Reverse Gear: Why Motability is broken and how to fix it

• New research from the Adam Smith Institute shows how Motability, a government-backed scheme to improve the mobility of disabled people, has become so expensive. 

• 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.