Motability hits back at criticism over boss’s £1.7m salary and group’s £2.4bn ‘stockpile’

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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.

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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.”

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4 Comments

  1. Tony Jones said:

    Phenomenally disgusting. Is there no shame in any enterprise caught paying it’s executive these gross sums of salary, bonuses etc. for what exactly? This organisation exists renting cars and mobility vehicles to the disabled members of our society from a beneficial position as the government lets it, indeed guarantees payments to it from the benefits system to pay for the recipients rental payments, How easy and good does it get? No competition, no-one to bother it, no problem; don’t expect change here soon, though it should be ringing alarm bells and be changed asap to a charity that can be properly controlled.

  2. Alastair Gibbs said:

    The one single step change that would keep Motability Operations commercially competitive would be to allow all other approved finance providers to access the DLA or PIP allowance at source. By having the money paid directly to the finance company rather than to the client ensures there is no risk of default or temptation for the client to spend it elsewhere.

  3. sam said:

    I used to work with this company. Company meetings are full of how to avoid negative publicity, avoid attention by not doing direct marketing, 1% annual growth etc. Management is conservative in approach – mostly people who won’t get a similar job outside. Company has monopoly with no competition because of charity nature, avoiding VAT and bulk buying. Not market driven and perks of CEO and top management is decided by board from parent organisation Motability. It is like scratch my back.. No government, people or market control. 4 major banks were muscled into owning 25% each stock by govt but they get no profit so really not interested. This organisation should be disbanded and made market oriented. Management is horrible, technologies used are 10 years old, wasting millions on failed projects and lot of indirect corruption. Emphasis is on maintaining status quo than doing any real growth/improvement/efficiency.

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