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BREAKING NEWS: Motability clients set to benefit from £370m windfall

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End-users on the Motability Scheme could be in line to benefit from reduced prices and more suitable equipment after the group vowed to reduce its reserves and pledge millions to support disabled individuals and their families.

Motability Operations, the firm that runs the mobility equipment leasing scheme on behalf of the Motability charity, came under intense criticism from politicians and media last year when it was revealed that it had hoarded £2.5 billion of reserves.

The scheme is funded by the tax payer and was also criticised for paying its chief executive a £2m bonus, which it was accused of trying to hide.

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The National Audit Office called the level of reserves “intentionally conservative”, and two government committees said Motability Operations’ reserves are “out of proportion to the risks it faces”.

Following a lengthy review by the NAO and Treasury and Work & Pensions Committees, Motability Operations has now promised to reduce the levels of its reserves.

Motability Operations has pledged to release capital reserves by £370m and will use £100m of the release to directly support customers.

The balance of the remainder, along with all this year’s profits, will be donated to Motability to provide wider support for disabled people and their families.

Commenting on the decision, Nicky Morgan, Chair of the Treasury Committee, said: “As our Committees have concluded recently, Motability Operations’ significant financial reserves are difficult to square with the honourable objectives of the scheme.

“Last week’s announcement by Motability Operations – that it will release £370 million from its reserves to support customers and disabled people with mobility needs – is good news for members of the scheme.

“Motability Operations must now ensure that its customers will benefit from this either in the form of lower prices or more generous vehicular adaptations.”

Frank Field, Chair of the Work & Pensions Committee, said: “At long last and after months of chivvying by our committees and the NAO, Motability Operations has begun to accept that it can’t just sit there on piles of reserves built up thanks to the taxpayer’s unique support.

“That’s most welcome, but is only a first step. There is still a way to go before we are satisfied that Motability is even beginning to make the best use of its vast funds and privileged position, to provide the best possible service for disabled people.”

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Joe Peskett

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