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News & Features

Motability Committee Meeting

Posted in General News on Thursday, March 8th, 2018

On Monday 5th March the Treasury and Work and pensions committees jointly hosted a meeting regarding Motability. Motability was criticised in the media in February over salaries paid to high level executives and the amount of reserves it held.

The committee questioned Lord Sterling (Chairman of Motability Charity), Declan O’Mahony (Chief Executive of Motability Charity), Neil Johnson (Non-Executive Chair of Motability Operations) and Mike Betts (CEO of Motability Operations) on governance, tax concessions and executive pay. The committee also questioned the Minister for Disabled People, Sarah Newton, on the Department for Work and Pensions role with Motability.

MPs will now ask the National Audit Office (NAO) to investigate Motability after concerns were raised about high executive pay and reserves. The MPs also confirmed that they would write to the NAO about the corporate governance arrangements between the charity and the company.

Motability Charity and Operations said they would welcome the review by the NAO.

In a statement, Lord Sterling said: “When the National Audit Office (NAO) reviewed Motability in 1996, we did – at that time – receive some public funds.  Today, we are not funded by government in any way, and we have never been public bodies, therefore, that means the Secretary of State has no power to require a review.

“However, we wish to have a review, and indeed wish it to be published, so that the issues raised in recent weeks can be put to rest once and for all.”

A Motability Operations spokesman said: “We also welcome the NAO review. In the meantime, it is important to clarify the issue on reserves. The £2.4bn quoted in the media is not sitting as cash – it is used to fund a 37% percentage of the £6.5bn worth of cars on the Scheme.

“If the Scheme did not self-fund to this level, it would increase the amount of borrowing required, as well as the likely interest rate, pushing up prices - without these reserves, borrowing costs would be over £80 million higher.

“The sum also acts as a ‘shock absorber’ to cushion customers against price rises should the Scheme experience an economic shock such as a sudden fall in used car prices.”

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Paul Simmonds's Gravatar
Paul Simmonds

Saturday, March, 10th, 2018

Hang on - not funded by the government in any way? Any direct way possibly, but they are paid by the government through our DLA or PIP.