Financial Conduct Authority criticises Motability for cash pile

Regulators yesterday criticised a company that provides cars for disabled people for hoarding £2.4billion of public money.

The drubbing, from the Financial Conduct Authority, follows a Daily Mail investigation and was used by MPs to criticise the bosses of the Motability scheme.

The MPs on the work and pensions select committee accused Motability Operations chief Mike Betts of ‘making things up’ as he was grilled over his ‘bloated’ £1.7million pay and the stockpile of taxpayers’ cash.

The FCA concluded Motability – which arranges cars for disabled people in exchange for their state disability allowance – had too much money. 

Asked if the charity really needed such a huge reserve, the FCA’s chief executive Andrew Bailey said: ‘The simple answer is no.’

The Mail revealed Motability’s £2.4billion stash last month, which, if handed back to the taxpayer, would pay for seven new hospitals or 125,000 police officers. 

Yesterday four Motability bosses were hauled before the select committee hearing called in response to the Mail’s investigation.

Labour MP John Mann quoted the FCA’s conclusion to Mr Betts, telling him: ‘It is saying you are not required to have £2.4billion. You are saying you do need it. You are making a few things up.’

Mr Betts said the scheme needed its reserves to help it manage business risks. But Mr Mann said: ‘I put it to you that you are not actually risking things at all.

‘What we have here is a very good scheme that has become rather bloated, where there is no risk, and little bits on the side, little bits of extra profits for the banks, little bit of comfort for you – hence why you keep giving us false information.’

Committee chairman Frank Field said Motability had almost no risk at all and quipped the only safer place for investors’ money was the German Bundesbank. 

Motability is a registered non-profit charity which contracts the work to the company Motability Operations. 

Mr Betts, 55, who is the boss of the latter, earns 11 times more than the Prime Minister, lives in a £5million riverside apartment overlooking Tower Bridge, banks with Coutts and takes Caribbean holidays.

Chairman Neil Johnson was paid £173,000 in 2017. 

Former second-in-command David Gilman, 65, was paid £1.1million in 2016, and his replacement Matthew Hamilton-James, 44, earned £550,000 last year.

Mr Johnson said the money ensured the best management team.

But Mr Field attacked Mr Betts for the ‘large, large, large amount of money going into your pocket’, while Tory MP Charlie Elphicke told the Motability bosses their operation was ‘like a casino’.

Labour MP John Mann quoted the FCA’s conclusion to Mr Betts, telling him: ‘It is saying you are not required to have £2.4billion. You are saying you do need it. You are making a few things up’

Fellow Conservative MP Heidi Allen said the jackpot salaries were ‘more than most chairs of FTSE companies earn’. 

She added: ‘This is taxpayers’ money for people with disabilities.’

Mr Betts said his pay was set by the board and he had nothing to do with it, while Mr Johnson said Mr Betts had turned the company around and deserved his money.

Yesterday the Government confessed it had known for at least five years that Motability has been receiving too much public money.

Sarah Newton, the Minister for Disabled People, said: ‘I do think there are serious questions about governance. Disabled people do deserve a better class of service.’

Motability was set up in 1977 to help disabled people get around by leasing them a car, scooter or powered wheelchair. 

Customers agree to their £58-a-week mobility benefits being paid to the company.

The Department for Work and Pensions then pays £2billion a year to Motability Operations Ltd.

The National Audit Office is being asked to conduct its own inquiry into Motability. 

Lord Sterling, chairman of the Motability charity, told the MPs: ‘We would welcome it… we wish to have a review so that the issues raised in recent weeks can be put to bed once and for all.’