The boss of a taxpayer-supported business that provides cars to people with disabilities has resigned after it emerged he is in line for a £2.2m bonus.
Motability Operations chief executive Mike Betts’ annual pay package of £1.7m was recently described as “totally unacceptable” by the Work and Pensions and Treasury Committees.
An inquiry by the National Audit Office (NAO) has also found he is in line for a £2.2m bonus by 2022.
The NAO accused the Motability scheme of charging customers £390m “more than was required” since 2008.
Frank Field, Work and Pensions Committee chairman said: “It is beyond appalling to learn that money that could have been used to improve the lives of disabled people will be lining his pockets instead.”
Previously, only the initial allocations of £258,000 had been disclosed – Mr Field claimed Motability Operations has “serious questions to answer” about the evidence it provided to a joint select committee inquiry earlier this year.
A Motability Operations spokesman said Mr Betts will resign “following the implementation of actions agreed as an outcome of the NAO review”. This is expected to happen “no later than May 2020”.
Motability is made up of the operations business and two charities, making up for approximately 10 per cent of all new cars bought in the UK.
The system works as follows: An individual’s mobility welfare payments are transferred to Motability Operations in return for a leased car, along with insurance, maintenance and roadside assistance.
However, upon investigation, the NAO found remuneration for executive directors has been “generous” and linked to performance targets set at levels “easily exceeded” since 2008.
As a result, in the first seven years of a bonus scheme, five executive directors received £15.3m in total.
Sir Amyas Morse, head of the NAO, said there is “much to be proud of” at Motability, but stakeholders including the government must give “far-reaching consideration to the scheme” and in particular whether its “governance and accountability arrangements are robust enough”.
A Department for Work and Pensions spokeswoman said the NAO report “strengthens our concerns regarding Motability Operations’ financial model” and insisted the department is committed to working with the charity to achieve “improved outcomes for disabled people”.
Responding to the report, the Motability charity said it will “seek improved mechanisms to better influence Motability Operations’ executive remuneration”’.
Lord Sterling, who co-founded the scheme, said in a statement that he accepts the watchdog’s recommendations but insisted there are “areas still open to further debate”.
Lord Sterling added: “Every penny surplus to sustainability and to this excellent price and service goes to help enhance the lives of the scheme’s disabled customers and their families.”