The boss of the enterprise that leases automobiles to individuals with disabilities on behalf of the Motability charity is stepping down after it controversially emerged he’s set to obtain a £2.2m bonus on high of his seven-figure wage.
Mike Betts, the chief government of Motability Operations, got here beneath fireplace earlier this yr after MPs referred to as his annual £1.7m pay bundle “completely unacceptable”.
A report by the federal government spending workplace, the Nationwide Audit Workplace, revealed on Friday says in addition to his “beneficiant” remuneration, Betts can be in line for a beforehand undisclosed efficiency bonus price about £2.2m.
Following the report, Mobility Operations introduced Betts would stand down from his place by Might 2020, whereas the group’s chairman, Neil Johnson will retire in April 2019.
In an announcement, Motability Operations stated: “After 16 years within the enterprise, Motability Operations chief government Mike Betts and the board of Motability Operations Group plc have agreed that, following the implementation of actions agreed as an end result of the NAO evaluation, and dealing to assist the brand new chairman settle in, an acceptable successor will probably be discovered, and Mike will step down from the board, no later than Might 2020.
“The board is obvious that suggestions made by the NAO will profit from Mr Betts’ expertise and expertise to see them by means of.”
The Motability scheme permits disabled individuals to lease tailored automobiles through the use of by their enhanced mobility incapacity advantages – both incapacity residing allowance or its successor, the private independence fee. It at the moment helps about 614,000 individuals, lots of whom would in any other case wrestle to afford a automobile.
The NAO is important of the efficiency plan put in place for Betts and his fellow administrators in 2008, saying that the targets meant to incentivise “wonderful efficiency” have been set at ranges under what the corporate was reaching when the scheme was launched.
The targets have been “simply exceeded” and within the first seven years of the plan, 5 government administrators acquired “beneficiant” remuneration of £15.3m in whole, a close to fourfold enhance for what the NAO suggests was unexceptional efficiency.
“Motability Operations’ administration has carried out nicely since 2002. Nonetheless, we do suppose there’s a distinction between turning an underperforming enterprise round and finishing up a sequence of necessary however not essentially distinctive duties to maintain it on a street to a profitable operation,” it concludes.
Though the 2008 scheme resulted in 2015 and a brand new scheme will lower administrators’ remuneration – Betts’ bundle is more likely to shrink from £1.7m to £1.4m in 2019-20 – the NAO says it’s going to nonetheless be considerably extra beneficiant than these for comparable public sector organisations that compete with the personal sector for government expertise, corresponding to BBC Studios and Community Rail.
Though Motability doesn’t straight obtain public funding, critics level out that it receives about half of its annual £4bn revenue from incapacity advantages redirected to it by the Division for Work and Pensions (DWP) on behalf of claimants. It additionally receives £888m price of tax breaks that no different agency is entitled to, and is in impact a monopoly.
Whereas the corporate has carried out nicely and deserves credit score for offering a superb service to prospects, it has operated in a protected atmosphere, the NAO says. It has made £1bn in unplanned revenue since 2008 and holds almost £2.6bn in reserves, considerably increased than different main car-leasing corporations.
The scheme is overseen by a charity, Motability, and operated beneath a seven-year rolling contract by Motability Operations, which is a public restricted firm. The NAO discovered that the charity has little formal affect over Motability Operations’ government pay preparations.
The NAO notes that the corporate has donated £345m to the Motability charity since 2010. In September it introduced an additional £400m donation, an quantity equal to 14 instances the charity’s annual spending in 2017-18. It was not but clear that Motability might take in the size of the donations it has acquired or spend them successfully.
Responding to the NAO report, the Motability charity stated it might “search improved mechanisms to higher affect Motability Operations’ government remuneration”. Its chair, Lord Sterling, stated that the scheme accepted the watchdog’s suggestions however insisted there have been “areas nonetheless open to additional debate”.
A DWP spokeswoman stated: “To make sure that the scheme is targeted on delivering higher worth for cash we’re dedicated to working with the charity and key stakeholders in order that present and future preparations lead to improved outcomes for disabled individuals.”