‘Indefensible’ cost of Motability Operations’ benefits-funded disabled vehicle conversions – Scottish Government advisers

The cost of adapting cars for disabled drivers is “indefensible” when the monopoly firm involved has increased its annual profits to more than £1 billion, Scottish Government advisers have said.

The Mobility and Access Committee for Scotland (Macs), which counsels ministers on disability transport, told The Scotsman it had “repeatedly raised concerns around the flexibility and value for money from the current Motability scheme and have great concerns over the profits being made from customers – disabled people – by charging more than needed to run the UK Government subsidised scheme”.

Motability Operations provides cars, powered wheelchairs and mobility scooters to 70,000 people in Scotland.

Macs convener Linda Bamford said: “We also understand that Motability plans to automatically take the Personal Independence Payment, Disability Living Allowance or Attendance Allowance 10.1 per cent uplift in April 2023, which would add to their already excessive profits of over £1bn per year. This uplift is intended to assist disabled people during the cost of living crisis and targeted through their disability support payments.

Motability Operations adapts vehicles for disabled drivers. Picture: Jon Super/PA

“We feel it is wrong for Motability Operations to be generating these excessive profits by charging disabled people more than needed for leases, and doubling down on this by taking targeted financial support away from disabled people during a cost of living crisis and when profit levels are already at a record high, is indefensible. Excessive profits should be returned to customers through a dividend scheme."

However, A spokesperson for Motability Operations said: "There is a risk here that Motability customers are being misled. Like other leasing companies, our profits this year are much higher than expected because of the temporary global increase in the value of used cars, which could not have been predicted when leasing costs were agreed 3-5 years ago. Furthermore, our financial resilience allows us to keep our prices as low as possible for the long-term and through times of uncertainty and rising costs.

“However, we agree entirely with the principle of returning money to Motability customers and are doing exactly that – from spring 2023, every new and renewing customer taking out a lease will receive a payment of £750, with customers who received the New Vehicle Payment of £250 in 2022 having that topped up by £500.

"This amounts to an investment of £525 million over 3-5 years. We are also investing a further £645 million in pricing support to keep lease prices on average 45 per cent cheaper than alternatives. Our customers in Scotland consistently tell us that we offer them excellent value for money."

It said the £750 payment was likely to be paid from the end of February.

A Scottish Government spokesperson said: "We note the significant profit made by Motability Operations and their intention to utilise this to support disabled people. Tackling the current cost of living crisis requires a collective response and we ask our partners, including Motability, to do everything they can to support disabled people in Scotland."

As part of the devolution of disability payments, it planned to open its new Accessible Vehicles and Equipment Scheme to other suppliers from January to end Motability’s monopoly, which would “give disabled people a meaningful choice, ensuring value for money and a fair deal”.