Boss of taxpayer funded disability scheme’s £1.7 million pay branded ‘unacceptable’ by MPs
MPs order Motability Scheme to ‘get a grip’ and urge government to carry out inquiry after it emerges boss of company earns over 10 times more than the prime minister
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Your support makes all the difference.A disability support scheme funded by taxpayers has been ordered to “get a grip” after it emerged the boss of the company earns over 10 times more than the prime minister.
MPs branded the £1.7 million pay of the head of a business that supplies cars and mobility vehicles to people with disabilities as unacceptable, saying it is “totally out of whack” with the reality of the company’s position in the market.
Chief executive officer Mike Betts enjoyed a 78 per cent increase in his pay package in nine years, despite running a company that is a taxpayer-supported monopoly with zero competition, the probe found.
The Motability Scheme, which is the only private organisation entitled to receive welfare payments for the leasing of mobility vehicles, has also been accused of “hoarding” £2.4 billion cash reserves.
The Work and Pensions and Treasury committees said the government must explain why state assistance in absence of competition was an appropriate use of public money, and called for the National Audit Office to conduct a review of the scheme.
Committee chairman Frank Field said: “It is impossible to calculate the human happiness that has resulted from the freedom and independence that Motability scheme – the first and only scheme of its kind – offers disabled people.
“But the organisation operates as a monopoly that faces no competition in accessing disabled people’s often hard-won personal independence payment benefits.
“The levels of pay pocketed by its executives and the cash reserves it is hoarding are totally out of whack with reality of its position in the market.
“That one member of staff is paid over 10 times what the prime minister earns is one example of where Motability needs to get a grip of itself and realise the privileged position in which it trades.”
MPs said that while the Motobility scheme was a valuable service it was “difficult to square” the high levels of executive pay and significant financial reserves it holds.
Under the scheme, an individual’s mobility welfare payments are transferred to Motability Operations in return for a leased car, along with insurance, maintenance and roadside assistance.
The committees said potential rivals cannot compete with the company because it receives substantial tax breaks from the government that no other firm is entitled to, and does not face any competitive pressure when tendering for the contract to run the scheme.
“Without any competitors on an equal footing, it is impossible to know whether disabled drivers would be able to access better loans elsewhere,” the report said.
Motability Operations’ reserves have grown continuously for the last 10 years to £2.4 billion, and “given its privileged market position” are out of proportion to the risks it faces, the committees found.
Its pay is benchmarked against FTSE 250 companies, but MPs said its unique status and income meant it was subject to few of the fundamental risks and challenges faced by such firms.
The firm could “well afford” to reduce its prices or make very substantially higher charitable donations, the report said.
Nicky Morgan, who chairs the Treasury committee, said: “It seems that Motability may have lost its way. DWP should ask the NAO to carry out a full inquiry into the value for money of the Motability Scheme.
”This could help ensure that those who rely on the scheme are able to access it on the best value terms.“
In a statement, Motability Operations – the charity behind Motability – said it welcomed that the report recognised the scheme provides an “extremely valuable service” to disabled people.
A spokesman added: “This reflects our priorities of always providing outstanding customer service, value for money, sustainability, and putting disabled people and their families on the road to freedom.
“The National Audit Office will now look at the scheme, something Motability the charity, and Motability Operations had made clear they would welcome before the select committees began their inquiry.”
A Department for Work and Pensions spokesperson said: “The Secretary of State has stated that Motability provides an extremely valuable service to disabled people but the levels of executive pay and financial reserves are concerning.
"Following her intervention, she is pleased agreement has now been secured for the NAO to look into this."
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