Dis­abled car sup­plier boss set for £2.2m bonus

Western Daily Press - - Uk & World News - NEIL LANCE­FIELD Press As­so­ci­a­tion

THE boss of a tax­payer-sup­ported busi­ness that sup­plies cars to peo­ple with dis­abil­i­ties is in line for a £2.2 mil­lion bonus, the Gov­ern­ment spend­ing watch­dog said.

An in­quiry into Mota­bil­ity by the Na­tional Au­dit Of­fice (NAO) also found that cus­tomers were charged £390 mil­lion more than was re­quired in their lease agree­ments to cover the costs of de­pre­ci­a­tion.

The scheme, made up of an op­er­a­tions busi­ness and two char­i­ties, ac­counts for about 10% of all new cars bought in the UK.

Mota­bil­ity Op­er­a­tions chief ex­ec­u­tive Mike Betts’ an­nual pay pack­age of £1.7 mil­lion was re­cently de­scribed as “to­tally un­ac­cept­able” by the Work and Pen­sions and Trea­sury com­mit­tees.

The NAO re­vealed that he is in line for a bonus which was worth £1.86 mil­lion in Septem­ber and is likely to reach about £2.2 mil­lion by 2022. This can be “re­leased at any time” and “may be of in­ter­est” to the Com­mons com­mit­tees, the watch­dog noted. Only the ini­tial al­lo­ca­tions of £258,000 have pre­vi­ously been dis­closed.

Un­der the Mota­bil­ity scheme, an in­di­vid­ual’s mo­bil­ity wel­fare pay­ments are trans­ferred to Mota­bil­ity Op­er­a­tions in re­turn for a leased car, along with in­sur­ance, main­te­nance and road­side as­sis­tance.

The Com­mons 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 when ten­der­ing for the con­tract to run the scheme.

The NAO found that re­mu­ner­a­tion for Mota­bil­ity Op­er­a­tions’ ex­ec­u­tive di­rec­tors has been “gen­er­ous” and linked to per­for­mance tar­gets set at lev­els “eas­ily ex­ceeded” since 2008. As a re­sult, in the first seven years of a bonus scheme, five ex­ec­u­tive di­rec­tors re­ceived £15.3 mil­lion in to­tal.

In let­ter pub­lished by the NAO, Mota­bil­ity chair­man Lord Ster­ling wrote to Neil John­son, chair­man of the op­er­a­tions busi­ness, warn­ing that the re­mu­ner­a­tion of ex­ec­u­tives is “too high”. He said that the scheme is “vul­ner­a­ble to at­tack” over pay lev­els, given that the busi­ness is “free of com­pe­ti­tion” and “en­joys a cap­tive cus­tomer base in a rel­a­tively sta­ble en­vi­ron­ment”.

The scheme has gen­er­ated more than £1 bil­lion of un­planned profit since 2008.

The NAO said Mota­bil­ity Op­er­a­tions’ own fore­casts on the fu­ture value of used cars have been out of line with the mar­ket av­er­age, re­sult­ing in cus­tomers be­ing charged £390 mil­lion “more than was re­quired” to cover lease costs.

As of March 31, the busi­ness held £2.62 bil­lion in re­serves, which is sig­nif­i­cantly higher than ma­jor car leas­ing com­pa­nies.

Mota­bil­ity ex­clu­sively ben­e­fits from cer­tain tax con­ces­sions worth up to £888 mil­lion in 2017, the re­port said.

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