Minister asks NAO and Commission to investigate Motability charity

09 Feb 2018 News

Esther McVey, work and pensions secretary

Work and pensions secretary Esther McVey has asked the National Audit Office (NAO) and the Charity Commission to investigate Motability after concerns were raised about its connected company.

Scrutiny over the charity began on Tuesday when the Daily Mail used figures from Motability Operations Group’s accounts for 2017 on its front cover, including that it was holding £2.4bn in reserves and paying its chief executive Mike Betts £1.7m a year.

According to its website the charity, Motability, "sets the strategic policies and direction of the Motability Scheme" which provides vehicles that have been adapted for disabled people. The charity contracts Motability Operations to run the scheme. 

In its initial response, the charity said the newspaper “totally misunderstood what this £2.4bn of reserves represents” and that Motability Operations independently decides Betts' pay based on the market for such a role.

It also disputed the Mail's assertion that the Betts' wage is publicly funded, saying Motability Operations is “categorically not funded by the public purse”.

Recent Charity Commission review 

The Charity Commission issued a statement on Tuesday saying it recently undertook a “detailed review” of the charity’s financial accounts and of its relationship with Motability Operations.

But the Commission said “That review did not identify regulatory concerns about the charity’s governance or its relationship with the commercial company.

“It is not for the Commission to comment on the pay of the chief executive of a large non-charitable commercial company.

“However, we have made clear to the trustees of the charity Motability that the pay of the chief executive of its commercial partner Motability Operations may be considered excessive and may raise reputational issues for the charity. These reputational issues are for the trustees to manage.”

McVey: 'Commission should look again'

In the House of Commons yesterday, McVey called for the Commission's review of Motability to be reopened and asked the NAO to investigate it as well.

Speaking in response to an urgent question from Labour MP John Mann, who repeated many of the Mail’s assertions, McVey recognised that the charity Motability and the company Motability Operations are separate entities but said the voluntary organisation “is wholly responsible for the strategic direction of the Motability scheme”.

She said: “In the light of the current focus on corporate governance issues and the use of public money, I have today asked the NAO to consider undertaking an investigation into this matter. I am keen for the NAO to look at how Motability is using taxpayers’ money.”

McVey said the Charity Commission “should again look into what has happened”.

“I would say that that review needs to start again,” she said.

She also agreed with a comment from Labour MP Liz McInnes, calling for her to “pay particular attention to the conduct of the trustees”.

Civil Society News has asked the Commission to respond to McVey's comments but it is yet to do so.

The Work and Pensions and Treasury select committees also announced they wished to jointly scrutinise “Motability bosses” in Parliament on 5 March.

A spokesperson for the Work and Pensions committee told Civil Society News the bosses it wished to scrutinise included the charity’s director Declan O’Mahony and its chair and founder Baron Sterling of Plaistow.

It also wished to question Betts and Motability Operations chair Neil Johnson.

Charity: There are inaccuracies 

Yesterday evening, the Motability charity said “a significant number of incorrect statements” were made during the Parliamentary debate and said it would be writing to McVey and other MPs to “refute every single inaccuracy”.

It made three points in a statement on its website:

  • The £2.4bn reserves are not held by the charity. They are held by Motability Operations, an independent company which is contracted to deliver the Motability Scheme on the ground.
  • Motability has absolutely no role in the eligibility criteria or award of mobility allowance to disabled people. That is – and always has been – the Department for Work and Pensions’ role.
  • Motability categorically does not receive “a direct grant from government” for the scheme. The Motability Scheme does not rely on government, or the taxpayer, for direct funding.

Company response

Motability Operations also published a response on its website, saying it is owned by a group of UK banks and does not receive government funding.

It said its reserves of £2.4bn “are not held in cash but are entirely invested in its fleet of around 630,000 cars”, which “provides a capital base that protects the business against risk”.

“Management is paid for performance, according to targets set by the board and agreed with shareholders,” it added.

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