£2.4 billion cash reserves and a considerable increase in CEO’s salary over the past decade have led to MPs calling for an audit of company's operations

Motability, the charity provider of lease cars, wheelchairs and scooters to disabled people, has come under fire over its financial operations. 

Motability Operations, which receives around £2 billion per year from the Department of Work and Pensions, has accrued a £2.4bn reserve in cash - a four-fold increase over 2008. Meanwhile, the salary of CEO Mike Betts increased by 78% over the same period, up to £1.7 million last year. Motability says this pay was based on comparison with FTSE 250 firms.

The company’s income comes from the Disability Living Allowance, War Pensioners’ Mobility Supplement or mobility component of the Personal Independence Payment of people with registered disabilities. More than 600,000 British citizens use the scheme.

No money comes directly from the Government, but Motability is granted exemption from VAT and Insurance Premium Tax, costing, the committees have revealed, £700 million annually to the Government.

MPs from the Treasury and Work and Pensions select committees have criticised Motability's operations, calling Betts’ salary “totally unacceptable” and describing the cash reserves the company holds as disproportionate to the risk it faces.

The committees have recommended an investigation from the National Audit Office (NAO), saying: “given Motability’s privileged position, the absence of competitive tendering, reliance on public funds and question marks over its approach, it has a clear responsibility to accept such a full-access review.”

Head of the Work and Pensions Committee, MP Frank Field, said: “The levels of pay pocketed by its executives and the cash reserves it is hoarding are totally out of whack with the reality of its position in the market.

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"That one member of staff is paid over ten times what the prime minister earns is one example of where Motability needs to get a grip of itself and realise the privileged position in which it trades.”

Given Motability’s status as a "taxpayer-supported monopoly" holder over its market, the committee has tasked the NAO to evaluate the company’s value-for-money to the taxpayer. 

Motability issued the following statement in response to the committee’s scrutiny: “We welcome that the report recognises that the scheme ‘provides an extremely valuable service to disabled people’ and one that has helped ‘millions of disabled people… have their lives greatly enhanced’.

“This reflects our priorities of always providing outstanding customer service, value for money and sustainability, and putting disabled people and their families on the road to freedom.

“The National Audit Office will now look at the scheme - something Motability the charity and Motability Operations had made clear they would welcome before the select committees began their inquiry.”

Responding via letter to MPs Nicky Morgan and Frank Field of the parliamentary committees, Motability co-founder Lord Sterling stated: "we at Motability wish to have a review and indeed wish it to be fully published so that the issues raised in recent weeks can be put to rest once and for all.”

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Comments
14

21 May 2018

Been trying to persuade a friend to come of this scheme. Paid £1,100 up front and £60 a week for a Ford Focus, this is more than some private PCP schemes AND bear in mind Motability don't pay VAT and IPT!! Yes you get TAX and a Service (about a £100 a year) and insurance (£250 a year)

Someone's making alot of money and it's at the expense of the disabled, don't know how they can sleep at night!!

typos1 - Just can’t respect opinion

21 May 2018
xxxx wrote:

Been trying to persuade a friend to come of this scheme. Paid £1,100 up front and £60 a week for a Ford Focus, this is more than some private PCP schemes AND bear in mind Motability don't pay VAT and IPT!! Yes you get TAX and a Service (about a £100 a year) and insurance (£250 a year)

Someone's making alot of money and it's at the expense of the disabled, don't know how they can sleep at night!!

I left the scheme a long time ago after getting fed up with the way I was treated by the people working at the dealerships, when it came time to return a car. I use a wheelchair and there was always scratches on the door sills caused by the wheelchair when lifting it in and out of the car and they did not like that one bit.

21 May 2018

 My Son has a Car, and it states in the blurb that you return it in a reasonable condition, now what reasonable means depends on who assess the vehicle come hand back or change over time and let’s face it you get a Car, there over 2,500 to choose from and all you are responsible for is keeping it clean and any damage done to it you have to pay for, seems to me it’s free transport, whereas you go for a PCP you’ve got a lot more to pay for, I mean no Tyres,serving no a Road Tax, no insurance just about anything you normally pay for is covered on motobility.....!

Peter Cavellini.

21 May 2018

"Tyres,serving no a Road Tax, no insurance"  set of tyres will almost certainly last more than 3 years, Tax - don't pay for 1st year 2nd and 3rd year might come to £60 for a 1.0 Ecoboost Fiesta so the only real saving is one service and 3 years insurance £1,000'ish.

Which is actually alot less than the VAT the 'charity'  don't pay!

Charity, my ars...

 

typos1 - Just can’t respect opinion

21 May 2018
xxxx wrote:

Been trying to persuade a friend to come of this scheme. Paid £1,100 up front and £60 a week for a Ford Focus, this is more than some private PCP schemes AND bear in mind Motability don't pay VAT and IPT!! Yes you get TAX and a Service (about a £100 a year) and insurance (£250 a year)

And the insurance cover won't provide a courtesy car if the vehicle is stolen, only if it needs accident repairs. I know this is the same for most car insurance policies, but surely for a disabled person this element of cover is vital, and the car users are only finding this out when they need it.

21 May 2018

Try buying your old car at the end of scheme, they ask for more than a dealer otherwise the car goes to auction. The only reason I can think of is so you get another motorability car of them and the dealer makes money on the sale of a good, well looked after car!!

typos1 - Just can’t respect opinion

21 May 2018

 well, if you like what you had before why not just take the same again or up down grade, so the dealer gets his wedge, nothing compared to what the higher up People who run the scheme, the higher people in some cases are getting paid ten times what Mrs May gets!, now that isn’t fair!!!

Peter Cavellini.

21 May 2018

You may not want to spend another average of £3500 a year on a Ford Focus/Asta etc!

typos1 - Just can’t respect opinion

FMS

21 May 2018

blah, blah, blah...still wittering on and on...go do some volunteering, if you have finished working.

A34

21 May 2018

... that handles 10% of UK car sales! 

I always laugh when some quango head says "my salary is equivalent to the the FTSE 250 equivalent". When their job isn't... what is the Motability competition from Germany or China? What are their challenges from shareholders? etc etc!

I don't sympathise with the PM though that the CEO is paid so much more than her. It is the government's job to govern... and clearly they have failed here. Why is "Motability" not something that individual dealers can offer (ie with competition) by themselves?

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