Motability... More like a business than a charity?

I stumbled upon the Motability annual report for 2015. It makes, um, interesting reading; in fact, I have found it rather shocking... 

Most people think of Motability as a charity, but in fact, the charity just 'oversees' the private, profit-making business run by its trading arm, Motability Operations Ltd. They themselves describe their "unique arrangement" with the DWP, whereby "disability allowances can be diverted directly to Motability Operations". They make absolutely shed-loads of money from re-selling the cars that disabled people have paid for on leases; they say they are "the largest supplier of used cars to the motor trade in the UK, selling around 220,000 cars each year".

Their revenue in 2015 was almost £4 billion, their declared profits were £210 million, plus equity/net assets of £2094 million. The five directors were paid about £3.5 million. All out of public money.

With profits like that, it seems to me that the charity is just a sort of front for the business... Tax-payers think PIP is going to disabled people to pay for their cars, but in fact a lot of it is going to 'fat cat' businessmen. One way to save money for the welfare budget would be to stop giving PIP payments to a profit-making company, and let a not-for-profit company run the scheme instead. 

And David Cameron and Ian Duncan Smith are patrons... 

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15 Replies

  • Shocking waste of tax payers money

  • I have a motability car, and I love the  convenience of having a brand new car, not having to worry about maintenance and repairs, and everything included in the cost.  But, the fact is it is an extremely expensive way to get a car.  I was kind of annoyed just recently to discover that other car lease companies have much cheaper similar cars to mine.   I almost certainly wont be getting another motability car when the current one is due to be returned.  If I do still want a new car, then I will seriously look at other car least companies.

  • I wondered about that. I only get the standard rate mobility component of PIP, and was a bit annoyed at first to realise I wouldn't qualify for Motability.... Then I realised how very expensive it is, compared to how I'm running a car now and how I could get a similar replacement. I guess it may offer better value if you need a specially adapted car...

    It's the charitable status of Motability that bothers me. I just think it's WRONG, pure and simple, for businesses to be making profits out of people's PIP Benefits - especially when the government is seeking to save money on the benefits bill by cutting what individuals get. Cut the profit first, I say.

  • Good find. I'm broadening my awareness of how pharm companies are also rigging the markets to maintain profits, at the cost of their customers health. "Take this low quality medicine with loads of side effects while we push governments to prevent you getting access to medicines you can source yourself."

    The whole process is starting to get more than a whiff of protectionism (actually, it's been there for decades.)

    I'm stopping myself from having a full blown rant. Oy vey...

  • Dreadful! How does that get through the Charity Commissioners I wonder.....

  • Me too. Quite a lot of charities have 'trading arms'. But generally these are set up to provide an income for the charity (eg Oxfam shops raise money for Oxfam's charitable work overseas). In this case, the charity seems to do nothing that couldn't be done by the business direct, except of course provide a 'front' that has a good reputation, and probably save them some tax.

  • I always said they over changed for the rental cars compared to private firms it that same with the chairs and mobility scooters over priced

  • In this very sad world, profit comes before absolutely everything!!! Just recently my wife and I have been looking into fostering, we couldn't believe that there are actual private companies that are making cash out of the misery of poor ill-used children and this government gives them the thumbs up!!! An absolute bloody disgrace, but for some people it's all about the money, nothing else!!

  • That's awful. I just do not think companies should be making profit out of vulnerable people.

  • Charities are obviously quite murky aren't they. This idea of patrons is highly questionable as they seem to restrict the charity's freedom to act.

  • Most charities aren't murky. My work involves contact with hundreds of charities each year, and it's almost unheard of for us to come across one where there's something iffy going on - well below 1%, probably closer to 0.1%. But this relationship between Motability the charity and Motability Operations the hugely profitable private business STINKS! There are huge conflicts of interest, I would have though. I may indeed give the Charity Commission a ring, if only to ask them if and why it's allowed. It gives charities a really bad name... And as the public sector is under more and more pressure, many people need help from charities more than ever, so stuff like this is very damaging.

  • That's a good bit of research!  I think I might go and live in a cave.  Nothing is as it seems anymore, or at least that's how it feels sometimes.  The profit motive always did rule, increasingly it totally dictates.  

  • I'll come with you, if it can be a cave by the sea somewhere sunny and warm?!

  • That is outrageous . If as you say public money was given to a not for profit organisation it would help towards the budget shortfall and save further welfare cuts 

  • Motability the charity give the contract for operating the car scheme on a rolling 7 year basis to Motability Operations which is a monopoly that has consistently made more than £200m per year out of disabled customers. There is a very cosy relationship between the two organisations which acts as a gravy train for the directors and Senior managers of both organisations. The profit and the unique VAT concessions enjoyed by the Scheme need to be investigated by the Public Accounts Committee and the NAO with a view to removing some of the worst excesses of the Scheme and introducing competition. Ultimately the scheme is making at least £1bn over the 5 year life of a government and this could be very useful in other areas of the DWP / Health budget!

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