A group of MPs has criticised Motability’s commercial arm for failing to disclose a £2m bonus package paid to its chief executive, Mike Betts.
But the scheme has defended its remuneration decisions, which included a £1.7m salary package for Mr Betts.
In a meeting of the Treasury and Work and Pensions Committees, the NAO and heads of Motability last week, the mobility equipment leasing charity was criticised for its remuneration policies.
The hearing was part of an ongoing inquiry into the charity’s finances after it was revealed last year the Mr Betts’ salary is 10 times great than the Prime Minister’s.
The row led to a report by the National Audit Office (NAO) on Motability recommending how the scheme can reform.
The Charity’s chair, Lord Sterling of Plaistow, and director, Paul Atkinson, both said the scheme had taken on-board the report’s recommendations.
MP Charlie Elphicke challenged the transparency of Motability, citing part of the NAO’s report which said: “the chief executive continues to benefit from separate and additional remuneration arrangements, the full value of which has not been previously disclosed.”
Sir Amyas Morse, head of the NAO, said Motability had disclosed the level of detail it was legally obliged to.
Mr Elphicke hit back, saying: “I want to pick up on that, because it is important. We are talking about £2m of money that is not disclosed.”
According to the NAO report, Motability Operations had not disclosed in its annual accounts an incentive scheme for Mr Betts, who said,
before the report was published, he would be resigning.
Nicky Morgan, chair of the treasury committee, asked Lord Sterling about a letter he previously sent to the chair of Motability Operations, Neil Johnson, expressing concerns over pay and bonuses.
She said: “Are you disappointed that action to reduce pay in line with your requests has still not yet happened?”
Mr Sterling replied saying that he was not disappointed but that the board wants to have more influence in remuneration decisions in the future.
“In practice, we are comfortable with the present chairman, Neill Thomas. In practice, he is doing what the board feels comfortable with, but we want to be more involved in those decisions.”
Morgan criticised the charity and Motability Operations for having a “cosy relationship” when it ought to be an “arm’s length relationship”.
Sir Amyas said the body recommends that a basic review of the relationship between the charity and Motability Operations needs to take place.
Mr Sterling also said Motability would be reviewing its policy on how much say the charity has in decisions on reserves after the scheme was criticised for holding more than £2bn back.
He said: “The charity itself has instituted a full-blooded review of all the reserves, which the NAO is totally in the picture about, of course, with the full support of the board of Motability Operations.”
Image: Mike Betts, chief executive, Motability Operations / Image credit: parliament.tv