Lana Hempsall: Motability reform? It’s time to scratch below the surface
The headline tells the story.
Lana Hempsall is a Policy Fellow at Onward, a County Councillor and founder and director of the Welfare Information Network, looking to raise awareness of the flaws and misuse of the welfare system.
The Motability scheme, which provides taxpayer funded vehicles to disabled people, has come in for increasing criticism over rapidly growing costs. In response, in the last Budget, the Chancellor announced changes to prevent luxury vehicles being offered. But that was never more than the most minor cosmetic adjustment, designed to deliver a quick positive headline while avoiding addressing the more fundamental problems with the current scheme.
Motability’s flaws do not start with the relatively small number of people who are driving BMWs or Mercedes. The problem is its sheer scale, cost and direction. Symptoms of a scheme that was designed with the best of intentions in the 1970s but which has grown far beyond its original purpose.
The scheme’s latest annual report lays this bare.
As of 30 September 2025, the Motability fleet has grown by 9.8 per cent in a single year to 890,000 vehicles. That is an extraordinary figure. Nearly one in five new cars sold in Britain now goes through this taxpayer funded scheme. In the past year alone there were 186,000 new applications including renewals, reflecting a 7.1 per cent increase in the eligible base of recipients of qualifying disability allowances.
Financially, the numbers are equally striking. Rental revenue, funded through taxpayer money, has risen to £3.464 billion, up from £2.806 billion the previous year. And yet despite generating more than £3.4 billion in income, Motability reported an operating loss before tax of £158 million.
Those aren’t the numbers of a marginal programme helping those unable to use traditional transport that Motability claims to be. Instead they tell the story of a vast, expanding leasing operation embedded within, and leaching off the benefits system and yet still making a loss.
But how is it possible for a scheme that is funneled customers by the government to be losing £158 million a year?
Part of the explanation lies in the rise in insurance claim expenses, increasing sharply from £491 million in 2024 to £655 million in 2025. However much of the blame lies with the additional services and products the scheme offers to participants. The annual report also highlights a series of one-off initiatives that Motability says were designed to help customers cope with the cost-of-living pressures in that year. including a £750 one off payment to 894,000 customers. But the taxpayers paying for this generous payment – which cost in total over £600 million – received no such financial support for them. In addition, Motability cars come bundled with insurance, servicing, road tax, …
The headline tells the story.
Lana Hempsall is a Policy Fellow at Onward, a County Councillor and founder and director of the Welfare Information Network, looking to raise awareness of the flaws and misuse of the welfare system.
The Motability scheme, which provides taxpayer funded vehicles to disabled people, has come in for increasing criticism over rapidly growing costs. In response, in the last Budget, the Chancellor announced changes to prevent luxury vehicles being offered. But that was never more than the most minor cosmetic adjustment, designed to deliver a quick positive headline while avoiding addressing the more fundamental problems with the current scheme.
Motability’s flaws do not start with the relatively small number of people who are driving BMWs or Mercedes. The problem is its sheer scale, cost and direction. Symptoms of a scheme that was designed with the best of intentions in the 1970s but which has grown far beyond its original purpose.
The scheme’s latest annual report lays this bare.
As of 30 September 2025, the Motability fleet has grown by 9.8 per cent in a single year to 890,000 vehicles. That is an extraordinary figure. Nearly one in five new cars sold in Britain now goes through this taxpayer funded scheme. In the past year alone there were 186,000 new applications including renewals, reflecting a 7.1 per cent increase in the eligible base of recipients of qualifying disability allowances.
Financially, the numbers are equally striking. Rental revenue, funded through taxpayer money, has risen to £3.464 billion, up from £2.806 billion the previous year. And yet despite generating more than £3.4 billion in income, Motability reported an operating loss before tax of £158 million.
Those aren’t the numbers of a marginal programme helping those unable to use traditional transport that Motability claims to be. Instead they tell the story of a vast, expanding leasing operation embedded within, and leaching off the benefits system and yet still making a loss.
But how is it possible for a scheme that is funneled customers by the government to be losing £158 million a year?
Part of the explanation lies in the rise in insurance claim expenses, increasing sharply from £491 million in 2024 to £655 million in 2025. However much of the blame lies with the additional services and products the scheme offers to participants. The annual report also highlights a series of one-off initiatives that Motability says were designed to help customers cope with the cost-of-living pressures in that year. including a £750 one off payment to 894,000 customers. But the taxpayers paying for this generous payment – which cost in total over £600 million – received no such financial support for them. In addition, Motability cars come bundled with insurance, servicing, road tax, …
Lana Hempsall: Motability reform? It’s time to scratch below the surface
The headline tells the story.
Lana Hempsall is a Policy Fellow at Onward, a County Councillor and founder and director of the Welfare Information Network, looking to raise awareness of the flaws and misuse of the welfare system.
The Motability scheme, which provides taxpayer funded vehicles to disabled people, has come in for increasing criticism over rapidly growing costs. In response, in the last Budget, the Chancellor announced changes to prevent luxury vehicles being offered. But that was never more than the most minor cosmetic adjustment, designed to deliver a quick positive headline while avoiding addressing the more fundamental problems with the current scheme.
Motability’s flaws do not start with the relatively small number of people who are driving BMWs or Mercedes. The problem is its sheer scale, cost and direction. Symptoms of a scheme that was designed with the best of intentions in the 1970s but which has grown far beyond its original purpose.
The scheme’s latest annual report lays this bare.
As of 30 September 2025, the Motability fleet has grown by 9.8 per cent in a single year to 890,000 vehicles. That is an extraordinary figure. Nearly one in five new cars sold in Britain now goes through this taxpayer funded scheme. In the past year alone there were 186,000 new applications including renewals, reflecting a 7.1 per cent increase in the eligible base of recipients of qualifying disability allowances.
Financially, the numbers are equally striking. Rental revenue, funded through taxpayer money, has risen to £3.464 billion, up from £2.806 billion the previous year. And yet despite generating more than £3.4 billion in income, Motability reported an operating loss before tax of £158 million.
Those aren’t the numbers of a marginal programme helping those unable to use traditional transport that Motability claims to be. Instead they tell the story of a vast, expanding leasing operation embedded within, and leaching off the benefits system and yet still making a loss.
But how is it possible for a scheme that is funneled customers by the government to be losing £158 million a year?
Part of the explanation lies in the rise in insurance claim expenses, increasing sharply from £491 million in 2024 to £655 million in 2025. However much of the blame lies with the additional services and products the scheme offers to participants. The annual report also highlights a series of one-off initiatives that Motability says were designed to help customers cope with the cost-of-living pressures in that year. including a £750 one off payment to 894,000 customers. But the taxpayers paying for this generous payment – which cost in total over £600 million – received no such financial support for them. In addition, Motability cars come bundled with insurance, servicing, road tax, …
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