Motability boss quits over pay scandal

Mike Betts, the CEO of Motability Operations, has today announced that he’s stepping down after previously undisclosed pay details came to light in a damning National Audit Office report. The report confirmed that in addition to a yearly salary of £1.7m, Betts is also in line for a bonus worth £1.86m in 2018, rising to £2.2m by 2022; only £268,000 of this vast total had previously been publicly revealed. The salary alone is 10 times what the Prime Minister earns and was described by one MP as “obscene”.

The Motability scheme enables disabled people to exchange some of their state benefit for a ‘worry-free’ motoring package, covering the car, comprehensive insurance, servicing and breakdown cover. The government pays the benefit, worth £59.75 per week, directly to Motability and also gives them generous tax breaks worth around £888m yearly. To be eligible for the scheme, you need to be in receipt of either the Enhanced Rate Mobility Component of Personal Independence Payment (PIP) or the Higher Rate Mobility Component of Disability Living Allowance (DLA). The scheme also provides for free or reduced cost adaptations to the cars if necessary. For many vehicles, you’re also required to make an Advance Payment up front, ranging from a few hundred to several thousand pounds. If you don’t want a car, the scheme also offers the opportunity to lease a scooter or motorised wheelchair.

The scheme is run by two organisations: the Motability charity is responsible for the strategic oversight and direction of the programme, whilst Motability Operations Ltd, a public limited company, operates the scheme through an exclusive rolling contract with the charity.

National Audit Office

In further troubling revelations, the National Audit Office report shows how:

Disabled customers were overcharged £390m on their car leases
Five executive directors of Motability Operations were paid a whopping £15.3m in total from 2008-2015
Motability Operations has generated £1.05 billion in ‘unplanned profit’ since 2008, bringing total profit from 2008 to 2017 to a staggering £2.19 billion
Motability Operations also has a ‘spare’ £2.62 billion sitting unused in its coffers
Only 36% of people eligible for the scheme take part; Motability has done “limited” research into understanding why this is, but they state they’ve “not been able to draw any firm conclusions”

The report comments on how senior staff at the charity lost control over the salaries of executives at Motability Operations; this meant that staff at the company could be paid vast sums that hugely outstrip those of executives at other similar organisations. Bonus pools too, were “extremely generous”, and although they were nominally linked to performance, the key performance indicators set were ones they were already easily over-achieving. That meant that in the last two years, bonuses have been paid on average at 93% of maximum; in comparison, bonuses in FTSE 250 companies were paid on average at 70-75% of maximum.

Lack of Diversity

Motability is also criticised for its lack of diversity amongst its governors. They have no black or minority ethnic governors and only one is a woman. Also, despite recommendations being made 15 years ago in 2003 that governors should serve no longer than 9 years, there are still 4 governors who’ve served for 16 years each.

These revelations are particularly uncomfortable right now, as the introduction of Personal Independence Payment (PIP) has drastically reduced the number of people eligible for a Motability car in the last few years. A Freedom of Information request in 2017 showed that half of DLA claimants who’d been reassessed lost their higher mobility rate support when they were moved over to PIP. For many, losing access to their car was devastating, with some being left suicidal by the loss. Motability has provided transitional support to those who’ve lost their cars after reassessment, enabling them to retain the car for a further 6 months or receive up to £2,000 as a one-off grant. But how much more could have been done with the money they have sitting around unused?

I’ve been a Motability customer myself since 2012 and I’m shocked and disgusted by today’s news. Don’t get me wrong, my Motability car is a lifeline and I love it, but how many disabled people could be helped by the money sitting ‘in reserve’ or if the bosses involved simply took a smaller salary? How many could have stayed on the scheme rather than being kicked off when their benefit changed? There are so many life-changing things that could be done with the billions that Motability Operations has seemingly lying around; I’m glad that Mike Betts has finally been shamed into stepping down, but is that really enough to make this situation okay? As Frank Field MP, Chair of the Government’s Work and Pension Committee, said: “it’s beyond appalling to learn that money that could have been used to improve the lives of disabled people will be lining his pockets instead.” I couldn’t put it better myself. Expect the consequences of this story to rumble on for some time.