Mutability Operations us a Private company abd, by law, has to bake a profit. it buys the cars, it doesn’t lease them, it buts them tgen leases them to Motability customers. They have to have a large profit to buy these xars in the first place and are subject to what they can sell them for at the end of the lease and if yiu have seen the mess some cone vack in, they have to cover those losses. As a public company, they pay their staff the going rate. It’s still within the pay tgat public companies and trades Unions pay their Cheif Executives and yiu shoukd look at the actual costs of local government senior officers. one thing I do think Motability the Charity shoukd do, is put the contract out to tender as it’s a closed contract
I’m afraid that you are factually incorrect in a number of respects. No private company has to make a profit ‘by law’. If that was the case, many thousands of companies in the U.K. would be operating illegally! Profits are, of course, desirable and required by owners (usually shareholders) but as Motability Operations derives all its income from state funded benefits, which are voluntarily surrender by the disabled people in receipt of them, I maintain that it is morally wrong that their business model results in such a big profit per lease.
Secondly, they don’t need ‘profit’ to buy cars, they need cash flow, which comes from the incoming PIP benefits and AP’s. They also need an operating surplus to aid buying but keep in mind that profit is what’s left after ALL of the things that you describe have been taken into account. They obviously need to cover all their costs, but they don’t need to be building up millions of profit that is over and above all their costs, yet that is what they do.
The next incorrect statement is that they pay the going rate for a public company. Firstly, Motability Operations is not a Public Company. I am also not talking about the CEO. I’m talking about ALL of their staff. Their pay levels, even for the most junior staff, are generous and their benefits package is another level altogether compared to what 90% plus of private sector companies provide nowadays. How many private companies still provide defined benefit pension schemes plus private health insurance plus bonuses etc etc etc? Very few. And, I repeat, that this is all funded by benefits surrendered by disabled people, very few of whom will enjoy such benefits themselves.
Don’t get me wrong. Motability is a great organisation and provides a great service for disabled people who, in most cases, would not be able to fund a new car. However, it is a fact that AP’s would be considerably lower if Motability Operations caught up with the times and reduced their remuneration package to something more ‘normal’. I don’t see why they need a gold plated package for every member of staff and I strongly feel that, given how they are funded, it is immoral that they do so. I do agree with your last comment though, that the Motability contract should not be a monopoly and should be put out to tender. No other company entering the market would be offering all their staff anything like the pay and benefits that Motability Operations have built up over the years and it should therefore follow that AP’s would drop. Any tender process would need to be robust though, ensuring that a key objective was that the customers should get a better deal than they do presently. It wouldn’t be difficult.