"Scam of the free BMWs for thousands as friends and relatives of the disabled use luxury 'Motability' cars." Daily Mail, 20 June 2011
With the Government's Welfare Reform Bill completing its passage through the House of Commons last week, there has been much scrutiny in the media of how and where public money is being spent on benefits.
Yesterday the Sunday Times ran a piece on an unlikely-sounding group of claimants: those receiving taxpayer-funded BMWs. The article's findings were subsequently reported in today's Daily Mail and Express.
So is the Mail right to conclude as it does that there is a "scam of the free BMWs for thousands"?
The media reports investigate the supposed abuse of a charitable scheme run by a non-profit company called Motability, which makes vehicles available to the higher rate claimants of the mobility component of the Disability Living Allowance (DLA).
The scheme, backed by the DWP, allows those in receipt the higher rate mobility component for DLA to use the £51.40 weekly allowance to hire a vehicle, either on a contract or hire-to-purchase basis.
Given that participation in the Motability scheme costs the claimant the mobility allowance that they would otherwise have been able to spend elsewhere, it is not at all clear that the vehicles that are loaned this way are 'free' to those using them, even if the bill is ultimately footed by the taxpayer.
However the Mail's claim that up-market BMWs in particular are being handed out for 'free' is demonstrably inaccurate. While four thousand models of car are available under the Motability scheme, some of the more expensive ones require the user to provide an up-front payment from their own funds.
Of all the BMWs listed in Motability's vehicle guide, all require this up-front payment of between £1,399 and £9,999. The specific model used as an example in the Sunday Times article, the BMW 320d, would cost between £2,899 and £5,999.
It is in this light that we need to interpret the claim by the Sunday Times that Motability "receives more than £1.4 billion a year from the Department for Work and Pensions" - repeated by the Mail and the Express.
While the impression might be that this is a direct subsidy on top of the existing welfare bill, this is not the case.
As Disability Minister Maria Miller noted in a Parliamentary Answer: "Motability is largely self financed and the only funding the Department for Work and Pensions gives the scheme relates to the Specialised Vehicles Fund." In 2010/11, this DWP funding totalled £18.2 million, a long way short of the £1.4 billion claimed in the press.
Instead, this is calculated by taking the mobility component (£51.40) over a year (£2,672.80) for all of the 540,351 people involved in the Motability scheme, giving a total contribution of £1.44 billion. As we've already noted, this is money that would have been paid out to fund the transport needs of higher rate mobility DLA claimants regardless of whether or not the scheme was in existence.
While the crux of the Sunday Times' allegations that the Motability scheme was being misused by friends and relatives of DLA claimants relies on that paper's own investigations, and is therefore something which Full Fact cannot comment upon, many of the claims made in support of the piece require a good deal of contextualisation.
Importantly, we should note that most of the funding for the 'free' scheme comes from the higher mobility allowance, money which is due claimants regardless of whether or not they participate in the Motability scheme. The DWP does supplement this with £18.2 million in grants, but this makes up a relatively small chunk of the organisation's turnover.
The use of a BMW as an example of a 'free' car is particularly misleading, as DLA claimants wishing to have use of one through the scheme must actually put forward several thousands of pounds of their own money to qualify.
Isn't it nice to have the whole picture?
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