Fixing Motability

Motability is a government-backed scheme to improve the mobility of disabled people.
New research from the Adam Smith Institute shows how it has become so expensive and proposes ways to reduce the cost.
Motability spent £8.1 billion last year buying new cars, which, for context, is £1billion more than the Prisons budget.

By supplying brand-new vehicles rather than second hand options, Motability spent £3.4 billion more last year – higher than the school maintenance and repairs budget.
This waste is encouraged by VAT and Insurance Premium Tax reliefs worth £1.2 billion per year.
But, it’s not just overspending on new vehicles that’s a problem.
In just 5 years, enhanced-rate PIP mobility claims, the gateway to Motability, have increased by 80%, driven in large part by new mental health claims.
And, unlike other government-backed monopolies, Motability, the overall revenue of which is the same size as the prisons budget, faces virtually no oversight and sets its own governance rules.
As we approach the 50th Anniversary of the creation of Motability, this paper proposes ending tax relief on Motability vehicles, tightening the criteria for eligibility and breaking its monopoly on provision.