Motability Mixes Business with Pleasurable Remuneration

Fleet of Vehicles

Motability is the umbrella for a series of organisations that  provide charitable grants to disabled people who would not otherwise be able to afford the vehicle or adaptations they need.

Motability is a registered charity No. 299745  with net assets of £154m and reserves of £109m.

Motability Operations Group is not a charity but is owned by  major banks Barclays, Lloyds and Royal Bank of Scotland. No dividends are payable to the owners and surpluses should ultimately be donated or revert to the charity. There are reserves in the operations group of £2,430m. The operations company is the delivery company under contract for the Royal Chartered Motability service.

Motability Tenth Anniversary Trust No. 328160 -is a separate charity with over £200m in reserves. The cost for managing  this fund is £1.9m yet they they have no employees.’

 Issues

  • This structure of corporate and charity vehicles allows large surpluses to be made on the secondhand car market, commissions from the sale of insurance and the ability to claim  £750m pa  in tax relief.
  • The Daily Mail revealed ‘Boss of car scheme for the disabled is on £1.7million… and YOU pay…  Motability last night declined to say if Mr Betts will be awarded a further £2.2 million bonus, and denied concealing details of its executives pay ‘. Their accounts maintain his pay is less than £1m.
  • MPs recently questioned Motability’s lavish salaries and the combined   £4.4billion reserves and large cash stockpile. The result is to be further National Audit Office investigations which already critisise excess lease costs.

Charity Commission Report

Earlier this year the commission undertook a detailed review of the charity’s financial accounts and of its relationship with the non-charitable company Motability Operations. The outcomes are still being investigated but the initial conclusions included:

  • ..the pay of the CEO of its commercial partner Motability Operations may be considered excessive and may raise reputational issues for the charity.
  • we consider the level of operating capital held by the company in order to guarantee the scheme to be cautious’
  • A parliamentary Joint Select Committee  subsequently published a report and ‘in the interests of transparency’, Motability Operations and Motability voluntarily agreed for the National Audit Office (NAO) to conduct a value for money review

Comment

The investigative media have a role in highlighting hypocrisy, arrogance and extravagance both of which abound in parts of the charity industry. However the industry must rely on trust in trustees.

Regulation is often fragmented and slow to catch up. It  takes too long to investigate and obtain action but we should be grateful there are still some gatekeepers.

 

 

 

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