Wednesday, 12 Dec 2018

Boss of a disabled car supplier, Motability stops after revealing a £ 2.2 million bonus

The boss of Motability, a taxpayer-funded company that provides modified cars to people with disabilities, resigned after discovering that he was waiting for a £ 2.2 million bonus.

MPs and their peers criticized Motability after Mike Betts' impressive salary of 1.7 million pounds was announced, 11 times more than the Prime Minister's.

However, a survey conducted by the National Audit Office (NAO) revealed that he was also ready for a premium of 1.86 million pounds in September and is expected to reach about 2.2 millions of pounds sterling by 2022.

The NAO accused the incentive scheme of charging customers £ 390 million "more than needed" since 2008.

Frank Field, Chair of the Committee for Work and Retirement, said: "It is appalling to learn that funds that could have been used to improve the lives of people with disabilities will fill their pockets."

Mike Betts' annual compensation of £ 1.7 million has recently been described as "totally unacceptable" by the Labor and Pension and Treasury Committees.

With only initial allowances of £ 258,000 already disclosed, Field said Motability Operations had "serious questions to answer" regarding evidence provided to a joint investigation panel earlier this year. year.

A spokesman for Motability Operations said Betts would resign as chief executive "following the implementation of agreed measures following the revision of the NAO."

It will be "no later than May 2020".

Motivability is made up of operational activities and two charities, representing around 10% of all new cars purchased in the UK.

The social assistance benefits to a person's mobility are transferred to motivational operations in return for a rented car, as well as insurance, maintenance and roadside assistance.

The NAO found that the compensation of corporate officers was "generous" and linked to performance targets set at "easily exceeded" levels since 2008.

The NAO has accused the incentive scheme of charging its customers £ 390 million "more than necessary" since 2008.

As a result, in the first seven years of a bonus system, five executive directors received a total of £ 15.3 million.

The Labor and Pension and Treasury Committees stated that potential rival firms could not compete with Motability because the government was giving them significant tax breaks to which no other company was entitled, and was not subject to any competitive pressure when calling for bids to run the program.

The NAO said Motability Operations' own forecasts of the future value of used cars were out of line with the market average, which led customers to charge £ 390 million "more than necessary" to cover rental costs since 2008.

The watchdog also found:

  • Motivation has generated more than 1 billion pounds of unplanned profits since 2008
  • As of March 31, the company held £ 2.62 billion in reserves;
  • It enjoys exclusive tax benefits of up to £ 888 million in 2017.
  • The rental prices offered to customers are generally 44% cheaper than the market price
  • Senior management is commended for achieving an overall satisfaction of 99%
  • Limited efforts have been made to understand why only 36% (614,000) of eligible customers use the system.

Sir Amyas Morse, head of the NAO, said that there was "something to be proud of" at Motability, but stakeholders, including the government, need to consider the project in depth ", especially if its "governance and accountability mechanisms are strong" enough.

A spokesman for the Ministry of Labor and Pensions said the NAO report "reinforced our concerns about the financial model of Motability Operations" and insisted that the department committed to working with this charity to achieve "better results for people with disabilities".

In response to the report, the charity Motability said it will "look to improve mechanisms to further influence the compensation of Motability Operations executives".

Lord Sterling, who co-founded the project, said in a statement that he accepted the recommendations of the monitoring group, while insisting that "there are still areas open to debate".

The finding that customers are overtaxed "is quite at odds with prices below the market price," he said.

Lord Sterling added, "Every penny spent on sustainability and for this great price and service helps to improve the lives of customers with disabilities in the system and their families."

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