The Motability scheme has written to the Secretary of State for Work and Pensions defending its position after it was lashed by ministers in Parliament for allegedly stockpiling £2.4bn and paying its chief £1.7m.
Both the charity and Motability Operations Ltd, the commercial body that runs the mobility scooter and WAV leasing scheme on behalf of the charity, have challenged Esther McVey’s comments made in the Commons earlier this month, in separate letters addressed to the Secretary of State.
Ms McVey had called for an urgent review into Motability from the National Audit Office, which scrutinises public spending for Parliament, after an investigation detonated a barrage of criticism from the public, politicians and some members of the mobility industry. Calls were made to the Charity Commission to review the scheme but it has since announced it will not launch an investigation.
Chairman of the Motability Scheme, Lord Sterling, described many of the statements made in Parliament as “quite simply, untrue” and said the entire debate was “deeply flawed and misleading”. He noted that the £2.4bn stockpile is held in assets rather than in cash and challenged remarks made in the Commons claiming the scheme receives direct government funding.
Meanwhile, Neil Johnson, chairman of Motability Operations, admitted that the group’s boss, Mike Betts, was paid a total of £1.7m as part of his remuneration package in 2017, but denied that this was his salary.
Mr Johnson said: “An enterprise of this scale requires an experienced and professional leadership team capable of managing the risks associated with complex business owning and operating a fleet of vehicles worth £6.5bn.
“The quality of the current management team has been demonstrated by the Company’s excellent customer satisfaction rating, robust financial sustainability and customer affordability.”
The financial figures surrounding the saga have attracted widespread industry attention and have divided opinion on the scheme.
TPG DisableAids manging director Alastair Gibbs said that he believes that it is time for the exclusivity of access to DLA or PIP payments at source to be removed.
“Currently Motability are able to offer loan finance for cars, scooters and powerchairs and get the loan repayments directly from the source of the benefit before it is paid to the recipient. This means that the loan repayments are 100% guaranteed while the borrower is alive. They cannot be used elsewhere in preference to pay off other loans or debts and as such Motability carry very little risk.
“For this reason the loans should be at a competitive APR, but they are not because there is no competition. If that access were opened up to all bona fide loan companies registered with the FCA then true competition would exist.”
Meanwhile, Spencer Coe, managing director of retail multiple ScootaMart, said that the “huge profits” revealed in Motability’s latest financial accounts are a result of the car leasing scheme rather than the scooter and powerchair arm and so have “no bearing” on his business.
“They have been brilliant with customer care and support and completely changed people’s idea of Motability since they replaced Route 2 mobility about seven years ago. I have nothing but praise for them as they are dedicated to improvements and constantly tweaking things for the better. We never receive anything but positive feedback.”
A number of mobility dealers have been deterred from commenting for fear of putting their contracts with the Motability scheme at risk.