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C&AG response to joint evidence session on the Motability scheme

This morning the head of the NAO, Sir Amyas Morse, gave evidence in a joint sitting of the Treasury and Work and Pensions Committees on the Motability scheme. Following which, he said:

“I am releasing this statement as it is an unusual set of circumstances. I was called upon by a former Secretary of State to produce a report into the Motability scheme, so I thought it would be helpful to make a statement following today’s joint sitting of the Treasury and Work and Pensions Committees.

“In today’s session, I made it clear that far-reaching consideration needs to be given to how the Motability scheme currently operates, and to its future. Our December 2018 report stressed that while Motability customers are provided with an excellent service, much of this success is attributable to the unique support provided by the Government. The scheme’s governance and accountability arrangements have not been working as they should for a long time and must be addressed.

“Executive pay at Motability Operations has been very generous and the Motability charity has been unable to exert sufficient influence over pay. Motability Operations’ intentionally conservative financial model has led to high levels of reserves and unplanned profit, and Motability doesn’t have a long-term strategy to absorb the significant donations it is likely to continue to receive.

“Motability needs to think creatively and set out how it can put this extra money to best use, and should put itself at the forefront of good governance as befits one of the larger charities in the UK, for example by respecting recommended tenure limits for its Board. Motability Operations must further increase transparency about the bonuses it pays its executives and get a better understanding of why it has consistently under-estimated profit over the last decade. The government should ensure these steps are taken and review the value and impact of the support it provides to the scheme, in light of its objectives for mobility allowances.”

Notes for Editors

1.      The National Audit Office scrutinises public spending for Parliament and is independent of government. The Comptroller and Auditor General (C&AG), Sir Amyas Morse KCB, is an Officer of the House of Commons and leads the NAO, which employs some 785 people. The C&AG certifies the accounts of all government departments and many other public sector bodies. He has statutory authority to examine and report to Parliament on whether departments and the bodies they fund have used their resources efficiently, effectively, and with economy. Our studies evaluate the value for money of public spending, nationally and locally. Our recommendations and reports on good practice help government improve public services. Our work led to audited savings of £741 million in 2017.

Contact

NAO Press Office
+44 (0)20 7798 7400 or email pressoffice@nao.org.uk

PN: 3/19