Motability’s boss quits after attack on his £2m bonus
SHAMED Motability boss Mike Betts resigned yesterday after a watchdog’s scathing report revealed he is in line for a £2.2million bonus.
The 56-year-old chief executive said he will leave “as an outcome” of the stinging National Audit Office review.
Motability’s operations wing has come under fire repeatedly for paying huge salaries to senior management, and over its taxpayerfunded service to disabled drivers.
Yesterday’s NAO report accused the company of charging them nearly £400million more than agreed in the leases that they take out on Motability cars.
Damning
It also highlighted a “generous” bonus scheme that allowed five executive directors to share £15.3million in the seven years to 2015.
Last night, John O’Connell, chief executive of the TaxPayers’ Alliance, said: “This report from the NAO is damning.
“The vast tax concessions and benefit payments which Motability Operations enjoys have kept the good times rolling for those at the top.
“This organisation is desperately in need of reform and some proper corporate governance.”
Under the scheme, a driver’s mobility welfare payments are transferred to Motability Operations in return for a leased car, along with insurance, maintenance and roadside assistance. Mr Betts, whose £1.7million salary was branded “totally unacceptable” by two Commons committees, heads Motability Operations.
The NAO said the company’s forecasts on the future value of used cars were out of step with the market average. As a result, its customers – who account for ten per cent of new cars bought – were charged a total of £390million more than needed to cover lease costs. It meant that on March 31 this year, the company held £2.62billion in reserves.
Motability – set up by Tory peer Lord Sterling in 1977 – enjoyed tax concessions worth £888million last year.
Yesterday’s report includes a letter from Lord Sterling, who remains chairman of the whole group, to Neil Johnson, chairman of Motability Operations, warning that salaries are “too high”.
Motability announced shortly after its publication that Mr Betts will step down before May 2020 after completing changes he recommended.
Mr Johnson will leave next year.
Earlier this year, Tory MP Nigel Mills, of the Commons Public Accounts committee, accused Motability of “hoarding” what is “effectively public money”. He added: “They could charge disabled people less. Also, paying 11 times what the Prime Minister gets is outrageous.”
NAO chief Sir Amyas Morse said: “Stakeholders, including Government, need to give far-reaching consideration to the scheme.”
A Motability spokesman said it will “seek improved mechanisms to better influence Motability Operations’ executive remuneration”.
A Department for Work and Pensions spokeswoman said: “To ensure the scheme is focused on delivering better value for money, we are committed to working with the charity and key stakeholders.”
IT IS a matter of great shame that while money is still tight and public services are still feeling the pinch that Motability boss Mike Betts was in line for a £2.2million bonus. This newspaper welcomes his resignation. Worse still the National Audit Office has exposed Motability, which is supposed to help the vulnerable, of charging disabled drivers £400million more than they should have done for the service they are meant to provide.
This seems to be a case of profiteering at its worse and it raised questions about whether more of this sort of practice is going on behind the scenes. After years of austerity to get the public finances back in order the last thing people want to hear is that their hard work was wasted so that a greedy few could profit at the taxpayers’ expense.