The way Aaron Hooper told it, he was so disabled he didn’t have the strength to grip a knife and fork or move more than a few metres without a wheelchair.
The 31-year-old was sufficiently convincing for the Department for Work and Pensions (DWP) to put him on disability benefit and he was awarded a brand-new car under the Motability scheme, which offers anyone in receipt of a ‘qualifying mobility allowance’ a free car, scooter or powered wheelchair in exchange for a portion of their disability benefits.
It was only when his mother came under investigation for suspected benefit fraud that a different picture of his physical abilities emerged.
DWP staff not only observed him walking a mile unaided through the Devon town of Axminster with a guitar slung across his back but also lifting heavy weights at a local gym.
It was his exploits in the fitness centre’s car park that were most telling, however. In a video the gym uploaded to Instagram, Hooper can be seen demonstrating his strength by pulling his car several metres across the tarmac using a rope attached to the tow hitch of the vehicle.
Hooper’s case is not just a salutary tale about the gullibility of the civil servants who police our bloated benefits system, but a reminder of the perks available to some of the 2.8 million people currently economically inactive due to ill health.
Last year, a record 815,000 claimants made use of the Motability scheme. This represents an astonishing increase of more than 170,000 customers in just 12 months thanks to a surge in people claiming disability benefits, which boosted Motability’s turnover to a whopping £7 billion.
This boom has proved extremely lucrative for the scheme, which enjoys a uniquely privileged position. Not only is it a private company, jointly owned by Barclays, HSBC, Lloyds and NatWest, but enjoys a guaranteed revenue stream in the form of state-funded benefits and has a de facto monopoly.
Andrew Miller, the CEO of Motability Operations which delivers the Motability scheme and is sitting on a surplus of £4 billion stemming from taxpayers’ money
Motability says its reserves are tied up in its enormous vehicle fleet and not held in cash, while accounts show it had £1.3billion cash in the bank last year (file photo)
So successful has it been in recent years, the Daily Mail can today reveal Motability Operations, the company behind the Motability charity, is sitting on a surplus of £4 billion. All of it stemming from taxpayers’ money.
Furthermore, the Motability Foundation – the trading name of the Motability charity – is sitting on a cash stockpile of £1.7 billion due to a combination of it being hopelessly overfunded given the limited range of disability causes it is entitled to support and a conservative approach to money management in order to ensure its ‘future financial stability’.
Motability claims its cash reserve is needed to protect it from tumultuous market conditions, such as changes in car prices and inflation. Indeed, last year it recorded a loss of £565 million. As a result, the company’s new customers – who are given their cars in return for signing over a portion of their benefits and a down payment – will be saddled with higher advance payments.
But why can’t this loss be covered by Motability’s vast reserves? A spokesman for Motability Operations said last night that its reserves ‘form £4 billion of our £14 billion vehicle fleet and are required to support the long-term sustainability of the scheme’.
He added that the company operated a ‘globally respected, UK-unique business… delivering significant social benefits to disabled individuals’.
Motability says its reserves are tied up in its enormous vehicle fleet and not held in cash. However accounts show it also had £1.3billion cash in the bank last year. Our revelations about the scale of the company’s reserves are likely to ring alarm bells at the highest levels of government.
They come seven years after Motability was first reprimanded by MPs and the National Audit Office (NAO) for its inflated cash cushion following a Daily Mail investigation – but then the reserves figure stood at a mere £2.4 billion.
Our disclosures come at a particularly sensitive time for the Government, as the DWP’s Secretary of State, Liz Kendall, is poised to announce controversial welfare budget cuts next week.
And Sir Keir Starmer and his Chancellor Rachel Reeves may question whether Motability’s £4 billion reserves – enough to cover the annual budget of four of Britain’s biggest hospitals – could be put to better use.
There will also be concerns over the extent to which this incredibly generous scheme is open to mass exploitation by the Aaron Hoopers of this world.
Motability came into being in 1977 after Jim Callaghan’s Labour government introduced the Mobility Allowance to help disabled people choose and pay for their own transport.
The charity was founded as a car-leasing scheme that would not only advise disabled people on suitable cars and any necessary adaptations but offer the best value for money. Before that, disabled people had to rely on a single-seat three-wheeler known as the ‘Invacar’ to get around.
Sir Keir Starmer and his Chancellor Rachel Reeves (pictured) may question whether Motability’s £4 billion reserves could be put to better use
Last year, a record 815,000 claimants made use of the Motability scheme, which has a fleet value of £14 billion
In the almost 50 years since, Motability has undoubtedly provided a lifeline to millions who may have been otherwise unable to get around or contribute meaningfully to society.
But over the decades, it has also ballooned in size. Its customer base grew almost 15 per cent last year ‘thanks to a growth in the eligible base of recipients’ of the qualifying disability allowances.
Today, its £7 billion turnover – accrued from the state benefits it receives plus revenue from the sale of used cars on the second-hand market – dwarfs the income of household names such as ITV (£4.1 billion) or Burberry (£3 billion).
To qualify for a Motability vehicle, the prospective customer must be in receipt of benefits for a disability or illness in the form of the Personal Independence Payment (PIP) or the Disability Living Allowance (DLA).
Both forms of benefit have two components: assistance for those who need help looking after themselves – ‘daily living’ – and ‘mobility’.
Those who qualify for the ‘mobility’ aspect of these benefits must be receiving the ‘higher’ rate, meaning they require a greater level of assistance.
They can then choose to exchange this part of their benefit – currently £75.75 a week – for a brand-new Motability vehicle. The benefit then goes directly to Motability Operations, the private company which runs the charitable scheme.
Next month, PIP is expected to rise by 1.7 per cent, to £77.04 per week, potentially adding more than £1 million a week to Motability’s already swollen coffers.
The generous lease terms include insurance, road tax, servicing, breakdown cover and tyre and windscreen repair.
Three drivers can be named on the vehicle’s insurance – which has prompted concerns that friends and relatives of someone who is eligible may in fact be utilising the vehicle for the majority of the time.
Last year, Motability made £2.5 billion from ‘rental revenue’, the vast majority of which would have come, ultimately, from the taxpayer.
So why is Motability currently enjoying record customer numbers? The answer may lie in the DWP’s eligibility criteria. Britain is in the grip of a welfare crisis, with Sir Keir Starmer describing the current system as ‘indefensible, economically and morally’.
An extraordinary £65 billion was spent on sickness benefits last year and that figure is forecast to increase by tens of billions before the next general election.
Nobody could dispute the obvious benefits of providing a vehicle to somebody who has difficulty walking. Apart from anything else, it may help them contribute to the economy.
But PIP ‘mobility’ claimants do not actually have to have a physical disability to qualify for a Motability vehicle. Claimants with a mental health condition, such as anxiety, can also apply. Indeed, last year 51 per cent of those claiming PIP owing to ‘depression’ were successful, according to independent benefits adviser Benefits And Work, which monitors the scheme.
Also successful were almost half of those who claimed PIP for ADHD, 35 per cent who claimed it for ‘bedwetting’, 66 per cent who claimed it for agoraphobia and 54 per cent who claimed it for Munchausen Syndrome – a psychological condition which involves the sufferer pretending to be ill. It is not clear how many of these recipients applied for Motability vehicles.
Claimants ‘suffering’ from obesity can also receive disability benefits, with 77 per cent of those who claimed PIP on the grounds of being overweight granted it last year.
Motability’s customer base grew almost 15 per cent last year ‘thanks to a growth in the eligible base of recipients’ of the qualifying disability allowances (file photo)
To qualify for a Motability vehicle, the prospective customer must be in receipt of benefits for a disability or illness in the form of the Personal Independence Payment (PIP) or the Disability Living Allowance (DLA) (file photo)
According to government figures, thousands of these claimants would also be eligible to claim a Motability vehicle.
One of the most notorious incidents involving a Motability recipient hit the headlines in May last year when a couple called Bernard and Ann McDonagh were convicted of a string of ‘dine and dash’ offences.
When the McDonaghs and their children went to the Bella Ciao restaurant in Swansea one day last April, they were clearly in the mood to splash out.
Their main courses included the two most expensive items on the menu – T-bone and fillet steaks – and when it came to pudding they ordered ‘double desserts’. ‘They wanted two brownies on a plate,’ the owner of the restaurant said later. But when the time came to settle the £329 bill for her party of five, Mrs McDonagh tried to pay with a savings account card. After this had been declined twice, she told the proprietor: ‘I’m going to go to the car to get another card, I’ll leave my son here as proof that you can trust me.’
Unfortunately, for Bella Ciao’s bottom line, McDonagh Jr made a run for it shortly afterwards and the family made their escape in a blue Ford Transit van.
It later emerged that the McDonaghs had been given the brand-new vehicle by Motability on a three-year lease but, far from putting them on the road to productive employment, it became their getaway vehicle.
Their choice of a Ford Transit is illustrative of the range of models that are available to Motability’s clients, who are presented with an eye-catching catalogue of gleaming new vehicles.
By handing over £60 of their weekly PIP mobility benefit, a claimant can find themselves driving away with an all-electric Dacia Spring – retail price £15,000 – for no upfront cost.
In exchange for the full £75.75 weekly allowance, a claimant can ‘purchase’ a petrol Nissan Juke SUV – retail price £23,000.
For people in dire need of assistance with transportation owing to a disability, these vehicles can be essential to their physical and mental wellbeing. But it becomes less clear as to the immediate benefits to the taxpayer when you look further down the list of vehicles purchased by Motability – which enjoys zero VAT on the hire and resale of its vehicles.
For an upfront payment of £7,999, customers can walk away with a brand-new BMW i4 M Sport, which retails at £50,000 and accelerates from 0-60mph in five seconds, or, for the same upfront price, a Mercedes-Benz CLA Coupe.
Once the lease on a vehicle is up, Motability sells it on the open market, with the profits going back into the company.
Bernard (left) and Ann McDonagh (right) used a vehicle provided by Motability to escape after committing ‘dine and dash’ offences
The pair used a brand new blue Ford Transit van given to them by Motability on a three-year lease (file photo)
Such is Motability’s dominance of the car market, it now accounts for around one in every five new cars purchased in Britain.
Motability’s recent growth has been masterminded by chief executive Andrew Miller, former boss of the Guardian Media Group, publisher of the Left-wing newspaper of the same name. He took over after former CEO Mike Betts stood down in 2018 after the Mail revealed details of his £1.7 million pay package – branded ‘obscene’ by the late MP Frank Field.
An NAO report prompted by the Mail’s investigation and released later that year discovered Mr Betts was also in line for a £2.2million bonus payout.
Despite previous criticism of executive pay, Mr Miller is still handsomely rewarded for this work overseeing Motability Operations.
Last year, his remuneration totalled almost £750,000 in pay and bonuses – a £40,000 increase on the previous year.
His number two, Matthew Hamilton-James, Motability’s chief finance officer, last year took home a pay packet of £691,000 thanks to a performance-related bonus scheme. In 2018, the NAO report criticised this practice given Motability’s lack of competition. That year, Mr Hamilton-James’s take-home pay was £550,000.
Meanwhile, there is the thorny issue of that enormous cash stockpile. The NAO could not have been clearer in its conclusions in 2018 after it was asked by then Work and Pensions Secretary Esther McVey to ‘check how taxpayers’ money is being used’.
Motability Operations claimed then, as it does today, that the cushion was required to protect it against market fluctuations.
However, the NAO concluded that ‘the advantages of government support for the scheme outweigh any disadvantages or limitations that Motability Operations must manage’.
Outlining what the then £2.4 billion slush fund could cover, it added: ‘Motability Operations holds enough reserves against operational and cyber risk to cover the scheme from a cyber-attack disabling its online vehicle sales platform, a security breach involving customer data resulting in compliance fines and the destruction of one of Motability Operations’ main offices without valid insurance all occurring in the same reporting period.’
In other words, it was holding more reserves than it would ever need to use. Now, there are calls for Motability to hand back the cash.
Labour peer John Mann, who has previously raised concerns about the company, says: ‘Motability is making too much money. It needs tighter criteria. There needs to be a return of some of this money they have accrued to the exchequer.
‘I also question why it is necessary for its customers to change to a new vehicle so regularly. Cars last a long time and the whole point of Motability must be to help people live a normal life. Three years per car is too short a time-frame.’
Following the media coverage of its inflated reserves – and no doubt with an eye on the court of public opinion – Motability Operations donated an astonishing £1 billion to the Motability Foundation, the firm’s charitable arm, in the financial year 2019-20.
This body provides grants to individuals and other charities to help those who may not be able to afford the cost of advance payments or vehicle adaptations which are not covered by the benefits they forgo.
However, the donation was so large that it far outstripped the foundation’s requirements. Since 2019, Motability Operations has donated more than £1.6 billion to the Motability Foundation – including £250 million last year – but only £430 million of that has gone to good causes.
As a result, the charity and a trust set up in 2019 to manage its cash are, between them, sitting on reserves of £1.7 billion. Last year alone, the charity’s total income of £311 million was more than double that received by the Alzheimer’s Society and Oxfam, and £100 million more than the amount received by Macmillan Cancer Support.
Former CEO of Motability Operations, Mike Betts (pictured left) stood down in 2018 after the Mail revealed details of his £1.7 million pay package
Labour peer John Mann says Motability is making ‘too much money’ and needs tighter criteria
The NAO commented on this anomaly in 2018, saying: ‘Motability [the charity] does not have a long-term strategy and it is not clear that it can absorb the donations it has received as a result of Motability Operations’ unplanned profit in a way that can maximise their effectiveness.’
Last night, the charity’s CEO Nigel Fletcher said it was a matter of being prudent: ‘As our income is not guaranteed, it is vital that we maintain sufficient funds to ensure we can continue our charitable activities to support disabled people now and in the future.’
While the charity’s future is secure, Motability Operations could soon be in for a rude shock. With the Government planning to make sweeping cuts to PIP as part of a shake-up of the welfare system, the size of Motability’s customer base may soon be affected.
Had the changes been rung earlier, of course, it would have spelled bad news for some of the scheme’s more dubious customers. Such as the ‘wheelchair-bound’, car-pulling strongman Aaron Hooper.
