The former second perm sec in the Department for Work and Pensions-turned benefits advisor has been both poacher and gamekeeper in Whitehall. He shares the lessons from both sides of the fence, including for Brexit, with Richard Johnstone.
Adorning the walls of the Social Security Advisory Committee’s office are portraits of welfare ministers through the ages. In the room where Civil Service World meets committee chair Paul Gray, there are photos of – among others – Barbara Castle, Dick Crossman, Enoch Powell and Rab Butler, while there are what Gray calls “some relatively more recent ones” elsewhere.
The SSAC, which provides impartial advice on social security legislation to the Department for Work and Pensions and shares its Caxton House building, received the photos when they were no longer wanted by the ministry, says Gray.
“They were going to throw them away. They have got the most recent ones, but they clearly have a very short-term view of history,” he jokes. “And I guess in a modern open plan office, where do you put them?”
A short-term view is not something you could accuse the SSAC of. Formed in 1980, the committee scrutinises secondary legislation to review the impact of rules and regulations on benefits, holding evidence sessions with civil servants who are developing the policy.
No other policy area has such a body, and its unique role can be traced, Gray says, to changes to the social security system introduced early in the Thatcher government. In 1980 the commission that oversaw supplementary benefit – a predecessor to income support – was abolished, and its functions subsumed into the Department of Health and Social Security. This commission had operated the benefits payments system with a degree of discretion, so the SSAC was formed to maintain that independent input.
“A deal was essentially struck with parliament that said: ‘We will now set up this statutory advisory body, but very carefully and clearly defined’,” says Gray. “So the role does not extend to scrutinizing primary legislation, but once primary legislation has reached the statute book, the SSAC is required to scrutinise any secondary legislation.”
Committee members meet 10 times a year to examine the detailed rules of new regulations for working-age benefits as well as getting policy updates from the department. Current members of the committee include Carl Emmerson, the deputy director of the Institute for Fiscal Studies, Chris Goulden, the deputy director of policy and research at the Joseph Rowntree Foundation, Rachael Badger, part of the finance and transformation team at Citizens Advice, and Seyi Obakin, the chief executive of homelessness charity Centrepoint.
Members are appointed by ministers, but Gray says he has worked to make sure there are a good range of perspectives and skills and backgrounds. Those portraits of ministers past are particularly apposite as the committee also needs to understand how proposed changes such as Universal Credit (see box) fit into the pre-existing world of regulations.
“We need people who understand the nuts and bolts of detailed regulations, which is not everyone’s pet subject – this is technical, legal stuff and you need to understand how any given set of regulations relates to the last 30 years of predecessor regulations,” Gray notes. “But also you need people who are quite analytical, who understand the latest research around social security and so on.”
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Gray’s own history makes him well placed to head the committee, which he has led since 2012. A career civil servant, he joined government as an economist in the Treasury and held a number of roles at the finance ministry. This included working with Robert Devereux – soon to retire as permanent secretary at DWP. “When I was HR director in the Treasury I organised a secondment for him to go and work in Guinness for a few years and we have worked together here [in DWP],” he says. Gray then moved into what he calls “large operational departments” in the last decade of his career before leaving the service in 2007.
“I spent a few years as director general and then second permanent secretary in DWP, or at that time it was still the Department of Social Security – it became DWP while I was here [in 2001],” he says. “And then when HMRC was being established [in 2005] I went off there, first as deputy chairman than as executive chairman.”
At the DWP, Gray was the senior sponsor of the SSAC within the department – “I’m not quite sure which is the gamekeeper and which is the poacher, but I’ve operated on both sides,” he says – and this has informed his two terms in the chair, which he will leave next July.
“My perception coming into this role was obviously informed in part by what I’d seen operating from the government side of it, which was that the committee had tended to be quite a severe critic of successive governments,” he notes.
“This isn’t a party political thing – Labour ministers or Tory ministers across the 1980s and 90s would say it had a very critical tone. And the net result of that was that the committee’s recommendations had very little impact.”
Gray has therefore tried to ensure the committee is “a constructive critic” when it holds evidence sessions with civil servants.
The committee can only recommend and publicise its views, he notes, it cannot halt policies. “Ultimately it is up to government to say: ‘We agree’ or ‘we don’t agree’. So when I was invited to take over the role, I thought quite hard about how a body like this should position itself. We are here to give the best possible advice on the detailed articulation of that policy, and how best to deliver it.”
One of the changes he has made is to make the committee less adversarial for the civil servants that come before it. “One of the things that struck me from observing the committee in my governmental role was that even the setup of the room made it feel select committee-like,” he says. “We were all sitting round and the hot seat is over there and we’re going to look quite severely at you and ask you challenging questions.
“Inevitably that is what needs to go on – this is a process of asking challenging questions – but as soon as I took over we very carefully thought about those soft features, like how to organise a room: let’s not have too much distance between the committee members and the poor victims who are sitting there to be interrogated.”
Gray, who has been that “victim” in many select committee hearings himself, says this inevitably leads to a defensive mindset. “We’re not going to get the best out of people if we do that, we want a constructive dialogue,” he says.
However, he notes that it remains “quite a tough gig for middle-ranking civil servants to come along and face 13 or 14 people who are moderately expert in their background and have the ability between them to ask questions from all over [the policy area]”.
“I’m not sure it is something that people positively look forward to, it is a challenge, but the aim is to make it a constructive engagement,” he says.
Committee member Rachael Badger told CSW that it is “a privilege to serve” and take part in these sessions. “We work hard to really understand what the policy, legislative and operational delivery challenges are for the department – whether on designing and rolling out a new policy like Universal Credit, or on long-standing challenges such as making the right decisions first time on entitlement to benefits,” she says.
“I enjoy being a member of SSAC because we have a track record of working constructively with ministers and helping them to make good, evidence-based policy decisions.”
Gray says such a role is vital because so much of the detail of the benefits system is set out in secondary legislation. By contrast, other policies – in areas like education – tend to have more detail contained in the primary legislation.
However, one major exception to this rule is likely to dominate government for years to come: Brexit.
With those ministers from the past looking on, Gray notes that implementing the legislation around the UK’s exit from the European Union is another area where it is important to respect history.
“Here we have development of law over 44 years, certainly in some areas of government – agriculture and the Department for Food, Environment and Rural Affairs is a primary example – you have a lot of stuff enshrined in European legislation which is currently applicable in the UK as elsewhere,” he says.
The government plans to deal with this through the European Union (Withdrawal) Bill, which will bring all existing EU law into UK legislation. Ministers will then use so-called Henry VIII powers to rewrite some laws without consulting parliament if technical changes are needed to keep the laws working properly.
Although Gray says that “some lurid headlines about Henry VIII are slightly off beam”, he has proposed creating committees similar to the SSAC to review these tweaks.
Committees could be created to review legislation in areas where Britain will have to make its own laws from 2019, which as well as the environment will include immigration, customs and trade.
“Unless the government, as it develops what the UK’s post-Brexit agricultural and environmental support look like, decides to start passing some incredibly complex primary legislation, it seems to me in that area they’re liable to have a need for some really detailed secondary legislation,” he notes.
This presents a chance for government to learn the lessons from one of Whitehall’s more successful – if understated – scrutiny innovations.
“In today’s very complex world, getting the right balance of overall governance – as opposed to government – requires a more subtle set of structures and engagements that includes slightly more checks and balances,” says Gray.
“I would say SSAC was an early example, historically, of trying to bring that check and balance into the system and for Brexit I think there are some quite close parallels that can be drawn.”
In this case, those aware of their Whitehall history might be well advised to repeat it.
Universal Credit
Universal Credit has been the biggest issue of Gray’s tenure at SSAC, and as the scheme rolls out nationwide, the watchdog has pledged to conduct a review of its implementation.
Gray says implementation of the scheme, which merges six working age benefits into one payment, had been a “massive operational challenge” for the department.
“As far as the policy is concerned, I would say there has been and there continues to be some learning as we go along,” he says. “We have had quite a lot of amending regulations to Universal Credit since the first ones, but they haven’t changed the nature of the policy. They have refined it, in some cases improved it, but the big issues about rollout are essentially operational.”
He praises the coalition government for taking on the challenge that had been considered, but ultimately rejected, by other governments as too big a change.
“They massively underestimated initially the scale of that challenge, but over a period of six or seven years we’ve got to a place where they have a rollout process that, while still challenging, seems to learn those lessons about operational delivery.”
In October, the government confirmed that Universal Credit would be available in all Jobcentres to new single jobseekers and the full service, which covers families, would soon be in place at nearly 150 Jobcentres.
Most recipients will receive their Universal Credit payments monthly rather than weekly, while the time before recipients are eligible to receive their first payment has increased from three days to seven days.
As the payments are made a month in arrears, this means recipients often wait a total of six weeks for their first payment, which has led to concerns that the scheme could increase levels of homelessness and children being taken into care.
Gray says the committee recommended that the time delay in the scheme be reduced but this had not been accepted by ministers.
“The committee absolutely buys the rationale for moving to a monthly system for the majority of people rather than a weekly system,” he says.
“That is positive in terms of work incentives as it is how most people get remunerated.” The committee felt that the addtional waiting period, however, “risked being the sort of straw that broke the camel’s back,” he says.
Government did adopt a more transparent approach to the granting of short term budgetary advances, Gray adds, and the committee plans to scrutinise the rollout as it continues: “Keeping a view on what is actually happening on the ground, as distinct from looking at the sets of legal regulations, I see as a really effective part of our constructive challenge role.”