The money will go into the new endowment fund, to be used to enhance the lives of disabled people through helping with their wider transportation needs.
The money is in addition to £100 million already committed by Motability Operations as direct support for Motability Scheme customers. That money has been used to increase the bonus paid to customers for the return of cars in good condition, which amounts to a cash payment of £600 to most customers; for the addition of insurance for a third driver as standard on the Scheme; and to give increased support for wheelchair accessible vehicles.
Today’s exceptional charitable donation comprises Motability Operations’ entire profits for the year, plus the release of capital reserves of £370 million that was announced in June. This brings the capital reserve £370 million below the September 2018 balance sheet position.
Since capital reserves are not held as cash, but are used to purchase cars, the business has had to borrow on the financial markets to put the release into effect.
Motability Operations does not end its financial year until 30 September, so a final top-up donation may be made before finalising and publishing the financial results in December, at which point the precise profit position is ratified.
While in accounting terms the donation requires Motability Operations to record a loss this year, this does not affect the business’s ability to meet its liabilities, and it remains in strong financial health.
Sir Stephen O’Brien, Chairman of Motability Operations commented:
“We are pleased to be making this substantial donation which will help Motability improve the lives of many more disabled people. The Board is confident that following the rebasing to this revised capital position, and the donation of this year’s profits, the business remains robust, affordable for customers, and sustainable for the long term.
“In planning the donation, we have sought a balance between additional support for Scheme customers and seeking opportunities to improve the lives of a wider range of disabled people through donations to Motability, the Charity.”
