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Motability’s fat cat bosses £1.7m pay! + £2b cash reserves
The Work and Pensions Committee are holding a Motability one-off evidence session on 5 March ...
The Committee will question the heads of Motability Operations Ltd and the Motability Charity following recent media reports on executive pay and the scheme’s finances. The Committees will also question DWP on its oversight of the Motability scheme.
Motability Director tells Select Committees ...
43% of the 175,000 Motability clients who have moved from DLA to PIP so far have had to leave the scheme because of a reduction in their benefit
https://www.mirror.co.uk/news/politics/tory-benefit-shake-up-forced-12132615.amp
Letter from the Work and Pensions and Treasury Committees seeks confirmation that the National Audit Office will undertake an investigation of Motability.
Motability Director tells Select Committees ...
43% of the 175,000 Motability clients who have moved from DLA to PIP so far have had to leave the scheme because of a reduction in their benefit
https://www.mirror.co.uk/news/politics/tory-benefit-shake-up-forced-12132615.amp
Isn’t this the real issue here? The rest, IMHO, is just smokescreen. One more jaded and world-wise than I might say that the idea of publicising the reserves and salary figures may lead members of the public to a conclusion that Motability can bail out all those that have been affected adversely by the PIP changes and thus making the government’s changes “alright” and lessening the true impact of what is clearly an enormous problem that Motability scheme users are facing. Though the salary is obscene (and is making some of those who kick leather around as a career jealous), the fact that 43% of scheme users are losing their independence is the real scandal.
Motability’s response is here: http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/work-and-pensions-committee/motability/written/79766.pdf
Apologies for the rant
Minutes of the Committee’s oral evidence session with Motability bosses and DWP are now available.
They include reference to disputes between Motability and DWP about the level of transitional package for people losing entitlement on moving to PIP. Sarah Newton has been asked to provide a series of letters on the issue along with other details.
I’d missed the Insurance Premium Tax exemption,
The answer to Q.6 is likely the ‘one.’
I thought the answers about the level of reserves were very convincing. Most being the value of the cars. The level of cash reserves was also well explained because of the level of risk and the need to repay a bond in November 2018.
Given the risks with so many people losing their HRM DLA on conversion to PIP and other factors like the falling price of used diesel cars, they may actually not have enough in reserves.
The answers about the top guy’s salary were less convincing, but his salary is a drop in the ocean if shared across service users. Wouldn’t even buy everyone a spare bulb, let alone a new tyre. As others say, it is being used as a sideshow to distract attention and scapegoat an otherwise invaluable scheme at a time when government is rightly being hammered for its appalling record on PIP.
I thought Sarah Newton’s comments were a classic case of trying to blame Motability and avoid any responsibility for the failures of PIP.
I have to say that my clients have had really very good experiences with Motability as of late when they have been challenging PIP decisions.
Those who are having a pop at Motability need to be careful what they are wishing for.
Motability have written to the Work and Pensions and Treasury Committees with additional evidence, including re remuneration and profits
I appreciate it’s never a good look to quote yourself but, from my earlier post on this thread…
...
The more immediate and concerning aspect for me is the contrast between the BBC allegation of excessive reserves and the Charity Commission comment re: sufficient operating capital. That smacks to me of the public beginning of a business case for “reform” to reduce eligibility.
I appreciate it’s never a good look to quote yourself but, from my earlier post on this thread…
...
The more immediate and concerning aspect for me is the contrast between the BBC allegation of excessive reserves and the Charity Commission comment re: sufficient operating capital. That smacks to me of the public beginning of a business case for “reform” to reduce eligibility.
I doubt it’s the eligibility that’s being looked at but more what one is eligible for…
“This is a money digging world of ours; and, as it is said, ‘there are more ways than one to skin a cat,’ so are there more ways than one of digging for money”
There has been a low key but noted trend this year in DWP decisions removing the relevant rate of PIP being followed rapidly and mysteriously by the (relatively) smooth award of Access To Work money for transport, with all the many limitations that imposes. I recall some of the higher profile cases have been in Scotland but I’ve certainly come across a few whilst on duty here and I’ve read of others across the UK. The trend is very much towards A2W being seen as the one size fits all solution for work and health and transport rather than having people flailing in different directions. The NAO investigation allows them to look at all aspects of the finances of Motability and within that you can assume it is open for them to add a little weight to the argument that there are better, “more tailored” solutions available through Access To Work.
I doubt we’ll see anything in the shortish term bar the removal of an overpaid fat cat with probably not that much of a reduction in the salary of his successor. In the long term I doubt its feasible for Motability to continue to exist as is in the current climate. Medium term, some aspects are clearly being mooted for what would effectively be a transfer to A2W. The idea of “giving” people (c. Daily Mail et al) cars in a climate of door to door and personalised transport being the buzz words (along with cuts obviously) is edging towards having had its day.
We’ve been here numerous times before.
Create negative publicity and change the public and political mood by nudging that taxpayer’s money being wasted on excessive pay and reserves and then change the eligibility criteria for Motability as public sympathy will enable that.
Depressing that the Opposition don’t appear to see what might be coming with this; indeed, some of them have joined the hue and cry.
If Motability eligibility is restricted, it will be very bad news for people who have already been clobbered by welfare reform and Motability has done great things to help disabled people lead more independent lives.
Could not agree more Neil re: the opposition. The dog whistle remains depressingly effective in politics.
Perhaps the scheme will be replaced by a government guaranteed Personal Financing system?
A bit like student ‘loans?’
The current system is a large scheme operating in a monopoly environment.
It’s also Banking - hence the salary.
If there’s one thing I know about cars it’s this - new cars is not a business about selling cars - it’s about selling finance.
The current model is about providing vehicles and service packages to a predetermined price.
Then there’s the fact that car ownership is expected to decline in the future due to uber and lyft etc.
For banking see bond issuance terms below.
https://uk.reuters.com/article/idUKL3N0YP4RS20150603
Motability issued a new 20 year sterling bond at a time when we were looking to increase credit risk in
the fund and we added to our exposure through the new issue. However the most significant new
issue came at the end of March with the launch of the latest Retail Charity Bond, this was to fund the
Charities Aid Foundation (CAF). This gave the fund the opportunity to add to its Charity Exposure and
to invest in a charity whose mission is to “motivate society to give ever more effectively, helping to
transform lives and communities around the world” The core social outcome related to their enabling
of giving to charities through providing donors with simple and attractive conduit to giving. Given the
current climate in the UK charity sector - low government funding and limited access to finance,
particularly for smaller charities – CAF also provides important services to the sector.
http://www.columbiathreadneedle.co.uk/media/9894443/en_social_bond_quarterly_fund_q1_16_report.pdf
A Retail Charity Bond provides charitable organisations with a simple and affordable way to raise unsecured loan finance through the retail bond market for amounts starting from £10 million. For established charities with strong credit worth it offers a lighter alternative to bank debt, as well as the opportunity to engage with a wide audience of individual investors.
The bonds are issued by a special purpose vehicle, Retail Charity Bonds plc. The issuing vehicle is governed by a board of directors with significant experience in the financial and charitable sectors, acting on a pro-bono basis. This independent board will review applications by appropriate, established charitable organisations seeking loan finance.
Retail Charity Bonds plc’s only business is issuing bonds, lending the proceeds to UK charities and related operations, and it has no employees. Its administration is undertaken by Allia Impact Finance under a services agreement.
http://www.retailcharitybonds.co.uk/