I am grateful to my noble friend and I will come to that very point because it is crucial. I am not clear what the banks get out of this; I do not believe that they are doing it for nothing. The Library has not been able to explain it to me anyway.
That brings me to my final point and I will cover the points made by my noble friend. As the noble Lord, Lord Kirkwood, said, there is another £180 million in another charity within the Motability charity sitting there doing virtually nothing. The Motability Tenth Anniversary Trust was set up by the Motability charity. It has the same trustees, an income of £50 million a year and expenditure of £5 million. It has assets of £180 million. It has no employees or volunteers, so it cannot possibly be fulfilling the public benefit rules for charities on those figures. I checked them again on the web the other day.
The website AccountingWEB had some interesting points to make. It referred to the asset seemingly sitting around not doing much. The original funding for this charity within a charity was 50% from Motability Operations, the company, and 50% from the DWP. There is a direct link with this charity within a charity—50% of it was funded by the DWP to start with. Does it mean that the not for profit status of operations is maintained by recycling the Motability Operations profits back into the Motability Tenth Anniversary Trust in order to swell the coffers, and so avoid tax? It asked whether this incestuous arrangement is there because someone has worked out a way to get their hands on it, and in due course extract it from the trust. Again, this is a direct link—DWP funded 50% of the charity within a charity. It funds 60% of the main charity so it is directly responsible for the salaries of the charity staff. I fully accept it is the Motability Operations company that is responsible for the real bankers’ salaries—almost £1 million for the chief exec.
I am coming to the end. The Treasury, I understand, loses around £350 million in VAT by this whole complex set-up. Operations installed a new IT system in August. It cost around £100 million but did not provide any upgrade to functionality. I am reliably informed that this required a lot of hospitality and team rebuilding—all on the cash of people with a disability.
Maybe it is time, as the notes on Clause 20 say, or envisage, to bring some competition into the market because there is no competition. Clause 20 is set up where it envisages that there might be another provider. Well, there is not. In some ways, if the DWP wanted to get its hands clean and do some real governance on this—and the Government, because they are all part of the issue—a bit of competition would not go amiss. That is where we come in. The opportunity of Clause 20 is useful for the Select Committee in the other place which, as far as I know, has not batted an eyelid. The issue has been raised very occasionally but not properly. It has never been taken seriously by the Government or the department.
10.15 pm
I look forward to the Minister’s reply as he will remember that he started this—I do not say that in an accusatory way; I am a member of his fan club for doing so—with his reply to the question of the noble Lord, Lord Forsyth of Drumlean, about the relevant salaries on 2 December 2013 at col. 3 of Hansard. With that reply he alerted the House to this issue. When “Noble Lords: Oh!” appears in Hansard, as it did at col. 3 on 2 December 2013, that means there was a very big reaction to the Minister’s contribution. As I say, I look forward to the Minister’s response.
I do not expect a full response tonight, but I do not expect this matter to go away, either. Millions of pounds are involved, stuck away in charities, apparently doing nothing, and people are being paid fortunes as chief executives of charities that are directly funded by the department, so there cannot be any excuse for the charities concerned. I know it will be said that this is up to the trustees, but the trustees have been there since day one. The confusion between governance and management is such that we will never have any change.
Therefore, it was quite right of the noble Lord, Lord Kirkwood, to bring this issue to the attention of the Committee.