MPs call for Motability boss’ £1.7m pay deal to be reviewed
MPS have attacked the £1.7m pay of the boss of a business that supplies cars to people with disabilities.
Earnings and the £2.4 billion cash reserves being “hoarded” by Motability Operations are “totally out of whack” with the reality of its position in the market, two powerful Commons committees found.
Chief executive officer Mike Betts enjoyed a 78% increase in his pay package in nine years – despite running a company that is a taxpayersupported monopoly with zero competition, the probe found.
The Work and Pensions and Treasury committees called for public spending watchdog the National Audit Office to conduct a review of the scheme.
Committee chairman Frank Field said: “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 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 the Motobility scheme, made up of the operations business and two charities, is a valuable service and currently helps hundreds of thousands of disabled people live more independently.
But they said that, while the people who lead it are clearly deeply invested in Motability’s honourable objectives, it is “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, 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.
“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, the committees found.
Its pay is benchmarked against FTSE 250 companies, but MPs said it was subject to few of their fundamental risks and challenges.
Nicky Morgan, who chairs the Treasury committee, said: “It seems that Motability may have lost its way.”
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; and it was happy to be reviewed by the NAO.