Two powerful committees of MPs have called for the National Audit Office (NAO) to investigate the way the Motability Scheme is run after condemning the £1.7 million salary of it chief executive and the £2.4 billion cash reserves it holds.
The Treasury Committee and the Work and Pensions Committee are questioning why there is such heavy state assistance for an organisation that has no competition.
Their report points out that Motability is exempt from VAT and insurance premium tax and “is the only private organisation entitled to receive welfare payments for the leasing of vehicles”.
Yet the total remuneration package of Mike Betts, Chief Executive of Motability Operations, increased by 78 per cent from £954,000 in 2008 to £1.7 million in 2017, which the MPs branded as “totally unacceptable”.
In addition the cash that Motability holds in reserve in case of a financial crisis increased by 328 per cent from £568 million in 2008 to £2.4 billion in 2017. The committees argue that these reserves are out of proportion to the risks it faces and that “Motability could well afford to reduce its prices, or make higher charitable donations.”
Frank Field MP, Chair of the Work and Pensions Committee, said:
"It is impossible to calculate the human happiness that has resulted from the freedom and independence that Motability scheme—the first and only scheme of its kind—offers disabled people.
“But the organisation operates as a monopoly that faces no competition in accessing disabled people’s often hard-won PIP benefits.
“The levels of pay pocketed by its executives and the cash reserves it is hoarding are totally out of whack with reality of its position in the market. 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.
“Its executives must co-operate with a full NAO investigation into the value it is offering the taxpayers who fund a significant chunk of its operations."
You can download the full report from the parliament website.
