Taxpayers give over billions for new vehicles under Motability scheme
The budget for new vehicles under the Motability scheme for disabled people is higher than expenditure on school repairs across the UK, fresh analysis has indicated, in further evidence of the breakdown of the social contract.
Number-crunching by the free market think tank Adam Smith Institute has shown that the scheme, which allows disabled people to lease cars or powered wheelchairs, cost £3.4bn more last year as taxpayer cash went towards new vehicles.
Reform UK’s head of policy Zia Yusuf said that spending on the scheme had “spiralled out of control”, with the ASI’s new paper showing a path towards cutting waste and improving the quality of public spending.
“The Motability schemes were designed to support those with genuine, life-limiting disabilities and many of those exploiting these schemes are not even physically disabled. Targeted support must only go to those who truly need it,” Yusuf said.
“The fact that taxpayer money is being spent on subsidising BMWs is totally unfair on those struggling to make ends meet.”
ASI researchers said the overspend came due to an “insistence” by Motability – a government-backed scheme that is managed by a private company – that brand-new vehicles were supplied.
Data also showed the enhanced rate personal independence payment (Pip) mobility claims have increased by 80 per cent, with the growth in claims coming due to mental health.
The ASI’s report said the scheme lacked accountability and had a monopoly on the provision of vehicles for disabled people.
Mitchell Palmer, an economist at the ASI, said Motability was “over-generous” and “under-scrutinised”, particularly given its turnover of £7bn was larger than the prisons budget.
Motability ‘under-scrutinised’
Motability also enjoys VAT and insurance premium tax reliefs, which analysts said were worth £1.2bn a year.
The ASI has called for the end of tax reliefs and a tightening of the Pip mobility criteria. It also said the scheme should be opened to competition from private leasing providers.
The Department of Work and Pensions should also have representation on Motability’s board while anonymised data should be regularly published.
Shadow work and pensions secretary Helen Whately said: “The British taxpayer should not be stumping up for new cars for people with conditions like tennis elbow and social phobia – that is a scam.
“The ASI’s report is a hugely important step in exposing this to the British public. We need urgent action to tackle the spiralling welfare bill.”
Motability criticises ASI
Motability disputed ASI’s report and said that calculations did not consider the possibility of insurance or repair costs on second hand cars. It also said leasing second hand vehicles would cost over twice as much as new ones.
In a lengthy response to the findings, Motability also said the scheme provided good value for taxpayers, drove growth in the manufacturing sector, and that managers met regularly with the government.
A spokesperson for the Motability Scheme said: “The Adam Smith Institute proposals are based on bad maths and a misunderstanding of how car leasing works, leading to higher costs for disabled and non-disabled drivers, reduced access to jobs and they do nothing to cut costs for government.
“Disabled people face huge transport barriers, and the Motability Scheme is a lifeline – helping people get to work, education and live independently.”