December 4, 2018 at 2:12 pm #66708
Friday sees the National Audit Office (NAO) publish its report into Motability Operations.
There has been some reports in the press relating bonuses paid to directors. I am not going to post any links. Sorry.
Expect TV and Print to take up the story.
December 5, 2018 at 8:04 pm #66827
I am also confused by the Press reports perhaps you can shed some light
If not a charity how does Mobility obtain the reported tax breaks it receives, or doesn’t it receive tax breaks?
The press reports that Mobility self audits how can this so if a Limited CompanyDecember 5, 2018 at 8:08 pm #66828
No mention of any Charitable status
Motability Operations Group plc is the parent company of:
Motability Operations Limited
Motability Leasing Limited
Motability Hire Purchase Limited
MO Reinsurance Limited.
Motability Operations Limited is the main operating company and principal service provider to Motability and the Motability Scheme.
The Motability Operations Group plc Board
The Board is chaired by Independent Non Executive Chairman Neil Johnson OBE.
2 Executive Directors
5 Independent Non-Executive Directors, one of whom is a Senior Independent Director
4 Non-Executive Directors
The Motability Operations Group plc Board has the following Committees reporting into it:
Executive Committee: Chaired by Executive Director, Mike Betts
Audit Committee: Chaired by Independent Non Executive Director, Chris Lendrum CBE
Remuneration Committee: Chaired by Independent Non Executive Director, Neill Thomas
Nomination Committee: Chaired by Independent Non Executive Chairman, Neil Johnson OBEDecember 5, 2018 at 8:18 pm #66829
Motability has charity status. Motability Operations is the company they appoint to run the scheme, buy the vehicles, collect the payments etc.December 5, 2018 at 8:33 pm #66830
From the Mobility web site
Motability is a national charity, registered in England and Wales (No 299745) which can provide Charitable Grants to disabled people who would otherwise struggle to afford the mobility solution they need.December 5, 2018 at 10:30 pm #66831
You guys are confusing Motability (the charity) with Motability Operations (the company).December 6, 2018 at 9:29 am #66840
Leaving politics aside for a minute what I would like to know is what Motability intended to do with the 400 million handshake they were given by operations.
We must not lose sight of that.December 6, 2018 at 9:51 am #66841
“As is usual, the Charity, in its role, is well advanced in detailed consideration of the best use of these monies. Much work has already been done in researching and evaluating the areas which will best help disabled people and their families, and final decisions will be taken in the coming months.
For example, the Charity is, in particular, heavily engaged in examining how to enhance the existing Wheelchair Accessible Vehicle offer, improving the specification of vehicles to provide a more user-friendly experience for disabled people and their families. Furthermore, we are examining how to expand and enhance our Drive from Wheelchair vehicle programme as well as providing more support for complex adaptations. In addition, the pilot with Family Fund is making good progress. Family Fund are selecting children with a profound disability who are under the age of three and are therefore ineligible for DLA (Disability Living Allowance), who would benefit from the use of a vehicle provided by Motability Operations.”
I guess we’ll find out ‘Soon™’…December 6, 2018 at 10:38 am #66844
I think the pilot with FF is a brilliant one tbh.
The kind of rule as it stands is ridiculous and clearly thought up by someone with no special needs experience.
Until you’ve tried putting a 2 year old in a car seat who’s digging their claws into your face or biting your cheek in amongst an Asda car park they have absolutely no idea just how hard a sn under 3 can be. A problem that’s easily solved if they never had to come out of their chair in the first place.December 6, 2018 at 12:09 pm #66847
a lot of the issues people have are down to the fact they cant tell the difference between motability the charity and motability operations the limited company. when it was set up operations should have been made far more distinct from the charity. and of course many of those making judgements cant read a balance sheet.
they forget that whilst there is an asset the cars worth 6bn, there is finance owed on those cars which is paid for with our allowances in part but theres still a balance at the end of the lease paid when the car is sold hopefully for more than the remaining finance. which is fine when 2nd hand car prices are bouyant but when they drop drastically like deisels have recently thats a potential problem. your 6bn assett is suddenly down to 4bn or less.
so the rediculous figures bandied about by the likes of the daily fail are invariably wrong.
but like many large businesses i will be interested to see what the nao say about staff and directors remuneration as it does on the surface seem to be well above average.
nice work if you can get it.
but i have to also say the service and support i have had has been second to none and i would hate for that to diminish just to satisfy some rabid journalist with an agenda.December 6, 2018 at 12:37 pm #66849
Now I have a better understanding, bit still a little confused, why is the NAO investigations a ltd company, from the Parliamentary reports one of the questions being ask why are the AP so high, I am reading between the lines is DWP looking for an excuse to cut cost and a reduction in payments to Mobility operations?December 6, 2018 at 12:50 pm #66850
What is so confusing is that the majority of the Press fail to make any distinction between the Charity and the Operating Company. A Charity with lots of money and a high earning CEO is a good story why clutter it up the facts a detail.December 6, 2018 at 2:08 pm #66858
I feel that if the name of the operations side was made more distinct from the charity side, people (including the DM) would say they’re trying to hide something. I feel that it’s better this way and the vast majority of people have no issues in differentiating between the two….I hope!
(Although I do know that some people with cognitive abilities get confused between the two, like a friend, who has MS.)December 6, 2018 at 2:26 pm #66859
“I am reading between the lines is DWP looking for an excuse to cut cost and a reduction in payments to Mobility operations?” <sic>
@oscarmax, if your statement were true, then the DWP would be considering reducing the DLA HRMC (DLA Higher Rate Mobility Component) or PIP ERM (PIP Enhanced Rate Mobility) components of those benefits. Not everybody uses the Motability Scheme and the payment of that component cannot be split into those that use the Motability Scheme and those that do not. Therefore, the DWP could not reduce payments to Motability Operations but rather reduce the overall DLA HRMC or PIP ERM component amount.December 6, 2018 at 2:27 pm #66860
They are able to investigate as when you sign up to join the Scheme the entitlement for your mobility award is paid directly to Motability Operations.
Motability Operations is well run and has improved the Scheme for both customers and partners. They have dealt with the transfer from DLA to PIP admirably and with a genuine compassion and empathy for the customer.
They do not have the risks of other businesses as they are the sole appointee to operate the Scheme. The numbers we read are huge, hundreds of millions and even billions of pounds. They buy 220 000 vehicles a year and have benefited from the buoyant second hand market, selling the cars for more than they estimated they would have been worth, thus building up a positive bank balance. If 220 000 vehicles sell for £1000 more than they estimate it will inflate the bank balance by £220 million pounds in one year. With nearly 650 000 vehicles on their books they do need a financial ‘buffer’ in case the secondary market collapses.
Motability Operations do not pay dividends, meaning the profits cannot be taken out of the business. They are however a little risk adverse, on their own admission, and a more fluid calculation regarding resale values would benefit the customer instantly by reducing the Advance Payment prices.December 6, 2018 at 2:36 pm #66862
Good post, @wmcforum.
I think they should be forgiven for their aversion to risk in the current climate but at all other times I would agree that they have been a little too careful. However, I’d rather it was run that way, pretty much guaranteeing future presence, rather than taking unnecessary risk and then having to ask the Treasury for a bailout.
I would echo that their recent performance in relation to the DLA/PIP changeover to be exemplary. I find it hard to think of a better way for them to have handled the situation bearing in mind how many parties they would have had to satisfy.
December 6, 2018 at 3:17 pm #66865
- This reply was modified 3 days, 23 hours ago by wmcforum. Reason: edited on request
My post above, second paragraph, it should read:
“I think they should be forgiven for their aversion to risk…”
I am unable to edit the above post and my OCD won’t allow me to leave it…like…that… 😝December 6, 2018 at 3:19 pm #66866
Rapster have a look at the Parliaments report you will understand it better than me, a section of it cover the area I mentions regarding high APDecember 6, 2018 at 3:53 pm #66869
@oscarmax, I read the report made by the Work and Pensions Committee (yes, in its entirety) and I am unable to find a mention of overly high AP’s and am only able to find one mention of the ‘additional sum’ (there is no mention of the terms ‘AP’ or ‘Advance Payment’), which is;
“In some cases, individuals will have to pay an additional sum of money upfront if their welfare payments are insufficient for the vehicle they wish to lease.” – ‘The Motability Scheme’ – First Joint Report of the Work and Pensions and Treasury Committees – HC847 – 21 May 2018
This is the PDF:
Found here:December 6, 2018 at 3:55 pm #66870
Ah, okay, I think you were referring to the Government’s response…?
—10 minutes later—
Nope, no mention of any of that either, just a confirmation from Esther McVey of the NAO involvement and a few other clarifications.
I guess we’ll just have to wait until the NAO returns their report tomorrow(?).December 6, 2018 at 4:13 pm #66871
I foresee some people (and the DM) being disappointed by the report due out tomorrow. I don’t think it’ll find much wrong with the scheme.
There. I said it. Take me out back and whip me.
Whip me until I begin to like it.
Then don’t stop.
The National Audit Office report, imaginatively titled ‘The Motability Scheme’, will be found here when released:
(You may have to search for it depending on when you find this post.)
Work in Progress – ‘The Motability Scheme’:December 6, 2018 at 4:56 pm #66874
Rapster our we seeing another side to you, did you to one of those strange public schools by the wayDecember 6, 2018 at 4:58 pm #66875
I’ll wait for the report in The Daily Mail, I enjoy a good bit of fictionDecember 6, 2018 at 8:40 pm #66890December 7, 2018 at 5:48 am #66910
Direct link to full NAO report (pdf):
Summary report direct link (pdf)
NAO Press Release:December 7, 2018 at 6:31 am #66913
The recommendations are –
- Develop and publish a long-term strategy, based on broad and open consultation,
that sets out how it can put the significant income it expects to continue to receive
from Motability Operations to best use.
- Address all of the findings of its recent governance review and report transparently
on the changes it makes as a result. It should publish an update on this in early
2020, once all changes have been implemented.
- Commission external benchmarking on the level of reserves held at Motability
Operations based on comparable companies in similar industries on a global
basis, both regulated and unregulated. Such benchmarking should go beyond
establishing adequacy and should also assess how conservative the level is
relative to that held by the company’s peers.
- Carry out a review of the performance framework for the scheme, recognising that
it is in a uniquely advantaged position, and that targets, including those linked to
Motability Operations’ executive directors’ remuneration, have continuously been
exceeded for many years.
Motability Operations should:
- Provide greater ongoing transparency through its annual report and accounts
about the total value of the performance bonuses it pays to its executive directors,
including the cumulative value of its long-term incentive plans, and the performance
criteria used to determine these bonuses.
- Review its approach to forecasting to understand why it has consistently under-estimated profit over the last decade, so that it can better plan for future distributions of profit.
The government should:
- Review the value and impact of the support it provides for the scheme at an
appropriate frequency, in light of its overarching objectives for mobility allowances.
- Work with Motability and Motability Operations to enhance promotion of the
scheme, and support more extensive research into eligible people who do not
use the scheme.