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Volume 455: debated on Monday 8 January 2007

To ask the Secretary of State for Work and Pensions what the total cost to the Government is of the Motability scheme. (108219)

The Motability scheme provides a facility for recipients of the higher rate mobility component of disability living allowance or war pensioners’ mobility supplement to lease or purchase a car, powered wheelchair or scooter using their allowance. The scheme has some 450,000 customers at present.

The transfer of disability living allowance for those customers who choose to use the Motability scheme is executed by a unit within the Disability and Carers Service at a cost of £3.7 million per year. Administration funding of £2.8 million is also provided to cover Motability’s oversight role in respect of the scheme’s operations which are undertaken by service providers under contract to Motability, the provision of technical advice on adaptations and converted vehicles, and the administration of safety advice and equipment testing.

Motability also administers the Specialised Vehicles Fund on behalf of the Department, providing grants for heavily adapted vehicles for disabled people. Government funding for the Specialised Vehicles Fund for the current financial year is £9.1 million (Annually Managed Expenditure).

In addition, the lease of cars under the Motability Scheme, and the end of lease sale of Motability vehicles are value added tax (VAT) zero-rated. Motability vehicles are also exempt from insurance premium tax. These reliefs are worth around £240 million and £8 million respectively per year. VAT zero-rating also applies to the supply of certain adapted motor vehicles for the use of disabled wheelchair users.