A taxpayer-supported disability car scheme has pledged to donate some £500m to its charitable division over the next two years, following criticism by MPs over its reserves and chief executive pay levels.
Motability, a part-taxpayer funded scheme which provides vehicles specifically adapted for use by disabled people, has committed to donating £500m to its charity arm, after it faced severe criticism from the work and pensions committee earlier in the year.
The scheme is run by Motability Operations, which is contracted to deliver the vehicles by Motability’s charity arm.
Motability Operations committed to making an initial £400m donation, which it said will be paid out of its profits this year. The company hopes to donate a further £100m to its charity arm next year.
It began making donations to the charity in 2010, and has since donated some £340m.
The Motability charity was first set up in 1977 by Lord Sterling of Plaistow. The Queen is its chief patron, while Theresa May and a number of former Prime Ministers number amongst its patrons.
Speaking at Motability's AGM this morning, Lord Sterling "thanked Motability Operations for once again delivering a splendid level of service to disabled people and their families" and said the charity governors "very much appreciate" the £400m charitable donation. He said this amount was "considerably higher than the charity was initially expecting".
MPs criticised organisation as ‘bloated’
In an evidence session in front of the committee in March, MPs were highly critical of the Motability Operations model, which was found to be holding more than £2.4bn in reserve as what its chief executive, Michael Betts, called a “financial shock absorber”.
Labour MP John Mann called the reserves model “bloated”, while Conservative MP Charlie Elphicke questioned why the operations side of Motability did not provide more funding to the charity.
“The variables all seem to be up, up and away since 2011 and yet each year you give the excellent charity £45m,” said Elphicke, noting that since 2012 Motability Operation’s cash in the bank had increased from “about £100m” to well over £1bn in 2017. “Don’t you think you could afford to be just a little bit more generous than just £45m and actually give more money to good causes?”
Concerns were also raised about Betts’ £1.7m in 2018 and about the £700m worth of tax reliefs the company enjoys through its connection to its charity arm.
The relationship between the operations and charitable arms of Motability were the subject of a Charity Commission inquiry which concluded in February of this year. The inquiry found no regulatory concerns at the organisation.