Government department ‘employing tens of thousands’ rejects cycle to work scheme

DWP refuses to offer workers government-endorsed tax-free bike buying opportunity

A UK government department that employs around 100,000 people around the country has rejected calls to implement a bike to work scheme that could save its employees money and cash on its own wage bill.

Responding to a Parliamentary question this week, minister for disabled people at the Department for Work and Pensions (DWP) Mike Penning, said: “After careful consideration of the costs, opportunities and consequences of offering a formal cycle to work scheme, this Department decided not to run a formal cycle to work scheme.”

It means the DWP and the Ministry of Defence (MoD) remain the two most high-profile departments not to offer employees a government-endorsed discount bike purchasing scheme. Most departments are believed to offer a dedicated discount bike buying programme.

Instead, Penning said the department, which includes workers at Jobcentre Plus and the Child Support Agency, would continue to give employees the chance to buy bikes through a salary advance programme up to a maximum of £1,000 or offers through the employee discount scheme.

The decision has frustrated cycle to work scheme providers, which give workers the chance to buy a tax-free bike and associated gear to a value of £1,000 and repay it through salary sacrifice. It means the repayments are deducted before tax, which lowers the purchase cost to the employee and means the employer saves money on their secondary National Insurance contribution.

Daniel Gillborn, director at Cyclescheme, one of the UK’s biggest cycle to work providers called it a missed opportunity for "tens of thousands" of DWP workers. 

“If the [employee] discount scheme is 32 per cent or above, he’s got a case, because 20 per cent tax saving for lower rate taxpayers and 12 percent National Insurance saving means 32 percent – that is what his employees would save if the DWP ran a cycle to work scheme.

“On top of that, DWP as an employer would save 13.8 percent in employers National Insurance contributions.”

Gillborn said he – on behalf of the Cycle to Work Alliance – and Halfords had met with Richard Burden, Labour Shadow Transport Secretary who offered to question the DWP and MoD on whether they had plans to introduce a cycle to work scheme.

A DWP spokesperson told BikeRadar that DWP employees who bought bikes through the salary advance scheme owned the bike once they had paid back the cash.

Yesterday, Conservative MP Anna Soubry, an under-secretary at the MoD also reaffirmed that department’s decision not to implement a dedicated bike buying scheme, stating service personnel could claim a Home to Duty travel allowance and civilians a £1,000 interest-free loan instead.

Related Articles

Comments

Back to top