The Motability scheme needs to be put into reverse

Keir Starmer’s government has taken some important first steps to bring the welfare budget under control. But expenditure on disability and incapacity benefits is still set to increase to almost £100 billion by the end of the decade, so more changes are needed. Every aspect of the welfare system must be examined to see if it is actually helping those it was designed to assist. The Motability scheme should be Starmer’s next target.

Introduced in 1977, Motability was set up with admirable intentions: to provide vehicles, scooters and powered wheelchairs to disabled people that would enable them to play a fuller part in society, including helping many of them to work. However, as with so many other parts of Britain’s welfare system, Motability has expanded way beyond its original purpose – and is now ripe for comprehensive reform. Our country’s poor financial state, and stretched public finances, means we cannot afford to have a gold-plated scheme providing a subsidised car to many who simply do not need one.

By the end of 2024, Motability supported a staggering 815,000 vehicles, up by 200,000 in the last two years alone. This huge rise has come at a time when the number of physically disabled people is relatively stable, although the number of those with mental disabilities has risen enormously since the pandemic. Motability now accounts for one in five new car purchases nationwide. In Northern Ireland, nearly half of all new vehicles registered are under the scheme. This number could escalate much further, as only around 40 per cent of those eligible for the scheme are actually claiming the benefit. This is a clear indication that the eligibility criteria is simply far too widely drawn.

From a financial perspective, the picture is stark. Yearly reports show an annual rental revenue of £2.8 billion and reserves of £4 billion tied up in the Motability fleet. This is money that could be transformative for other policy areas, or could provide greater support for the most vulnerable in our society.

The trouble with the Motability scheme is that eligibility relies solely on whether an individual receives the enhanced or higher mobility component of either the Personal Independence Payment (PIP) or Disability Living Allowance (DLA). That means that as the number of people qualifying for these benefits has risen, so has the number of those able to access vehicles through the Motability scheme.

There are several pitfalls from making the scheme open to all on PIP or DLA benefits. There is no form of means testing or credit checks: individuals who receive the higher rate of mobility allowance with at least a year left on it can choose to join the Motability Scheme. By opting in, they agree to exchange their weekly £75.75 or so in mobility allowance for access to a new vehicle. Once enrolled, the allowance is paid directly to Motability Operations by the benefit provider, bypassing traditional financial eligibility assessments.

The scheme is now available to a much wider group of people, rather than those who truly need the help and have no other alternatives. Only 35,000 vehicles are adapted to be wheelchair accessible. This shows how far it has gone beyond the original intentions of the scheme – to provide those with physical disabilities with a car. Likewise, the scheme is also available not just for those with physical disabilities, but with mental health conditions too. It is unclear why those with ADHD or depression need a heavily subsidised vehicle.

Unnecessary costs are synonymous with the Motability scheme. Not only does the scheme act as an all-inclusive package, including the vehicle’s insurance, road tax (Vehicle Excise Duty), breakdown assistance, and routine servicing and maintenance, but the vehicles are supplied brand new and are replaced every three years. While I would not advocate putting our disabled population – and I have had a disability since my teens – in a 20-year-old rust bucket, it seems an extravagance to replace brand new cars at a pace that the vast majority of our population can only dream of. It is important that the scheme’s vehicles are safe, but if the argument is that cars are a danger after just three years then travelling the roads of our country must be a more perilous experience than I have realised.

It is not just the age of the vehicles that is questionable. The cars offered on the scheme are also not just the basic models from low-cost manufacturers. Luxury brands such as BMW and Mercedes are offered in the scheme. In fact, if you opt for an electric car, the budget can be up to £55,000 and an electric charging port is installed at your home free of charge. Again, the question must be asked: is this necessary to keep people mobile? The distinction between essential support and lifestyle enhancement has been blurred.

None of this is to deny that, for many people, the Motability scheme provides a vital lifeline to enable them and their families to live a better life. However, the rapid growth in the numbers involved, the excessive generosity in the design of the scheme and the eligibility criteria show that it is time for a thorough reassessment.

The Motability scheme simply cannot continue in its current form, where cars are handed over to those who don’t need them. Mobility benefits should be for those with no alternative, for those who need something that is not a normal car – not for those that are able bodied but suffer from mental illness.