Concern over Motability Operations' ‘excessive profits’ from vehicles for disabled raised with Scottish ministers
Motorists with disabilities are being overcharged for vehicle adaptions because of “excessive profits” by the company involved, disability advisers have told the Scottish Government.
The Mobility and Access Committee for Scotland (Macs), the official advisory body, has raised its “deep concern” over Motability Operations as control of the social security benefits used by people with disabilities to pay for such vehicles switches from the UK to Scottish Government.
It is worried about the “excessive profits generated from disabled people’s support payments” for providing cars, powered wheelchairs and mobility scooters to 70,000 people in Scotland.
One industry source said they could be paying £1,000 more than they needed to.
A spokesperson for Macs said “We have raised concerns around the value for money aspects of the current Motability scheme with the Scottish Government, particularly as disability payments devolve and the Scottish Government’s accessible vehicles and equipment scheme [of which Motability is an accredited supplier] evolves.
"As a result of surplus profits, the Motability charity has accumulated funds of £1.4 billion, making it one of the largest charities in the UK.
"Virtually all of these funds are derived from collecting more money from disabled people’s benefits than was needed to operate the scheme.”
Macs said Motability Operations chief executive Andrew Miller had refused its request to return future excess profits to customers.
He told the committee there would be further significant donations to the charity following the latest annual report for the year to September, which showed profits of nearly £560 million.
Macs said the company had also refused its call to launch a “thorough value for money audit of the entire operation” to significantly cut costs and reduce the cost of customer leases.
However in a joint statement, Motability and Motability Operations said they provided “excellent value for money” to disabled people.
It spokesperson said: “The long-term sustainability and affordability of the Motability scheme relies on maintaining a stable capital position.
"A large portion of the funds needed to run the Motability car scheme come from the sale of customer cars at the end of their lease.
"Used car prices are at a temporary all-time high, inflated by global supply chain issues delaying the availability of new cars.
"This global trend has affected the entire automotive industry and all leasing companies, and resulted in an unplanned increase in 2021 profits.
“The scheme invests profits to support customers and disabled people in a number of ways, including support for pricing, customer service enhancements, customer payments such as the £600 good condition bonus, and donations to Motability, the charity.”
The spokesperson said in December, Motability Operations had committed £180m in “direct rebates and support for customers”, £300m to help customers witch to electric vehicles, and donated £170m to Motability, the charity, “to support Motability’s vision that disabled people should not be disadvantaged due to poor access to transportation”.
The donation would be used to increase spending on scheme-related grants and expand support for other organisations and charities over the next three years.
"This will enable the charity to keep pace with increased demand for financial help and help disabled people in areas where research and insight has shown opportunities to have the greatest impact.”