Motability finances in the news......OBSCENE???

exdvr

http://www.bbc.co.uk/news/business-44188363

"The Secretary of State has stated that Motability provides an extremely valuable service to disabled people but the levels of executive pay and financial reserves are concerning," a spokesperson for the Department for Work and Pensions added.

Surely questions have to be asked into why the chief executive earns £1.7 million per year and the business he controls has assets of £2.4 BILLION.

Misscleo

Yhis news is a few months old. If anyone can find out whats being done to sort this out.
Can they let us know please

regent

Most car manufacturers provide a scheme equally as good as Motorbility...check your local dealer FIRST....

Gaina

The latest on this can be found here:

https://www.parliament.uk/business/committees/committees-a-z/commons-select/work-and-pensions-committee/inquiries/parliament-2017/motability-17-19/publications/

One letter between Lord Sterling and Sir Amyas Morse is particularly revealing.  Sterling is basically arguing that because Motability is made up of 3 private companies that don't receive government money they're not liable for a Ministerial review.   Their convoluted reasoning is that customers *choose* to instruct the DWP to divert their mobility component to Motability.  Unbelievable.

poppy123456

regent said:

Most car manufacturers provide a scheme equally as good as Motorbility...check your local dealer FIRST....

Whilst that's a great idea for some, there's many people out there that won't be accepted for any sort of finance deal.

Gaina

regent said:

Most car manufacturers provide a scheme equally as good as Motorbility...check your local dealer FIRST....

That's what I'm going to to do.  I need a WAV and the last one was hella expensive so I'm going to do without a car for a few months, save my money and explore my options.

April2018mom

Gaina said:

The latest on this can be found here:

https://www.parliament.uk/business/committees/committees-a-z/commons-select/work-and-pensions-committee/inquiries/parliament-2017/motability-17-19/publications/

One letter between Lord Sterling and Sir Amyas Morse is particularly revealing.  Sterling is basically arguing that because Motability is made up of 3 private companies that don't receive government money they're not liable for a Ministerial review.   Their convoluted reasoning is that customers *choose* to instruct the DWP to divert their mobility component to Motability.  Unbelievable.

Honestly I hope that dissatisfied disabled people rise up to complain about this. I’m appalled by this nonsense. 

Misscleo

We could rise up but to whom? 
Sort that out and yes i think disabled people would hold the dwp responsible for all the money they have wasted.
Money that should be used to help us drive and to keep ours cars on the road.
And that should include.people over 70. Disablity 1st not age 

Gaina

Misscleo said:

We could rise up but to whom? 
Sort that out and yes i think disabled people would hold the dwp responsible for all the money they have wasted.
Money that should be used to help us drive and to keep ours cars on the road.
And that should include.people over 70. Disablity 1st not age

Motability know they've got the monopoly at the moment so it's not like they're scared the majority will go elsewhere so I'm not sure what sort of power we have to bring them to account.

Geoark

@Misscleo how in this context has the DWP wasted money? The Motobility scheme, either the commercial side or charity, receive £0 from the government.

To the year September 2017 Motobility received £2.1 Billion in used car sales, just under half its annual income. The article referred to in the opening post states that the company has £2.4 in funds - not the same as assets as described by @exdvr So over time they have built up roughly six months of their annual revenue.

So to answer the question in the thread title is this obscene?

Considering just under 50% of the annual revenue is through second hand car sales a slump in this market would have a huge impact on their income and so represent the highest risk to the Motobility scheme. So in truth while £2.4 Billion sounds a lot of money it represents about 6 months income, giving them 12 months leeway if things go wrong with the second hand market.

Personally I would be more concerned if the money wasn't there or plans to at least build it up.

atlas46

Hi @Geoark

Good point on the risk motability carries.

They have numerous bonds owing for future repayments, to the banks.

100s of millions pounds over next few years.

If you understand the lease car market, this is a non story.

Only a third of people who get enhanced mobility have a motability car.

Thats over 600,000 cars.

Around 1,220,000, do not use the motability scheme.

It all sounds big numbers and it is the largest lease scheme in Europe.

Hope this helps.

exdvr

What I find totally obscene is not the financial state of Motability but the fact that one individual takes £1.7 million in wages from it.  No-one whatever his professional status is deserves that amount of money in wages .

atlas46

Lewis Hamleton just signed new contract with Merc for 40 million pounds a year!

exdvr

atlas46 said:

Lewis Hamleton just signed new contract with Merc for 40 million pounds a year!

Hamilton.    Obscenity knows no bounds. 

 What a sad world we're living in.

Geoark

@exdvr thank you for the clarification on what you found obscene. It is obviously a moral judgement and I can fully respect this.

The article is clear his pay is based on the FTSE 250 and his wage is below the average, £1.8 Million. It is hardly excessive compared to others. That doesn't make the situation right morally, but with a turnover in excess of £4 Billion would you not want it in good hands? A lot is made of comparing salaries with what the Prime Minister is paid. I wonder how many of these well paid CEOs would remain in their jobs if their performance matched Theresa May.

Personally I find it interesting that this is where the focus is considering that the ATOS contract was recently extended, the farce on the contracts for helping people to get back to work, or the loss of money introducing the new system for UC. 

Gaina

atlas46 said:

Hi @Geoark

Good point on the risk motability carries.

They have numerous bonds owing for future repayments, to the banks.

100s of millions pounds over next few years.

If you understand the lease car market, this is a non story.

Only a third of people who get enhanced mobility have a motability car.

Thats over 600,000 cars.

Around 1,220,000, do not use the motability scheme.

It all sounds big numbers and it is the largest lease scheme in Europe.

Hope this helps.

If the mobility component goes up, THEY pocket the difference AND they expect us to go and buy the car at auction if we want to keep it after the lease is up, which means you've paid way more that the car was worth to buy (trust me, I've done the maths).  That's not a non story to me. 

Gaina

Geoark said:

@Misscleo how in this context has the DWP wasted money? The Motobility scheme, either the commercial side or charity, receive £0 from the government.

To the year September 2017 Motobility received £2.1 Billion in used car sales, just under half its annual income. The article referred to in the opening post states that the company has £2.4 in funds - not the same as assets as described by @exdvr So over time they have built up roughly six months of their annual revenue.

So to answer the question in the thread title is this obscene?

Considering just under 50% of the annual revenue is through second hand car sales a slump in this market would have a huge impact on their income and so represent the highest risk to the Motobility scheme. So in truth while £2.4 Billion sounds a lot of money it represents about 6 months income, giving them 12 months leeway if things go wrong with the second hand market.

Personally I would be more concerned if the money wasn't there or plans to at least build it up.

But they don't 'receive £0 from the government' they get our Disability benefit, which IS government money.  Motability are playing semantics to avoid being held accountable, that's what annoys me.

Geoark

Gaina said:

If the mobility component goes up, THEY pocket the difference AND they expect us to go and buy the car at auction if we want to keep it after the lease is up, which means you've paid way more that the car was worth to buy (trust me, I've done the maths).  That's not a non story to me. 

Hi @Gaina

If the mobility component goes up they do not pocket the difference. First you have a choice of cars, you select one that is less than your mobility component you keep the difference. Similarly if the mobility component goes up of course they do not pocket the difference, for no other reason you have already entered into a contract with them and the payments are already set. 

I am not sure what your second point is, the car alway belong to Motobility you are simply leasing it. Motobility has a responsibility to manage their assets and this including getting the best price for their vehicles, either through auction or through second hand dealership. It is always going to cost more to lease a car and then buy it at the end of the lease period than to buy a new car, as you say a non story.

Geoark

Gaina said:

But they don't 'receive £0 from the government' they get our Disability benefit, which IS government money.  Motability are playing semantics to avoid being held accountable, that's what annoys me.

Hi Gaina,

The money is given to the individual claimant to do with as they want, there are no restrictions on how it is spent. It is up to the individual if they want part or all of their mobility award on a car, mobility scooter or electric wheel chair. It is their choice not the government. It is not semantics it is a simple truth.

The fact that the money is directly paid from the source rather than an individual has some advantages for disabled people, for example the need for the individual to prove their income and get a credit check.

It is also untrue that they are unaccountable. The charity side would be held accountable to the charity commission as well as its members, while the business side would be accountable under the Companies Act 2016, as they provide leases they would also be accountable to the FSA and various consumer laws. And of course they are also responsible to their shareholders. Both sections would be subject to regular financial audits.

Also it should be noted that they have not objected to being audited by the NAO, just that it is done under the relevant section of the law, and have promised to make the results of the audit public.

Gaina

Geoark said:

Gaina said:

But they don't 'receive £0 from the government' they get our Disability benefit, which IS government money.  Motability are playing semantics to avoid being held accountable, that's what annoys me.

Hi Gaina,

The money is given to the individual claimant to do with as they want, there are no restrictions on how it is spent. It is up to the individual if they want part or all of their mobility award on a car, mobility scooter or electric wheel chair. It is their choice not the government. It is not semantics it is a simple truth.

The fact that the money is directly paid from the source rather than an individual has some advantages for disabled people, for example the need for the individual to prove their income and get a credit check.

It is also untrue that they are unaccountable. The charity side would be held accountable to the charity commission as well as its members, while the business side would be accountable under the Companies Act 2016, as they provide leases they would also be accountable to the FSA and various consumer laws. And of course they are also responsible to their shareholders. Both sections would be subject to regular financial audits.

Also it should be noted that they have not objected to being audited by the NAO, just that it is done under the relevant section of the law, and have promised to make the results of the audit public.

Thanks for the reply.

I noticed that only one third of people eligible for the scheme use it. That's an awful lot of people potentially missing out on being productive members of society and I'd like to know why this is the case.

I remember being turned down for a grant to help me afford a WAV in 2009 because I didn't have a job. This seems nonsensical to me as I needed the WAV in order to improve my chances of *finding* a job - if I'd had a job, I wouldn't have needed to apply for a grant! A total catch 22.

I really do wish more car dealerships were getting savvy about providing alternative packages to motability as I think with a goods and services for disabled people, there's not much incentive for change when you have a captive audience and no competitors, also there's an attitude of them doing you a favour rather than you being a fee-paying customer which irks me no end.

Geoark

Hi @Gaina

I can fully understand your frustrations, especially needing help or support to achieve something, but cannot get it because you have not managed to achieve it.

I totally agree with you regarding businesses becoming more savvy with how they deal with disabled people. For example I am a strong believer in supporting local shops, but frankly many do not help themselves. Narrow isles are bad enough, but when they also store stock on the floor even I find it difficult to shop in some stores and deliberately ignore them.

I have also come across attitude some people have that you mentioned, and again agree with you. I have always complained when I have come across this type of attitude,  more often than not I have had possitive results from doing this.