A disability scheme faces a double investigation after MPs raised concerns over the “grotesque” state of its finances.
Work and Pensions Secretary Esther McVey said she has asked the National Audit Office (NAO) to consider probing Motability amid reports a connected company has a £2.4 billion surplus and pays its chief executive £1.7 million a year.
Ms McVey also suggested the Government will pursue lowering the cost to disabled people of the Motability scheme in order to allow them to retain more of their benefits for other living costs.
Labour’s Frank Field, chairman of the Work and Pensions select committee, confirmed his panel would be launching its own “urgent inquiry”.
Disabled people are able to exchange their mobility allowance to lease a car, scooter or powered wheelchair via Motability.
Work and Pensions Secretary Esther McVey replies to an urgent question on Motability (PA)
Speaking in the Commons, Ms McVey said: “As we have seen in so many instances, what was deemed correct in the 1970s isn’t necessarily correct by today’s standards.
“With the current focus on corporate governance issues and the use of public money, I have today asked the National Audit Office to give consideration to undertake an investigation into this matter.
“I would be keen for the NAO to look at how taxpayers’ money is being used by Motability.”
She earlier said the charity has done “much good” since being established 40 years ago, but it must “listen to the criticisms it has faced” and be “receptive to change”.
Ms McVey added: “As Secretary of State, I want to see a clearer commitment from Motability to maximise the use of funds to support the mobility and independence of disabled people.”
Labour’s John Mann (Bassetlaw), who secured an urgent question on the issue, said there needed to be an “urgent review” of executive pay and the finances at Motability.
He said: “It’s grotesque that this registered charity, which is funded by a direct grant by the taxpayer through the Government, is carrying cash reserves of £2.4 billion and has been under-spending its budget by £200 million a year, and that this charity is paying its chief executive £1.7 million per year.”
After mention of the chief executive’s salary, Labour former minister David Lammy could be heard saying: “Shame.”
Labour MP John Mann (PA)
Ms McVey, in her reply, said: “(Mr Mann) quite rightly says such amounts of money are grotesque and shouldn’t be paid when really this money should be going to support disabled people.”
Conservative Philip Davies (Shipley) said disabled people had been “overpaying from their benefits” to pay for the scheme.
He asked: “Will you consider allowing this scheme to progress but at a lower cost to disabled people, and for them to retain more of their benefits, because Motability seems to be losing sight of what it was set up to do in the first place?”
Ms McVey said his suggestions seemed “fair and right, and that’s a matter we should pursue”.
The Charity Commission said the non-charitable company Motability Operations Group, to which the salary and reserve claims are against, does not come under its jurisdiction.
The Motability Operations Group provides a commercial service to the Motability charity, which oversees the scheme.
A Charity Commission spokeswoman said: “It is not for the Commission to comment on the pay of the CEO of a large non-charitable commercial company.
“However, we have made clear to the trustees of the charity Motability that the pay of the CEO of its commercial partner Motability Operations may be considered excessive and may raise reputational issues for the charity. These reputational issues are for the trustees to manage.”