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National Audit Office Publish Report into the Motability Scheme

National Audit Office Publish Report into the Motability Scheme

In May 2018, a report by the House of Commons Work and Pensions and Treasury select committees raised questions about the structures and governance of the Motability Scheme; government support for the scheme; the levels of reserves in Motability Operations; the remuneration of its senior staff; and the relationship between Motability and the Department for Work & Pensions.

Along with the Secretary of State for Work and Pensions, the Committees recommended that the National Audit Office (NAO) should carry out a review of the scheme. The NAO scrutinises public spending for Parliament and is independent of government.

The Motability Scheme, allows disabled people to exchange their mobility allowance to fund the lease of a new car, mobility scooter or electric wheelchair.

The now published National Audit Office report into the Motability Scheme considers the Motability scheme’s customer offer and performance; the scheme’s financial model, its impact and profitability; and the governance of the scheme and remuneration of Motability Operations’ senior management.

Disability Rights UK reports a summary of the NAO’s report findings and recommendations. Although Motability provides an “excellent” service, Motability Operations reserves are now so large that they stand at £2.6 billion. The report also discussed executive pay explaining that “Motability has had difficulty over a long period of time influencing Motability Operations to set executive pay at the levels the charity considers appropriate.” £15.3 million in bonuses was paid out to top executives of the company and Mike Betts, the chief executive of Motability Operations Ltd, was set to receive a £2.2 million bonus, in addition to his £1.7 million annual salary; which was previously described by MPs in a Guardian article in May 2018 as totally unacceptable by MPs.

The NAO recommends that “Motability develop and publish a long-term strategy, based on broad and open consultation, that sets out how it can put the significant income it expects to continue to receive from Motability Operations to best use,” noting that if Motability Operations adopted an approach more in line with other car leasing companies, it could hold a lower level of reserves and increase the level of funds available to distribute to the charity. The NAO concludes in its report that careful consideration is needed relating to the scheme’s governance and Motability Operations’ executive remuneration. The government also needs to regularly review the value of the support it provides, in light of its objectives for mobility allowances.

Following the news of Mr Betts’ bonus, Motability Operations Ltd announced that Mr Betts would stand down from his position by May 2020. The organisation’s chairman, Neil Johnson, will retire in April 2019.


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