Motability is a scheme run by a private company called Motability Operations Ltd, intended to enable disabled people, their families and their carers to lease a new car, scooter or powered wheelchair, using their disability benefit. It is overseen by the charity called the Motability Foundation in the United Kingdom. According to its response to a UK Government inquiry in 2019 into enhancing mobility for disabled citizens, Motability Ltd had over 620,000 customers. In 2022 it made a pre-tax profit of £1.1bn. [1] According to Citizen's Advice, access to the scheme is dependent on eligibility relative to mobility conditions in government schemes, including: Disability Living Allowance (DLA), Personal Independence Payment (PIP), Armed Forces Independence Payment (AFIP) or War Pensioners’ Mobility Supplement.[2] Motability's 2019/2020 audit document reported 94% of persons using Motability's scheme to buy a car either have a physical disability or long term health condition.[3] In 2018, the National Audit Office praised the customer satisfaction rates for the service, but criticised the profit and reserve levels the charity held. They also noted criticised its governance and "executive remuneration."[4] A response to a 2019 parliamentary committee to release £343 million of its £2.5bn reserve was greeted as a "first step" to making best use of its "vast sums."[5]
Motability was founded in 1977 by Lord Sterling of Plaistow and the late Lord Goodman and the Motability Scheme was launched at Earl's Court, London, on 25 July 1978. It was initially targeted at motorists aged 16–19 years, with some 220 applications being processed at the beginning of the scheme.[6]
It is a partnership between the charitable sector, the UK government, leading banks, and the motor and insurance industries. Since 1978, over three million[7] cars, scooters and powered wheelchairs have been provided to help disabled people with their mobility needs.
Queen Elizabeth II had been the Chief Patron of Motability since its foundation.
History and beginnings
By the mid-1970s, over 40% of households in the country owned a car[8] but disabled people were underrepresented. Only those who could drive themselves received any government help with transport, usually in the form of a blue trike which was unable to take passengers.
The Mobility Allowance – now called the mobility component of PIP, formerly Disability Living Allowance – introduced by the government in 1976 was formulated to give people help regardless of ability to drive. It also signalled the government's commitment to giving disabled people choice in the form of a cash allowance, rather than imposing certain types of vehicles on them. The War Pensioners' Mobility Supplement pre-dates the Mobility Allowance by a number of years. However, when the government subsequently introduced the Mobility Allowance they set it at a lower weekly rate than the prevailing War Pensioners Mobility Supplement. This difference continues as both are increased annually by the same metric.
It soon became clear that, despite good intentions, the Mobility Allowance was not large enough to buy and run even the smallest car. The then Secretary of State for Health and Social Services invited the late Lord Goodman and (now Lord) Jeffrey Sterling to consider how disabled people could use this allowance to affordably obtain a vehicle.
Thus, Motability was born in 1977 to enable disabled people to afford a good-quality car from any participating manufacturer, fully insured, serviced, and with breakdown assistance. Motability was set up as a charity so it could also raise funds and make grants, in order to provide customers with a complete mobility package even if their allowance would not cover the type of car and adaptations that they needed.
On 25 July 1978, ten young people attended the first Motability Scheme vehicle handover at Earls Court in London and received the keys to their new vehicles from then Chairman Lord Goodman. Julie Newport, disabled by polio, was one of the ten to receive her keys and commented: "I think it's marvellous," saying the Scheme gave disabled people the freedom and independence they really wanted. Also present were Rt Hon Lord Morris, Rt Hon Lord Jenkin, Allan Beard and Jeffrey Sterling, the present Chairman of Motability.
In 2003, Motability celebrated its 25th anniversary with a garden at the Chelsea Flower Show. The garden included a Motability car, an adapted Renault Clio, to symbolize disabled people gaining access to the remotest parts of the countryside.
In October 2006, the Scheme hit the two million vehicles mark and Jeffrey Sterling commented: "Family life revolves around the disabled person so if you make someone mobile you don't help two million, it's more like six to eight million."
The late Lord Goodman described the establishment of Motability in 1977 as "the most successful achievement of my career and the most fortunate thought that ever came into my head".
From 8 April 2024, the amount payable for HRDLA, the Enhanced Mobility rate of PIP, Armed Forces Independence Payment and Scottish Higher rate Mobility Component of Child/Adult Disability Payment is £75.75 per week and War Pensioners Mobility Supplement is £84.55 per week.[9] New customers wishing to lease through Motability must have at least twelve months' award length remaining when they apply. The Care Component of DLA/PIP etc cannot be used to fund a vehicle through the scheme.
Due to the weekly difference of £8.80 per week extra between War Pensioners' Mobility Supplement and DLA/PIP/AFIP/Scottish Higher rate mobility component of Child/Adult Disability Payment mobility components, the Motability advance payments for War Pensioners Mobility Supplement customers are roughly £1350 lower to ensure that over the course of the full 3-year lease all customers will pay exactly the same amount for the same vehicle on the scheme. Should a War Pensioners' Mobility Supplement Motability customer enter into an extended lease beyond the standard 3-year lease period (or 5 years for Wheelchair Accessible Vehicles) this £8.80 per week is returned to the War Pensioner by Motability Operations. This is again to ensure all customers pay exactly the same during an extended lease period.
Customers choose a new car every three years or a wheelchair-accessible vehicle every five years. More than 20 manufacturers currently offer cars through the scheme, with premium manufacturers such as Audi becoming popular alternatives to more mainstream suppliers such as Ford and Vauxhall. Insurance for up to three approved drivers, vehicle excise duty, servicing with a free replacement vehicle, tyres and breakdown cover are all included in a single monthly payment. This payment is made automatically by the Department for Work and Pensions or Veterans UK to Motability Operations under the authority of a CP50 form signed by the hirer. At the end of the contract period, the customer can choose to lease another brand new vehicle, or leave the scheme.
While some vehicles do not require the customer to pay anything above their Mobility allowance, the customer may choose to opt for a higher-specified model on payment of an Advance Payment which is non-returnable. Motability pricing is independently assessed as being more than 40% cheaper than retail lease agreements, which is possible because of the unique VAT concessions that the Motability Scheme enjoys.
In addition, means-tested grants are available from the Motability charity for those who, because of the nature of their disability, have no option but to choose a vehicle which attracts an advance payment, or who may need special adaptations not already funded through the scheme. Many adaptations, such as push/pull brake/accelerator levers, are now also funded directly through the scheme so that the customer may not have to pay extra.
There are separate non-means tested grants for adaptations, including an automatic transmission grant of up to £660, paid by Veterans UK, for those in receipt of War Pensioners' Mobility Supplement, subject to needing the adaption(s) due to the War Pensionable disability/condition.
Market penetration
Almost 648,000 customers currently choose Motability for their mobility needs equating to more than 200,000 vehicles purchased per year by Motability Operations. Overall customer satisfaction is independently measured at 98%. In autumn 2015 Motability Operations was judged by the Institute for Customer Service to offer the 'highest customer service in the UK'.[10] Around two-thirds of Motability's customers drive their own vehicle, but non-drivers can get a car as a passenger. Similarly, parents and caregivers can also apply on behalf of a disabled child from the age of three.
Once their application has been accepted, the customer uses all, or part, of their allowance to pay for their vehicle for the period of the contract hire agreement. As of 10 April 2024, 125 cars are currently available to lease with no advance payment (with 318 nil advance payment cars for WPMS recipients). Larger or more expensive models may incur additional cost via an advance payment.
The largest fleet operator in Europe and the largest supplier of used cars in the trade, Motability Operations is owned by four major clearing banks – Barclays, Lloyds Banking Group, HSBC and NatWest Group.
Motability Operations' annual turnover is around £4.2bn. Any surpluses are continually reinvested in the business or donated to the Motability charity. Motability Operations sells over 200,000 used cars a year and the company's car purchases account for approximately ten percent of total new car sales in the UK. Since the Scheme started, over four million cars have been supplied.[11]
Structure
The organisational structure of the scheme can be broken into two parts: Motability, which is a registered charity, and Motability Operations (formerly Motability Finance Ltd), a public limited company owned by four clearing banks which operates the car and powered wheelchair leasing scheme on behalf of Motability. Splitting the organisation is intended to provide for checks and balances and ensure accountability for the administration of public funds. Salaries paid to Motability Operations Group PLC management have attracted negative publicity,[12] with former CEO Mike Betts taking home total remuneration of £948,243 in 2016, as reported in Motability Operations Group PLC's accounts.[13] Betts quit in 2018.[14]
Motability is a registered charity and has overall responsibility for the Motability Scheme, including:
Directing and overseeing the Scheme;
Raising funds to provide financial assistance through grants to customers who would otherwise be unable to participate in the Scheme;
Administering the Government's Specialised Vehicles Fund which provides financial assistance for customers who need complex adaptations or to travel in their wheelchairs; and
Providing technical support to customers and the adaptation and conversion industry.
Motability Operations has the exclusive contract for administering the scheme. According to the charity, any profits are reinvested in the Scheme or donated to the Motability charity. In the financial year ending 30 September 2016, Motability Operations reported post-tax profits of £130m net of a donation to Motability (the charity) of £45m. In 2021, the donation was £170 million. The National Audit Office in 2018 [15] and a parliamentary committee of 2019 [16] challenged how this reinvestment was being used, both in terms of its reserves (over £2.5bn) and executive reward "at near maximum" levels.
Motability Operations also set and monitors the standards of service provided by the dealer network, adaptations suppliers, breakdown company and the insurance company. Motability Operations also negotiates pricing with the vehicle manufacturers on a quarterly basis.
Insurance is provided exclusively by Direct Line Motability (since 1 September 2023) who have a dedicated Motability division. Direct Line require any persons wishing to be one of the three named drivers to have no or possibly some minor endorsements on their driving licence in the last five years. The excess for any claims has recently increased but remains competitive at £100. A third driver is permitted and subject to certain constraints on vehicle choice, additional drivers can include anyone from age 17 upwards (subject to the vehicle's insurance group for drivers under 25 years of age) provided they live with the disabled customer. Drink-driving convictions require five years from conviction date to be eligible for insurance on a Motability car. On 1 September 2023, Direct Line replaced RSA as insurance provider to the Motability scheme.
Breakdown cover is provided exclusively by the RAC.
Adaptations are supplied and fitted by independent specialists who are accredited to Motability.
Customers apply via accredited main car dealerships.
The Wheelchair and Scooter Scheme was operated by Route2mobility until June 2010, when it was taken over by Motability Operations.[17]
Welfare reform
In 2013, the Government started to introduce a new disability benefit, the Personal Independence Payment (PIP), which will gradually replace the Disability Living Allowance for disabled people aged between 16 and 64. Customers have started to be reassessed and as a result in some cases no longer receive an allowance that entitles them to access the Motability Scheme. Motability Operations have worked with Motability to devise a package of transitional support that pays up to £2000 to those customers who have lost their allowance as a result of the introduction of PIP. Motability Operations have donated £175m to Motability (the charity) to ensure that the cost of this package is supported.
Despite the introduction of PIP and the expectation that the number of customers on the Scheme would reduce as a result of the change, Motability customer numbers have stayed broadly static – only 25,000 customers left the scheme due to loss of their allowance in FY16, while 68,000 new customers joined.
Controversy
On 7 December 2018 the National Audit Office published its report on Motability which upheld many criticisms of executive pay and reserves policy. It also found that Motability had charged customers more than £390 million more than necessary for car leases over the past ten years and that the then CEO was entitled to further payments beyond those that had already been disclosed.[18]
A disability pension is a form of pension given to those people who are permanently or temporarily unable to work due to a disability.
State disability insurance is a type of insurance for workers who are ill, unable or injured. It partially replaces wages in the event a worker is unable to perform their work due to a disability. In some states, there are many types of organisations that provide different disability insurance. These organisations have specific definitions regarding what is a disability and how a person should qualify in order to receive the benefit.
Jobseeker's Allowance (JSA) is an unemployment benefit paid by the Government of the United Kingdom to people who are unemployed and actively seeking work. It is part of the social security benefits system and is intended to cover living expenses while the claimant is out of work.
A mobility scooter is an electric personal transporter used as mobility aid for people with physical impairment, mostly auxiliary to a powered wheelchair but configured like a motorscooter. When motorized they function as micromobility devices and are commonly referred to as a powered vehicle/scooter, or electric scooter. Non-motorized mobility scooters are less common, but are intended for the estimated 60% of wheelchair users who have at least some use of their legs. Whilst leg issues are commonly assumed to be the reason for using scooters, the vehicles are used by those with a wide range of conditions from spinal injuries to neurological disorders.
The Invacar is a small single-seater microcar vehicle designed for use by disabled drivers, and distributed for free in the UK.
Income Support is an income-related benefit in the United Kingdom for some people who are on a low income, but have a reason for not actively seeking work. Claimants of Income Support may be entitled to certain other benefits, for example, Housing Benefit, Council Tax Reduction, Child Benefit, Carer's Allowance, Child Tax Credit and help with health costs. A person with capital over £16,000 cannot get Income Support, and savings over £6,000 affect how much Income Support can be received. Claimants must be between 16 and Pension Credit age, work fewer than 16 hours a week, and have a reason why they are not actively seeking work.
Vehicle leasing is the leasing of a motor vehicle for a fixed period of time at an agreed amount of money for the lease. It is commonly offered by dealers as an alternative to vehicle purchase but is widely used by businesses as a method of acquiring vehicles for business, without the usually needed cash outlay. The key difference in a lease is that after the primary term the vehicle has to either be returned to the leasing company or purchased for the residual value.
The Disabled Persons Railcard is a concessionary fare scheme in the United Kingdom giving eligible passengers with disabilities benefits on the National Rail network including a 1/3 discount on fares.
Disability Living Allowance (DLA) is a social security benefit in the United Kingdom paid to eligible claimants who have personal care and/or mobility needs as a result of a mental or physical disability. It is tax-free, non-means-tested and non-contributory. The benefit was established by the Social Security Contributions and Benefits Act 1992, integrating the former benefits Mobility Allowance and Attendance Allowance and introducing two additional lower rates of benefit. Prior to 2013 it could be claimed by UK residents aged under sixty five years. However, the benefit was phased-out for the majority of claimants between 2013 and 2015 and replaced by a new Personal Independence Payment. DLA can still be claimed by children under sixteen and can still be received by existing claimants who were aged sixty five or over on 8 April 2013.
Disability benefits are a form of financial assistance or welfare designed to support disabled individuals who cannot work due to a chronic illness, disease or injury. Disability benefits are typically provided through various sources, including government programs, group disability insurance provided by employers or associations or private insurance policies typically purchased through a licensed insurance agent or broker, or directly from an insurance company.
Disabled Motoring UK is a non-governmental organization founded in the UK in 1922 and was recently known as Mobilise. It is a campaigning charity for disabled drivers, passengers, and blue badge holders in the United Kingdom. Disabled Motoring UK lobbies the government and businesses to improve parking, access, and refuelling services for disabled people. Disabled Motoring UK does not just campaign for motorists but also supports scooter and wheelchair users, as well as the families and carers of disabled people.
Personal Independence Payment is a welfare benefit in the United Kingdom that is intended to help working age adults with the extra costs of living with a health condition or a disability. It is available in England, Wales and Northern Ireland but not in Scotland where Adult Disabled Payment (ADP) is claimed instead.
The Welfare Reform Act 2012 is an Act of Parliament in the United Kingdom which makes changes to the rules concerning a number of benefits offered within the British social security system. It was enacted by the Parliament of the United Kingdom on 8 March 2012.
Carer's Allowance is a non-contributory benefit in the United Kingdom payable to people who care for a disabled person for at least 35 hours a week. It was first established as Invalid Care Allowance in 1976, and married women were not eligible. This policy was held to be unlawful sexual discrimination by the European Court in 1986 in the case of Jackie Drake. See Carers rights movement In May 2020 around 1.1 million people in England were entitled to Carer’s Allowance, of which 780,000 people were being paid it, according to the National Audit Office.
Many employers in the UK provide a Christmas bonus to their staff. Amounts vary widely, and may be supplemented by gifts from customers, known as Christmas boxes, usually paid direct. Some employers provide an annual bonus at other times of the year. Bonuses may be nominal, based on performance, or a thirteenth salary type scheme.
An adapted automobile is an automobile adapted for ease of use by people with disabilities. Automobiles, whether cars or vans, can be adapted for a range of physical disabilities.
Invalid carriages were usually single seater road vehicles, buggies, or self-propelled vehicles for disabled people. They pre-dated modern electric mobility scooters and, from the 1920s, were generally powered by small gasoline/petrol engines, although some were battery powered. They were usually designed without foot-operated controls.
Disability in the United Kingdom covers a wide range of conditions and experiences, deeply impacting the lives of millions of people. Defined by the Equality Act 2010 as a physical or mental impairment with a substantial and long-term adverse effect on a person's ability to carry out normal day-to-day activities, it encompasses various aspects of life, including demographics, legislation, healthcare, employment, and culture. Despite numerous advancements in policy and social attitudes, individuals with disabilities often encounter unique challenges and disparities.
Social Security Scotland is an executive agency of the Scottish Government with responsibility for social security provision.
A mobility allowance is a social security benefit for people who are unable to walk, or have difficulty in walking.
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