Tampons, taxes and the Treasury

18 March 2016 3 minute read

Wednesday’s Budget saw a welcome injection of funds to the charity sector: a total of £57m over the next four years dished out to military, health, and women’s charities. Less than 24 hours later we learned that the EU is on the verge of a deal to end the so-called ‘tampon tax’, the source of the £12m within that total allocated to women’s charities.

It seems that that the funding already announced will not be affected by the news: the Exchequer has already banked the money, and the Chancellor would be foolish to row back on such a public and popular announcement.

Whether or not we can expect more in future is a different matter. This story is indicative of some of the issues close to NPC’s heart: the need for more strategic funding for the charity sector, the impact of policy changes both on the sector itself and on the people it works with, and the choices funders of all kinds face when deciding where to channel their support.

A strategic approach?

One of the key challenges facing the charity sector is short-term funding, and the Government’s approach—a short-term injection of cash—does nothing to support the longer-term stability of the sector. The process of choosing the recipients of tampon tax funds was vague, with no indication of priorities beyond a catch-all criteria of benefiting women.

A continuing theme of our work is using evidence to inform decisions about funding, to ensure that funding flows reflect social need. Our 2008 report on violence against women highlighted the relative under-funding of this part of the sector, while our recent shared measurement report for Inspiring Impact showed with the example of domestic violence charity SafeLives the power of evidence in making the case for funding. We’d like to see a more strategic approach from Government, with clearer priorities and longer-term planning: if a need exists, it exists regardless of how much women are paying for tampons.

Wider policy change

At the same time, as this funding makes headlines, changes to housing benefit could potentially have a devastating effect on charities in the domestic violence sector and beyond. Like most of the supported housing sector, women’s refuges will suffer from plans to cap housing benefit at local housing allowance levels—reducing the funding per room per week from £300 to £60–100. Sector body Women’s Aid says refuges will not survive without exemption from the cap, and is lobbying for refuges to be exempt.

The choices funders face

How does the Government decide where to channel funding for the charity sector? The neat logic of using taxes paid by women to fund women’s charities has an obvious appeal, although it has come in for criticism for reinforcing the view that domestic violence is solely a women’s issue. No such link exists in the case of using LIBOR fines to fund military and health charities (beyond perhaps the idea that bankers equal bad and armed forces or hospitals equal good).

While military charities remain a popular cause with the public, NPC chief executives past and present have written  and spoken out about the challenges of fundraising for less popular causes. Again—as we called for in our 2015 Manifesto—we want to see these choices being made on evidence of need, rather than the apparent popularity of a cause.

Beyond the tampon tax

It was always a question of when, rather than if, this funding came to an end—and the ‘when’ looks to be much sooner than we thought. While the tampon tax will shortly be no more, the approach—of using specific sources of income to fund specific issues—seems to be a popular one within Government, and we can probably expect to see new versions in future. We hope to see a more strategic approach, a transparent process, and clearly defined priorities based on an assessment of need.