Motability - facts, figures and thoughts

Motability was formed as an independent charity with all party Parliamentary support in 1977. Since then, the Motability Scheme has supplied over 3.5 million vehicles to disabled people.

Motability Operations is now owned by Barclays, Lloyds, HSBC and Royal Bank of Scotland, and overseen by registered not-for-profit charity Motability. However, whilst the charitable side is not-for-profit the operations side does seem to be making money as in its annual report, the company boasted it is guaranteed an income stream with 'minimal credit risk' and in the year to September 2013 the company paid Mike Betts, head Motability Operations, bonuses totalling £911,915, as well as a £125,000 payment in lieu of pension; this was on top of his basic salary of £501,900.

Currently Motability has over 620,000 customers who have opted to use their higher rate mobility Disabled Living Allowance (DLA) in exchange for a new lease car, which includes insurance, breakdown cover and all maintenance.At the end of the lease, which is usually three years, the customer returns the car for resale by Motability Operations. In a statement Lord Sterling, Chairman, Motability Board of Governors, said 'the Scheme buys over 200,000 cars each year, accounting for some 10% of the UK new car market'. DLA is not means-tested or taxable, and is paid whether the disabled person is working or not.

However in April 2013, the Government introduced a new benefit – Personal Independence Payment (PIP) – which will gradually replace Disability Living Allowance (DLA) for disabled people aged between 16 and 64. Between October 2013 and 2018, the Department for Work and Pensions (DWP) will reassess some two million disabled people aged between 16 and 64, who currently receive DLA, for the new PIP benefit. Under PIP you only get the Enhanced Mobility Component if you are only able to move up to 20 metres aided or unaided. Previously, under Disability Living Allowance (DLA), the equivalent higher mobility award was given to those who could only manage to walk up to 50 metres. Because PIP is a new benefit with different criteria to DLA, many disabled people will not qualify for mobility support under PIP and as a consequence, they will no longer be eligible to use the Motability Scheme. Disability Rights UK has already highlighted that 150 to 200 are losing their Motability car each week! Motability has reported that, to date, 45% of scheme users who have been reassessed from DLA have lost their Motability cars, although, in a Parliamentary reply by Mike Penning, figures show that the success rate for PIP appeals has been steadily increasing and now stands at 47%!

The new vehicles on the Motability Scheme aren't purchased with taxpayers money and just given away to people, like some may like to think. They are leased through the Motability Scheme (at vast discounts from the manufacturers for bulk purchases, which will also probably be lost) to customers for three years at a rate of £57.45 a week (based on current DLA Higher Mobility rates), that's £8,962.20 over the 3 year period, after which they are returned and sold. Depending on the type of vehicle and adaptations required the customer also has to pay an amount up front that can range from nothing to many, many £1000s. Then at the end of the three years lease the customer gets any adaptations back, to put on a new car, and a £250 bonus IF the vehicle is returned in a 'good' condition. Should they wish to have another lease car any advanced payment has to be found by them - and if you are purely reliant on benefits that is no easy task. It is, of course, the choice of the benefit recipient if they join the scheme, spend the money on other things, or hide it under their mattress, however I am sure the scheme makes economic sense, otherwise Barclays, Lloyds, HSBC and Royal Bank of Scotland would not be involved and there would have been £1m to pay the boss in bonuses - basically the scheme had to have been making money.

Those are the facts and figures, so now my thoughts.

According to the government and media we need to cut the deficit (austerity, austerity!) and to address some of this debt they have decided to penalise those who are ill and disabled. Basically they believe we all can't be as ill/disabled as we say we are, so have unreasonably moved the goalposts and are reassessing us all to prove we are liars and scroungers; even though this is being promoted under such slogans as 'making work pay' and 'we're all in it together'. However, in the case of Motability, the figures don't actually add up to me and what the government are doing is totally illogical.

1. To start with 2 million people will be reassessed for PIP, and that includes many who have previously been given an indefinite decisions for DLA. Each assessment is said to cost £115 to £190. That's £230m - £380m of taxpayers money just on medical assessments, before administrations, travel expenses, assessment centre costs etc are factored in. 
2. Motability accounted for some 10% of the new car market in the UK and a reduction of 45% of this market share could have quite a serious effect of the UK car market and manufacturing, and the economy - basically we're talking about 90,000 less new cars and that must mean a loss of jobs somewhere along the line. 
3. Then there is the fact that many Motability cars are having to be returned well before their lease has expired, causing a sudden glut of particular models on the market where dealers and manufacturers had thought these vehicles were in use for 3 years, thus reducing values across the board. Although in a few years time, if there is still a deficit of 90,000 new cars entering the market, we can be sure to see an increase in the cost of used cars when demand outweighs supply.
4. While 45% of claimants are losing their motability vehicles (which have to be returned up to 4 weeks after the initial decision) on appeal (which can take up to 6 months at the moment) 47% of these are getting their Enhanced Rate back and can rejoin the scheme with another new car and all the costs that go with it.
5. There are also good will payments to be taken into consideration. Motability are giving £2000 to those who have lost their Enhanced Mobility status due to PIP and first joined the scheme prior to 31 December 2012, or £1000 if they first joined the between 1st January 2013 to 31st December 2013, plus a pro-rata rebate of any advanced payment made. However you can rejoin the scheme after 6 months and keep this money without penalty. Seeing as 47% of claimants are winning their appeals and appeals are taking around 6 months, this basically means the government are giving away taxpayers money - doesn't it? And I'm not sure if this is charitable or just idiocy.
6. Back in December 2014 I opted to have a car under the Motability Scheme and, after much research, chose a Nissan Juke Tekna because of its easy access and helpful tech. On the open market this car would have cost £20,260 (without any discounts) and now appears to be worth £13,900, a reduction of £6,360 over the 1.5 years I have currently been using it; over which time I have paid just £4,481. However if I had been able to keep the car for the full 3 years lease its value would have dropped to about £11,500, a reduction of £8,760, when I'd have paid in £8,962.20 (and again this is without factoring in any discounts the scheme would have had arranged with the manufacturers). My car, the Juke, was also quite expensive option. Without dragging through exact figures, I am sure something like a Nissan Micra would turn a larger profit over a 3 years lease period.

I'm not a politician, nor do I have a degree in economics, however I can look at the basics and think this just doesn't make logical sense. I see a government telling us all the country is in debt and cuts are needed, yet I see huge amounts of money being wasted and changes being made when none really were needed. Instead of poking a finger at the ill and disabled, labelling them us liars, why doesn't the government investigate the reason behind the huge increase in disabling illnesses that are currently affecting hundreds of thousands?

Reference:
https://samedifference1.com/2015/10/19/pip-20-metre-legal-challenge-fails/
https://samedifference1.com/2013/10/02/motability-support-if-you-fail-pip-assessment/
https://samedifference1.com/2016/05/06/government-agrees-to-talks-with-disability-rights-uk-on-pip-mobility-descriptors/
http://bellacaledonia.org.uk/2016/05/05/benefit-sanctions-are-britains-secret-penal-system/
http://www.telegraph.co.uk/news/politics/11157096/MPs-want-inquiry-into-1million-bonus-of-disability-firm-boss.html
http://www.dailymail.co.uk/news/article-2789975/motability-boss-paid-1million-bonuses-sparking-calls-parliament-investigate.html
http://www.disabilityrightsuk.org/news/2015/september/half-pip-and-esa-appeals-successful
https://www.benefitsandwork.co.uk/news/3419-costly-chaos-of-pip-and-esa-medical-assessments