I Ran Motability for the Dwp – Here’s How IT Should Be Changed

Background of the Motability Scheme

The Motability Scheme, which provides cars to disabled people, is facing significant changes according to Matt Ryder, who was in charge of Motability policy at the Department for Work and Pensions (DWP) between 2015 and 2017. This scheme, partly funded by taxpayers, has been criticized as unfair and in need of major reform.

Proposed Changes to the Scheme

Ryder suggests several potential changes that could address the criticisms surrounding the scheme:

• End tax relief: One option is for the Government to end both VAT and Insurance Premium Tax reliefs enjoyed by Motability Operations. Ryder estimates this could raise £1.2 billion per year for the Treasury, although a spokesperson from Motability Operations disputes these claims.
• Offer second-hand cars: There is growing frustration that people on benefits are getting luxury models far beyond many working families. Ryder suggests offering second-hand cars as an alternative to new vehicles.
• Restrict PIP eligibility: He also proposes changing the way mobility is defined, particularly around mental health claims.

  Ryder argues that the underlying PIP benefit has gone out of control and that changes are necessary.

Rachel Reeves, the Chancellor, is considering imposing VAT on the scheme for the first time at the Budget later this month. This move aims to raise approximately £1 billion a year. Additionally, Reeves might reduce or end the tax breaks for new vehicles, potentially replacing them with second-hand cars.

Government’s Response and Potential Impact

Motability Operations has warned that a tax crackdown would increase up-front payment costs for disabled drivers. However, Ryder believes that Motability can absorb these changes without passing on the increased costs to disabled drivers. He argues that the company should accept less profit in exchange for maintaining its current benefits.

The Transport Secretary, Heidi Alexander, has expressed interest in seeing taxpayers’ benefit money used appropriately and has suggested that high-end cars like Audis, BMWs, and Audis may no longer be available on the scheme. This move could create more transparency and greater accountability but might also limit choices for disabled drivers who require specialized vehicles.

Conclusion

The Motability Scheme is under scrutiny as it faces potential changes to address criticisms of unfairness and inefficiency. These proposed reforms, including ending tax breaks and offering second-hand cars, aim to make the scheme more sustainable and equitable. As the Budget approaches, these changes could significantly impact disabled drivers and their access to necessary vehicles.