Motability vows to tighten oversight as disability scheme comes under fire

Vehicle leasing giant Motability Operations is to double down on efforts to curb suspected misuse of its scheme as debates over its taxpayer-funded business escalate amid calls for the entire model to be scrapped.

The organisation, which accounts for one in five new vehicle purchases in Britain, operates under a government-backed programme that enables people to use disability allowances to lease cars or vans.

People can currently access a Motability car if they qualify through the Disability Living Allowance or Personal Independence Payments (PIP) - although only if they get the highest, “enhanced” rate of these disability benefits.

While Motability has no control over eligibility checks, the business confirmed that its internal compliance team investigated 35,899 cases of potential misuse last year, leading to 5,300 customers losing their car accessed through the scheme.

In response to media-driven reports targeting the scheme, Motability told the Financial Times that it is to review its policy which allows up to three named drivers for each vehicle.

Chief executive Andrew Miller cited a recent case where tracking data showed a Motability vehicle being used daily for school runs and late-night journeys outside its intended purpose. “We have to start looking at tracking more closely to address valid concerns about how the scheme is being used,” Miller told the Financial Times, adding that the company is also reassessing its insurance criteria.

More than 40 per cent of Motability customers have a household income below £20,000, and about 2.4 million people in the UK receive the mobility allowance with the government determining eligibility. Of those eligible for the higher-level benefit, around one-third lease vehicles through the scheme. The scheme’s user base grew by 14.7% last year.

Motability has come under heightened scrutiny as the UK government embarks on a £4.8bn welfare savings spree focussed on disability and incapacity benefit claims.

In an attempt to claw back its tax spend, the Government recently announced a set of policies which target savings that come principally from tightening PIP eligibility rules - focussed on the daily allowance rather than the mobility element - which will reduce awards for around 800,000 claimants.

Croxdale Group managing director Anthony Rockingham pointed out that measures such as a 50% cut in health-related entitlements under both Universal Credit and a freeze in PIP eligibility could impact both the industry and broader economy.

"The Government’s efforts on tackling the cost of benefits will have an impact on the new car market, so the economy will be adversely affected in one way or another by the decision to squeeze the expenditure limits of people who currently receive the mobility component," he said.

Delivering her Spring Statement on March 26, Chancellor Rachel Reeves warned: “The Labour Party is the party of work. You should work. If you can't work, you should be properly supported. This government inherits a rotten system. More than 1,000 people every day are qualified for personal independent statements.”

The programme has also faced criticism over claims that luxury cars, including Mercedes-Benz and Audis, are being leased through the scheme although here, Miller pushed back, noting that premium models make up just 7% of its fleet of over 700,000 vehicles. Motability also funds charging solutions for EV users, aiming to help promote electric vehicle adoption in lower-income households.

Previously, the company has drawn attention for executive bonuses and cash reserves with some politicians arguing that its rapid expansion reflects an overly generous welfare system.

“We’re just trying to do the right thing,” Miller told the Financial Times, “helping our customers stay mobile as we navigate the shift to electric vehicles.”