women’s services through a tax that only women pay suggests that domestic abuse is just a women’s problem. As Polly Neate, chief executive of Women’s Aid, wrote: whilst the much needed funding is welcome, “we need to be clear that domestic abuse is not just a women’s problem for taxation on women’s products to solve – it is an issue for everyone in society and men and women must address it together.”

An indication of government’s lack of strategic support

Providing funding for women’s charities through the Tampon Tax is also indicative of the Government’s lack of a long term strategy for women’s services. Now that the Tax has been scrapped, presumably government will no longer be providing further grants of this scale that are solely open to women’s services. Instead, these charities will continue to have to survive year-to-year, scraping together bits of funding to meet the needs of their beneficiaries. At a time when the smaller, specialist charities (such as, women’s refuges) are unable to compete with larger/national charities and private firms for public service contracts, grant funding is ever more important part of the funding mix.  This argument, and the evidence for it, is laid out by a new campaign, Grants for Good, of which CFG is a part.

 An issue for the wider voluntary sector

This lack of strategic funding is indicative of a trend in the government’s support of the charity sector more broadly. Funding for charities for the last five years has typically come from windfalls such as Libor Fines. This money has been allocated to individual charities that the Chancellor believes represents the “best of British values”. In the Budget on March 16th the Chancellor announced a further £45m over the next four years for military charities and other “good causes”. For the organisations that have benefited from this windfall this is good news in the short term. For example, Change Step, the Welsh mentoring and advice service for military veterans, would now be closed if it were not for the £500,000 it received from the Libor fines. But, as with the Tampon Tax, what happens when these funds dry up? Moreover, funding charities in this way has been criticised for its lack of transparency. Indeed, it can be seen that the Chancellor is allocating funds to those organisations that he personally deems worthy. CFG, with other leading sector bodies, has made the case that Libor fines could be better spent funding initiatives to improve commissioning practices and increasing impact across the board; rather than on an ad hoc basis.

The government needs to have a clearer strategy for the charity sector

I just want to end this post by emphasising that the removal of the Tampon Tax is a good thing. VAT should not have been applied to sanitary products in the first place. This unfair tax was in addition to the higher prices that women pay for products marketed specifically at women than men pay for similar, or identical, products. At the same time, the funding that women’s charities received from the tax provided much needed and welcome injection of funds for those services. But if the government wants to see women’s charities be financially sustainable, then a more strategic approach to their funding (and an improved strategy to tackling violence against women) is needed. The same is true for the charity sector more broadly. CFG has made, and will continue to make, the case that the government needs to have a positive agenda for the charity sector and provide a comprehensive package of support.

 

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