Fat cat boss of disabled car charity QUITS after his £1.7m salary and £2m ‘loyalty bonus’ sparked outrage… but fears remain he could stay for another 17 MONTHS until he is replaced
- Fat cat boss of Motability finally quit last night after a damning official inquiry
- Mike Betts would be standing down after 16 years as chief executive
- But he could cling to his post for another 17 months while successor is found
The fat cat boss of Motability finally quit last night after a damning official inquiry into the firm which supplies taxpayer-funded cars for the disabled.
Mike Betts’ decision came after the investigation revealed his company had been overcharging customers while hoarding billions of pounds.
Motability Operations confirmed he would be standing down after 16 years as chief executive.
The fat cat boss of Motability finally quit last night. Mike Betts’ (left) decision came after the investigation revealed his company had been overcharging customers
But there was anger when it emerged Mr Betts – who also faced claims he was given a secret £2million bonus on top of his £1.7million pay package – could cling to his post for another 17 months while a successor is found.
Labour MP John Mann said: ‘If this man had a shred of decency, he would walk away in shame now. Clinging on another few months is a slap in the face for disabled people whose benefits line his pocket.’
But there was anger when it emerged Mr Betts (pictured with his wife) could cling to his post for another 17 months
Yesterday’s National Audit Office report follows a long-running Mail investigation into a string of scandals at Motability, which has led senior politicians from all parties to call for his head.
The report, which is formally published today, found that:
- Disabled customers had been overcharged by £390million due to blunders by managers;
- The firm had racked up a whopping £1.05billion in ‘unplanned profits’ despite being a publicly-funded service for the needy;
- It had hushed up a £2million bonus to its chief executive Mr Betts – on top of his £1.7million pay package;
- It had amassed a ‘spare’ £2.62billion, with the enormous reserves having built up because an average of about £200million goes unspent every year.
Motability was set up in 1977 to help the disabled get around by leasing a car, scooter or powered wheelchair in return for part of their disability allowance.
The Motability shambles laid bare
The Daily Mail’s investigation into Motability triggered an inquiry by the National Audit Office, whose forensic accountants have spent six months going through the books. Here are their key findings:
- £1BILLION ‘UNPLANNED PROFITS’: Motability amassed £1.05billion since 2008. This mountain of spare money – all from the public purse – could pay for 48,000 nurses or 55,000 police officers a year.
- OVERCHARGING DISABLED PEOPLE: The NAO said £390million of its ‘unplanned profits’ came from charging customers too much for their cars.
- ‘SECRET’ MILLIONS FOR BANKS: High street banks are creaming off millions a year in charges. Motability Operations is owned by Lloyds, Barclays, HSBC and RBS. They are not allowed to take dividends but the reports reveal fixed-interest payments on loans of £696,500, management fees of £750,000 – and a previously undisclosed £17million in ‘transaction fees’ on average each year.
- NEARLY £3BILLION IN RESERVES: Despite being a charity scheme for the disabled, Motability has amassed a ‘spare’ £2.62billion because an average of about £200million goes unspent every year.
- CHARITY CAN’T COPE WITH SO MUCH CASH: The Motability charity is struggling to cope with a £500million donation from Motability Operations.
- TIME TO REVIEW £888MILLION TAX BREAK: Ministers ‘should review’ generous tax breaks, the report recommends. The VAT break was introduced to help Motability to help disabled people but gives Motability such a competitive advantage that its profits have soared.
- SECRET BONUS: A scheme for Mike Betts to pocket a £2million bonus was exposed by the watchdog. The NAO added it ‘may be of interest’ to MPs who grilled Mr Betts about his pay back in March.
- FAT CAT DIRECTORS: Those who run Motability Operations earn vast sums dwarfing the salaries of top charity bosses who are on an average of £255,000.
- CHARITY CHIEFS LOST CONTROL OF EXECUTIVE PAY: The charity responsible for oversight of the Motability scheme lost control of the money, the Audit Office report suggests.
Around £2billion a year is paid directly from the Department for Work and Pensions to Motability Operations Ltd, the public limited company which runs the charity. In February the Mail exposed how the firm was amassing the enormous reserves in unspent money from taxpayers while paying its chief £1.7million.
That triggered the NAO probe. Investigators said Motability bosses had miscalculated how much they could get from selling customers’ cars at the end of their lease, ‘resulting in customers being charged £390million more than was required’.
They concluded Motability was a taxpayer-funded monopoly enjoying £888million a year in tax breaks and run by executives paid more than bosses of some of the UK’s top firms. Five executive directors received £15.3million in total.
After the Mail exposed Motability’s riches, the firm scrambled to offload spare cash by announcing a £500million donation to the Motability charity.
But farcically, the NAO report suggested that because the sum was so enormous, the charity – which awards grants to help disabled drivers – did not know what to do with it all.
The report recommended that ministers ‘should review’ the tax breaks given to Motability.
In a statement yesterday, Motability said Mr Betts, 56, was quitting the business in the wake of the report, but could stay in post until May 2020 to lend his ‘experience and skills’ to whoever takes over.
A spokesman said he would continue to get his existing bonuses but would not get a ‘golden goodbye’ payment.
MPs condemned the ‘obscene’ boardroom pay at Motability and demanded the firm pay back its pile of spare money.
Mr Mann said: ‘Motability continues to display breathtaking arrogance. It should now be writing a cheque to the Treasury for billions of pounds of public money it is sitting on.’
Frank Field, chairman of the work and pensions committee, branded Mr Betts’s pay ‘an obscene amount’. He added: ‘It is beyond appalling that could have been used to improve the lives of disabled people will be lining his pockets.’
Work and Pensions Secretary Amber Rudd Rudd praised the Mail’s investigation and vowed to personally confront Lord Sterling, the chairman of the Motability charity which oversees the company.
In a statement, Lord Sterling said: ‘We have accepted all of the NAO’s recommendations but have told them there are areas still open to further debate.’
Neil Johnson, chairman of Motability Operations, said: ‘We will continue to work with the charity Motability to invest to improve our service and value for money.’