Motability tightens oversight after possible misuse of disability scheme

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 escalates amid calls for the entire model to be scrapped.

The organisation, which accounted for almost one-in-five (18.8%) new vehicles in Britain (366,726 units) last year, 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 Payment (PIP).

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,” said Miller, adding that the company is also reassessing its insurance criteria.

More than 40% 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 Government announced cuts to welfare and tightening PIP eligibility rules, which is estimated to reduce awards for around 800,000 claimants.

Delivering her Spring Statement on Wednesday (March 26), Chancellor Rachel Reeves warned: “More than 1,000 people every day are qualified for personal independent statements. 

“One in eight young people are not in employment, education or training. If we do nothing, we are writing off an entire generation that cannot be right, and we will not stand for it.”

The programme has also faced criticism over claims that luxury cars, including Mercedes-Benz and Audis, are being leased through the scheme, although Miller pushed back, noting that premium models make up just 7% of its fleet of more than 700,000 vehicles. 

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,” explained Miller, “helping our customers stay mobile as we navigate the shift to electric vehicles.”