My Lords, I hope not to detain the Committee for too long in the consideration of the administration of DWP matters and other things.
I am grateful for the support of the noble Lord, Lord Rooker, on this amendment, and it is to him that I acknowledge my interest in this matter. I was minding my own business at one of the famous uprating order debates, which I always attend, when the noble Lord used the occasion in an exemplary fashion. The man is a parliamentary genius at finding niches that come up only every so often, and in this case it is our old friend the Social Security Administration Act 1992. It does not come up that often but it needs to be explored a little more. I shall try to do so briefly but it is important—or at least I believe that it is.
The amendment seeks to insert a requirement for any relevant provider—for “relevant provider”, under the current circumstances noble Lords should read “Motability”—to provide governance reports to Parliament detailing certain matters. The amendment is important because the structure under which Motability provides its service is not straightforward; it is quite complicated. I am choosing my language carefully.
I make it clear at the outset that the Motability service has been absolutely invaluable to those whom it seeks to serve—namely, claimants who are eligible for the higher rate of the DLA mobility component and the enhanced rate of the personal independence
payment. The leases for the cars, motorised wheelchairs, scooters and other devices that it provides are a lifeline for hundreds of thousands of our citizens.
Before I go into the questions that are on my mind, I ask the Minister in his response to perhaps take a moment to explain exactly what Clause 20 is seeking to do in terms of the mechanics of reclaiming the expenses of paying sums in respect of vehicle hire. It is a puzzle to me that we are only now getting round to this. The scheme has been in operation since 1977. I do not know how much expense is being reclaimed here, but we are using the 1992 Social Security Administration Act. Therefore, it occurs to me that if there were expenses that should have been recovered, perhaps the 1992 Act would have been the best place to put that, and not the 2015 Welfare Reform and Work Bill. I am told that it might be as much as £1 million. Is that £1 million a year? How is it being recovered? Can the Minister give us as much information as possible on how Clause 20 is designed to operate?
As I understand it, the department makes available to Motability, as a relevant provider, the details of those who have the eligibility qualifications for these two disability benefits in order that an offer may be made to them by Motability. Motability is a long-established charity run by very distinguished people and is subject to the normal rules and regulations of charities. It also has a secondary charity, although I am not quite sure what it is designed to do, called the Motability Tenth Anniversary Trust Ltd, and it has a relationship with Motability as a charity. So there are some complexities in the first line of the operation. I hope that the department understands this better than I do. I am trying to make sense of all the individual parts of the machinery that is put in place.
The charity certainly has substantial resources available to it. Otherwise, it would not be able to make the generous and important offer of transitional support schemes. It has made grants of £150 million and £25 million in the last two financial years respectively to try to take some of the pain out of the removal of eligibility at the higher rates for some of the clients who are being reviewed under the government policy of reviewing DLA and transitioning it into personal independence payments.
What I also struggle to understand is the relationship between the charity and the operations company, which is a private company that carries out the work on behalf of Motability. Page 86 of the latest annual report and accounts for 2015 records that, for the highest paid director, the aggregate emoluments in respect of qualifying services totalled £944,719. Colleagues might now begin to understand the extent to which these companies and charities have, one could say, blossomed and developed. They certainly have grown to an extent that is perhaps not widely understood. The restricted reserves of the operating company are in the region of £2 billion; the annual turnover is £3.9 billion; and the asset base is some £7 billion. So this is a very big business. It even has a rating from Moody’s and Standard & Poor’s as an A+ investment risk, and it regularly raises money on the bond market.
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The worry for me is that all these individual elements have their respective regulators. The DWP obviously is able to see what it is doing in terms of the recommendations or the information that is passed to those eligible for these higher DLA benefits. The charity obviously is responsible to the Charity Commission for everything it does, and I am sure that it complies with the charity rules. Motability Operations is responsible, I guess, to the Financial Conduct Authority and various other Bank of England regulators for companies operating effectively at a City company level—almost banks. Indeed, the banks are the shareholders of the operating company, which means they get regulation from that direction.
My questions are about whether claimants are getting the full value of the assignations that they make. What are the tender processes that allow other providers to compete in this market? How does one become a shareholder in the organisation when all shares are held in the bank? Most of all—this is the real reason for asking for some responsibility in reporting to Parliament—who oversees the public interest in what is being delivered in the round? I am sorry that that is a bit technical. It is late at night and I understand that. But this important. I hope that the Minister will explain a little. If he would like to do that in a letter to the noble Lord, Lord Rooker, and me, that might save some time. The chance to consider some of these issues only comes up every so often. I hope the Minister does not mind that I am detaining the House slightly on what I consider to be an important issue.