The Department for Work and Pensions has provided an update on alterations to the Motability service following heavy criticism. This week the Conservatives vowed to prevent people with mental health conditions from accessing a programme intended to assist disabled benefit recipients in obtaining vehicles through the welfare system.
During yesterday's House of Commons session, Minister of State (Department for Work and Pensions) Sir Stephen Timms revealed that certain 'tax reliefs' would be scrapped next July. The government has chosen to prohibit luxury marques such as BMW and Mercedes from being utilised.
The Government has confirmed that VAT will be applied to Advance Payments and Insurance Premium Tax will be imposed on Scheme leases, coming into force from July 2026.
Motability has stated that the modification will boost the expense of a lease on the Scheme, with the organisation expecting 'the average Advance Payment (upfront cost) of a vehicle, will increase by around £400 over the three-year package'.
When questioned by Labour's Shaun Davies about measures being taken to enhance the scheme, Sir Stephen responded: "Changes announced at the Budget will improve value for money for taxpayers while ensuring that the Motability scheme continues to provide outstanding support for disabled people."
Mr Davies emphasised the importance of the scheme, stating: "The Motability scheme stems from the vital principle that people with disabilities should be able to live a dignified and independent life. I have heard from several constituents about how accessible cars can help them into work and healthcare, which I welcome, but I have also heard from a number of others about those with questionable conditions being provided with cars that, quite simply, the average working family could not afford."
In response, Sir Stephen said: "I do agree with my hon. Friend, and I would be happy to meet him. Motability is an important scheme that does an important job. Some tax reliefs will be removed in July. Existing leases will not be affected, and neither will wheelchair-adapted vehicles. There will still be vehicles, with no up-front payment, that are affordable solely through the mobility component of personal independence payment, so the scheme will continue to do a great job but will give better value for money for taxpayers."
Helen Whately, Secretary of State for Work and Pensions, stated this week that the programme, designed to assist people with severe disabilities, cost £3bn last year and claimed it is now being accessed far more widely, including for conditions such as tennis elbow, acne and ADHD.
She stated: "So we're saying something like Motability should be go back to what it is intended for helping people with severe disabilities, not for instance, whether it's tennis elbow, acne or, as I just said, ADHD as reasons for getting a free motability car funded by the taxpayer, and I should say, and this is one of the things that's become so unfair about our benefits system."
In yesterday's Commons debate, Liberal Democrat John Milne challenged: "The shadow Secretary of State for Work and Pensions recently stated that 'millions are getting benefits for anxiety or ADHD along with a free Motability car.' That is clearly nonsense, because only 200,000 claimants-at most-would be eligible to apply in the first place, and many of them also have a physical disability, which is the real reason for the car. Does the Minister agree that this must rank as one of the least accurate claims ever made by a politician, despite the strong competition?".
To which Sir Stephen responded: "Well, choosing the most misleading claim is a tough contest, but the hon. Gentleman is right. The shadow Secretary of State's colleagues introduced PIP, with the current criteria, in 2013. They then had 11 years to change it if they thought doing so was necessary, but they did absolutely nothing. My review will look at the eligibility criteria for the mobility component of PIP.
"So we're saying something like Motability should be go back to what it is intended for helping people with severe disabilities, not for instance, whether it's tennis elbow, acne or, as I just said, ADHD as reasons for getting a free motability car funded by the taxpayer, and I should say, and this is one of the things that's become so unfair about our benefits system."
"The shadow Secretary of State for Work and Pensions recently stated that 'millions are getting benefits for anxiety or ADHD along with a free Motability car.' That is clearly nonsense, because only 200,000 claimants-at most-would be eligible to apply in the first place, and many of them also have a physical disability, which is the real reason for the car. Does the Minister agree that this must rank as one of the least accurate claims ever made by a politician, despite the strong competition?".
"Well, choosing the most misleading claim is a tough contest, but the hon. Gentleman is right. The shadow Secretary of State's colleagues introduced PIP, with the current criteria, in 2013. They then had 11 years to change it if they thought doing so was necessary, but they did absolutely nothing. My review will look at the eligibility criteria for the mobility component of PIP."
Paulette Hamilton emphasised the significance of the scheme, stating: "A constituent of mine with severe health needs recently told me that she gained employment only after she was able to learn to drive and then secure a car through the Motability scheme. Can the Minister set out what further steps the Department is taking to ensure that disabled people with health needs receive the support they need to gain access to work and to take part fully in the things they enjoy?".
In response, Sir Stephen said: "There is a great deal of work to be done: the disability employment gap has been stuck at around 30 percentage points ever since 2010. We have talked already today about Motability, which is key for enabling many disabled people to get to work. After the changes next July, there will still be a wide range of vehicles available in exchange solely for mobility benefit. Access to Work is also extremely important. We consulted earlier in the year through our Green Paper on reform to Access to Work, so that we can help and support more people, and we will be bringing forward proposals along those lines in the new year."
Regarding the changes in the November budget, Motability commented: "The tax changes will increase the cost of a lease on the Scheme and we anticipate the average Advance Payment (upfront cost) of a vehicle, will increase by around £400 over the three-year package. We will continue to provide a range of around 40 to 50 vehicles available to lease with no upfront payment.
"Changes to the Scheme's package are expected to be introduced from July 2026. Motability Operations, which runs the Scheme, will begin engaging with customers about the proposed changes in spring 2026. Proposed changes to the leasing package will undergo disability impact assessment by the Motability Foundation, which oversees the Scheme, before any changes are approved, announced and implemented. As the Scheme evolves and we fully understand the impacts changes may have on disabled people, the Foundation will also need to consider how its grant programmes best support those most in need."
To watch the debate click here.