Motability Operations, which runs the powerchair, mobility scooter and WAV hire scheme on behalf of the Motability charity, has responded to criticism from the Charity Commission and MPs, who were said to be ‘outraged’ at an alleged £2.4bn cash surplus acquired by the Group and the £1.7m salary it pays its chief.
Both Labour and Tory ministers criticised the scheme after the figures were revealed, with one saying it should charge end-users less for vehicles and that it is “outrageous” that the directors are paid “11 times what the Prime Minister gets”.
But Motability Operations has responded to the claims reminding critics that the Group is a commercial body rather than a charity and does not come under the Charity Commission’s jurisdiction as charity law regulator.
The Group released a statement and insisted the reported £2.4bn surplus is a necessary financial buffer. It also maintained that boss Mike Betts’ £1.7m salary is justified due to the scheme’s performance. AMP reported last month that the Group managed to turn over £4.2bn in its last financial period, but the number of powerchair and scooter customers dropped by 3%.
Motability Operations’ statement said the Motability scheme provides “an absolutely vital and important service to thousands of people across the UK”, after the Charity Commission released a statement claiming it had previously warned the Motability scheme over its finances.
The statement read: “The Charity Commission is aware of the issues reported in the media [on Tuesday] and indeed recently undertook a detailed review of the charity’s financial accounts and of its relationship with the non-charitable company Motability Operations. That review did not identify regulatory concerns about the charity’s governance or its relationship with the commercial company.
“It is not for the Commission to comment on the pay of the CEO of a large non charitable commercial company. However, we have made clear to the trustees of the charity Motability that the pay of the CEO of its commercial partner Motability Operations may be considered excessive and may raise reputational issues for the charity. These reputational issues are for the trustees to manage.
“We also made clear, following the conclusion of our review last year, that we consider the level of operating capital held by the company in order to guarantee the scheme to be conservative, and agreed with the charity, as part of its oversight of the scheme, that it would ensure this this matter is kept under continuous review.
“There is no further role for the Commission as regulator at this time.”