MPs criticise executive pay at company connected to Motability

The report of a joint inquiry by the Work and Pensions and Treasury select committees says the Motability Operations Group should re-evaluate how it uses its finances

High levels of executive pay at a company connected to the disability charity Motability are "totally unacceptable", MPs have said.

A report released today after a joint inquiry by the Work and Pensions and Treasury select committees says the charity and its connected company, the Motability Operations Group, should re-evaluate how they use their finances.

Motability, which runs a government-backed scheme to provide cars to disabled people, was criticised earlier this year after the Motability Operations Group was found to have paid its chief executive, Mike Betts, £1.7m in the year to 30 September 2017, including a long-term incentive scheme payment of almost £727,000.

The company also has reserves of £2.4bn, its accounts show.

The report says the salary received by Betts is "totally unacceptable" and the company’s reserves are out of proportion to the risks it faces.

"The people leading the scheme and its associated organisations are clearly deeply invested in Motability’s honourable objectives," the report says.

"Yet it is difficult to square the high levels of executive pay and financial reserves at the company that runs the scheme with its charitable objectives and the wider context of pressures on welfare expenditure. Motability badly needs a new roadmap for how it manages the scheme’s finances."

The report says that Motability bases its pay on comparisons with FTSE 250 companies, but adds that, as a "state-supported monopoly", it does not face a number of the "fundamental risks and stresses" faced by those companies.

Motability will be the subject of a National Audit Office investigation after the charity and company invited the NAO to carry out an inspection because of demands by MPs.

A joint statement from Motability and Motability Operations said: "We welcome that the report recognises that the scheme ‘provides an extremely valuable service to disabled people’ and one that has helped ‘millions of disabled people… have their lives greatly enhanced’.

"This reflects our priorities of always providing outstanding customer service, value for money, sustainability and putting disabled people and their families on the road to freedom.

"The NAO will now look at the scheme – something Motability, the charity, and Motability Operations had made clear they would welcome before the select committees began their inquiry."

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