Motability hands over £500m to its charity arm after ‘cash hoard’ row

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Motability Operations, which runs the powerchair, mobility scooter and WAV leasing scheme, will give a total of £500m to its charity arm, which offers grants to disabled people to access equipment.

The company, which is funded by the taxpayer, is involved in an ongoing row after it was criticised by politicians for supposedly “hoarding” more than £2bn and for paying its chief a £1.7m salary.

The National Audit Office (NAO) is currently scrutinising Motability Operations’ accounts to decide whether it is offering “value for money”.

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Motability Operations announced at its AGM yesterday that it will donate £400m now and another £100m next year, which will be paid from its profits.

Around 600,000 people use Motability and the company that runs the scheme made nearly £260m in pre-tax profits last year and reported more than £4bn in turnover.

The donation was made possible because of the “excellent operating performance delivered by Mike Betts”, according to Motability. It is understood that the group is also anticipating strong financial results this year.

Motability has previously defended Mike Betts’ £1.7m salary stating that it is justified because of the scheme’s performance and Mr Betts’ efforts in turning the business around when he took over.

Tory and Labour politicians have said that it is “outrageous” that directors are paid “11 times what the Prime Minister gets”.

Frank Field MP, Labour chairman for the Work and Pensions Committee, said that the donation is a “very good first payment” but added that it is “only a fifth of their enormous pile of spare cash”, according to a report by a national newspaper.

Concerns have been raised over the relationship between the operations and charitable arms of Motability and the £700m worth of tax reliefs the company enjoys through its connection to its charity arm.

But an inquiry by the Charity Commission found no regulatory concerns at the organisation. 

At Motability’s AGM, Lord Sterling, who founded the scheme, said that the charity is “well advanced in detailed consideration of the best use of [the donation]”.

The group said that it is looking at how it could use the charity’s additional money to enhance its offer and improve the specification of equipment.

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Joe Peskett

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