Motability

Margaret Greenwood Excerpts

Thursday 8th February 2018 Commons Chamber

[Ms McVey]

My hon. Friend raises a good point. This issue unites Members on both sides of the House. The first step is for the NAO to look into the matter, but my hon. Friend’s suggestions seem fair and right, and they are the kinds of points we should pursue.

[Margaret Greenwood (Wirral West) (Lab)]

I congratulate my hon. Friend the Member for Bassetlaw (John Mann) on securing this urgent question. I also thank you, Mr Speaker, for granting it.

The news that the chief executive of Motability Operations Group plc took home £1.7 million last year and that the group is sitting on reserves of £2.4 billion has shocked people around the country. Particularly shocked are disabled people, 51,000 of whom, according to Motability’s own figures, lost access to the scheme last year after being reassessed for their personal independence payment. More than 3,000 were reinstated on appeal, but many lost their car in the meantime.

From Carillion to Motability, excessive executive pay is completely out of hand. With Motability Operations Ltd paid about £2 billion a year directly by the Department for Work and Pensions on behalf of disabled people in receipt of social security support, there are serious questions for the Secretary of State to answer. When did she or her officials last meet with either Motability or Motability Operations Group? The National Council for Voluntary Organisations’ “Report of the Inquiry into Charity Senior Executive Pay and Guidance for Trustees on Setting Remuneration”, published in April 2014, says that charities should include their highest earners in their accounts, regardless of whether they work for a subsidiary company. Does the Secretary of State agree?

Motability Operations Group is sitting on a surplus of £2.4 billion. That is a staggering amount given its VAT exemption from the Treasury, which means that it does not compete on a level playing field.

When the National Audit Office last examined Motability in detail in 1996, it found that the then £61 million reserves

“exceeded the necessary margin of safety”.

What assessment has the Secretary of State made of the current necessary margin of safety, and what assessment has she made of the £200 million annual underspend that has allowed such a large surplus to accumulate? Given that the funding of Motability effectively comes from the taxpayer via social security payments, what assessment has she made of value for money for disabled people who rely on their cars for independence? Finally, value for money for taxpayers is not currently one of the criteria for Motability’s remuneration committee. Does the Secretary of State believe it should be?

[Ms McVey]

The Department has worked closely with Motability to ensure that disabled people get good value for money for the cars that they choose to spend their money on. The Charity Commission, which recently undertook a detailed review of the charity’s financial accounts and its relationship with the non-charitable company Motability Operations, said:

“That review did not identify regulatory concerns about the charity’s governance or its relationship with the commercial company. It is not for the Commission to comment on the pay of the CEO of a large non charitable commercial company. However, we have made clear to the trustees of the charity Motability that the pay of the CEO of its commercial partner Motability Operations may be considered excessive and may raise reputational issues for the charity.”

It also found

“the level of operating capital held by the company in order to guarantee the scheme to be conservative”,

but said that it should be “kept under continuous review.” I would say that that review needs to start again. The Charity Commission should again look into what has happened.

It is the Government who permit disabled people to have a benefit, but where that money is spent is always the choice of the people who receive it. When the scheme was originally set up in the 1970s, with cross-party support, that was deemed the best way forward, but as I said, the NAO must now look into the matter. When I personally looked into it in 2013, I ensured that Motability paid £175 million more to disabled people, and I will continue with that direct action from my new elevated position.