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As usual it's worth reading the full report, and then applying some scepticism for committee members grandstanding, rather than a misleadingly headlined newspaper account:
publications.parliament.uk/pa/cm201719/cmselect/cm...f
Motability is, if not the biggest, one of the biggest car leasing organisations in the world. It is not, except in the sense of exemptions from VAT/Insurance Tax, taxpayer funded. People entitled to the qualifying benefits assign that part of their income, which would otherwise be paid to their bank, to Motability in exchange for a car.
While it does not have direct competitors with same tax exemptions it is a financially complex multi billion pound business. It faces same risks from negative equity in its fleet, well publicised on this site and in wider media, as do other leasing companies. Running an organisation on that scale requires managers of a certain calibre and qualification. Those people have a market price for which salaries of the PM and other Ministers, quoted in the report, are an utterly absurd comparator.
Yes, lack of competition is a real issue. Providing that competition could be done quickly and simply by amending the statutory provisions regarding (a) tax exemption and (b) re-aasignment of benefit.
Whether the added complexity for claimants would be worthwhile is another question.
Edited by Bromptonaut on 22/05/2018 at 10:00
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Seems like a pretty good business model to me - the motability clients can afford much better cars than they would if they were privately financed(*); the company is able to increase reserves in case of rate shocks, and it can pay it's CEO £1.7M / year. Possibly if you spread out the excess across all the cars on the fleet, each client could go up one trim level for the same price, but that would leave no reserves.
* much better than I can, and I'm hardly hard up!!
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.... the company is able to increase reserves in case of rate shocks, and it can pay it's CEO £1.7M / year.
That's the bit I don't like - it seems to lie uncomfortably with what appears to be a 'charitable' business. If senior posts are seen to be so unattractive as to need this kind of salary to get the right person, something is wrong somewhere - unless of course the holder has to pay for support staff out of it (unlikely).
I retired 25 years ago from a decent lower-management position in a large company on about £30K, and now survive quite comfortably on a slightly lower pension. Why one person has to be given 60 times that baffles me. And don't get me started about football: the ludicrous money sloshing about there has ruined the 'game'.
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As usual it's worth reading the full report.....
....especially paragraph 48.
. Running an organisation on that scale requires managers of a certain calibre and qualification.
Just because it's big doesn't mean it's more difficult or risky to run. As for qualifications, an ACA and perhaps a post-grad MBA would be sufficient, I would have thought.
Those people have a market price for which salaries of the PM and other Ministers, quoted in the report, are an utterly absurd comparator.
Clearly no-one becomes a UK MP or PM for the money, but the way in which CEO's and CFO's 'compensations/packages' (Betts is not the only one) have increased over the past ten years while everyone else's perk-less 'market price' has remained virtually static is widely regarded as obscene.
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"would never buy a motability car again after a bad experience.
service history not as good as first appeared, general condition poor, mileage questionable."
Sorry to hear this. My experience was the exact opposite. The car was exactly three years old and immaculate - and I mean immaculate. Service history (electronic) checked out, as did mileage. I've put two tyres on it, had it serviced once and that's it. Best car I've ever owned.
I think it's important to take each prospective purchase on its merits and check before you buy.
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£1.7m is simply too high a salary for anyone, footballers included.
However, Nicky Morgan's comment along the lines of Motability should be subject to competition to ensure users of the scheme get the best value is a smokescreen.
(See what competition did for the buses, railways, energy providers for the poor old consumer)
Mrs 72 dudes qualified for a Motability car for the first time last year, so I have to declare an interest here.
But she swaps her £58 per week for an Audi Q3 1.4 TFSi Sport S-Tronic, and this includes VED, Insurance, all Servicing and Maintenance for 3 years.
Because we wanted a car that was towards the upper end of allowable models, I put down £2400 of my own money, that was our choice.
But to question whether users are getting the best value is absurd. I worry that long term Ms. Morgan and her ilk would like to dilute the scheme so that the best car users can choose is a Dacia Sandero.
The high reserves probably do need looking into and Motability have already welcomed the decision, but surely if this was a PLc, they'd be hailed as a great capitalist success story!
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But she swaps her £58 per week for an Audi Q3 1.4 TFSi Sport S-Tronic, and this includes VED, Insurance, all Servicing and Maintenance for 3 years.
Because we wanted a car that was towards the upper end of allowable models, I put down £2400 of my own money, that was our choice.
Which is £318 / month over 3 years. Equivalent car from Ling is £455 / month + £1500 down, gives £480 / month - + plus insurance and maintenance, so say £550 / month all in. Not quite half the open market price, but certainly a good deal!!
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would never buy a motability car again after a bad experience.
Everyone makes this kind of emotional but statistically irrational response after one unfortunate experience. Maybe it is "French cars', or cars from a well-known national chain of garages. There are good cars, poor cars, and plenty in between, which most of us buy and learn to live with. There are also thorough staff and careless staff. One can't really extrapolate from this kind of experience, merely shop elsewhere.
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good luck to the motobility users but why can't the scheme use quality second hand cars like the rest of us. There must be a shed load of money going down the drain just in depreciation. How does the all inclusive maintenance and insurance work, are poor drivers subsidised on their all inclusive premiums or do I read this wrong?
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good luck to the motobility users but why can't the scheme use quality second hand cars like the rest of us.
I think you read it wrong. The myth of 'taxpayer funded cars' is hard to kill.
People who meet a qualifying requirement of being unable or virtually unable to walk qualify for (non means tested) benefit. Mostly DLA or PIP but a few via Forces Disability Pensions. Value of DLA/PIP is a whisker under £60pw. Not sure about Forces version - PIP/DLA turns up regularly in world of benefit advice.
Themoney is theirs, it doesn't belong to the taxpayer. They can:
- Take the cash and use it for taxis or whatever
- Surrender most or all of their benefit (possibly a deposit too) for a Motability car.
- Lease or purchase a new or seconhand car like the rest of us.
Some of course need adapatations either for disabled driver or wheelchair accessible car.
As with PCP most of what they pay, after bundled maintenance/insurance covers depreciation. End of lease vehicles are punted on at a premium in s/h market.
Edited by Bromptonaut on 22/05/2018 at 17:44
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If the £58 per week is enough for an Audi Q3 1.4 TFSi Sport S-Tronic, it could be argued that the rate is being set too high though. I wouldn't see anything wrong with tax payer funded benefits being limited at a level sufficient to fund a Dacia.
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If the £58 per week is enough for an Audi Q3 1.4 TFSi Sport S-Tronic, it could be argued that the rate is being set too high though. I wouldn't see anything wrong with tax payer funded benefits being limited at a level sufficient to fund a Dacia.
It's one argument I suppose. Not a very good one as Motability is not tax payer funded.
Even if it was, I'm a tax payer. In fact I paid tax at 40% for years so it's nice to get something back.
Don't get me wrong, it's a good scheme for the user.
Given the choice though, I would rather my wife had not developed a serious enough chronic condition which means she qualifies for a Motability car.
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Given the choice though, I would rather my wife had not developed a serious enough chronic condition which means she qualifies for a Motability car.
And that is the killer line. Like it says in blue badge spaces in France; if you take my place will you take my disability?
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Wow. £3000 per annum! I hadn't realised such generosity had superseded the provision of an AC invalid carriage for presumably a low annual mileage.
For the past 38yrs the annual depreciation of the four cars I have had over this time (total cost £28,000, still got two of them (TR7 and Audi A8) worth approximately £12,000) works out at less than£500p.a. It certainly doesn't cost another £2,500 for VED, insurance and maintenance! I feel sorry for the young struggling tax payers running old Focastras on a shoestring who are paying for such largesse! As for 'getting something back', that's not how taxation works.
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If the £58 per week is enough for an Audi Q3 1.4 TFSi Sport S-Tronic, it could be argued that the rate is being set too high though. I wouldn't see anything wrong with tax payer funded benefits being limited at a level sufficient to fund a Dacia.
As the person posting about the Audi pointed out £58 doesn't cover it; they need another £2500 (year's worth of DLA/PIP) on top as a deposit. Do you really think a Dacia equivalent would be right for everybody including those needing adaptations?
The benefit is intended to help cover cost of disability. Using it for a car rather than taxis is choice.
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