Margaret Hodge: The granny with Sir Humphrey in her crosshairs

Former minister Margaret Hodge has finally found her vocation: making life a misery for civil servants who don't pull their weight. Oliver Wright meets Whitehall's nemesis

It used to be the case that you only needed to walk into an MP's office to tell the occupant's status. Junior parliamentarians had to share two or three to a room while the Prime Minister of the day had a suite of offices. The Liberal Democrat leader was allocated two rooms – both without natural light.

Now all MPs have their own offices but there are some that exude power. One belongs to the chairman of the Public Accounts Committee (PAC). With stunning views over the Thames and pictures of previous incumbents lining its wood-panelled walls, it harks back to a different age.

Harold Wilson, a previous incumbent, was said to have taken the job because of the status the room gave him.

Established in 1874 to inquire into "the receipt, issue and audit of public monies in the Exchequer", the job of the PAC chairman is simple and fundamental: to ensure the Government of the day spends our money wisely. But in a world of quangos, mutuals, semi-autonomous Government agencies and multibillion-pound budgets, it is rather more difficult than it was.

The old model where civil servants were responsible to ministers for how they spent public money, and ministers were responsible to Parliament (through the PAC) no longer appears practical.

So its present incumbent, Margaret Hodge, has decided it is time for a fight.

She is attempting to rip up decades of constitutional convention and hold civil servants directly to account to Parliament and ultimately to us. Sir Humphrey doesn't like it one bit.

Last year she publicly humiliated the head of Her Majesty's Revenue and Customs when her committee discovered he had secretly done a "sweetheart" deal with Goldman Sachs which let them off millions of pounds in tax.

She then broke with protocol to force HMRC's head lawyer to swear on the Bible to tell the truth after he tried to evade their questions on the cover-up.

Dame Helen Ghosh, the permanent secretary of the Home Office was also dragged against protocol to appear before her committee to explain the failures she presided over in her previous department. It all led the outgoing head of the civil service, Sir Gus O'Donnell, to write an uncharacteristically blunt letter to Ms Hodge accusing her of conducting "theatrical exercises in public humiliation", adding: "There is now a serious issue about the way you are perceived by the wider civil service."

But Ms Hodge – in person a petite and feisty grandmother aged 67 – has no intention of backing down. In fact, she seems to be rather enjoying the fight. "I'm a bit like Marmite. Some of them hate me," she says, laughing loudly before going on to hit back at the man she refers to as "The Gus".

"Civil servants come in from a range of backgrounds and they are a jolly bright bunch of people but they are simply not trained to fulfil the tasks that they have to do now," she says.

"Gus O'Donnell used to say it's because we don't pay them enough. I don't accept that as an excuse. People work for reasons other than cash. I think one could take the cohort of individuals who come in every year and train them in the appropriate competencies they need to run projects and manage finances."

This, she says, is notably lacking in a machine that was traditionally used for assessing policy rather than implementing it. "Traditionally the civil service was a policy-making organisation and it has a culture that comes out of that. But today's Government is much more complex – it is about managing projects, solving problems rather than standing back in a rather refined way and dreaming up new policy initiatives."

She is openly scathing about the abilities of some of those who inhabit Whitehall – at quite senior levels.

"I would characterise civil servants as two sorts," she says. "There are those who really do care about achievement and success and changing the world and there are those who just want the bit of paper off their desk and on to somebody else's desk so that they don't pick up any blame. How do you move up the ladder in the civil service? Well you do it by doing two years in a job and then switching. And that is just crazy because you end up never taking responsibility for a project from beginning to end. You're never accountable.

"If you're looking at another cock-up in a defence procurement or another vast IT project that went wrong you find that there has been inconsistency of leadership and lack of real clarity about who was responsible."

In many ways Hodge is the ultimate game-keeper turned poacher. Born in Egypt in 1944 to Jewish refugee parents (the family moved to England in 1950), Hodge has held executive positions in politics for most of her adult life. She was leader of Islington Council for 10 years in the 1980s and early 1990s before being elected MP for Barking and holding three ministerial jobs under the Labour government.

But it was that experience, she says, that made her believe the business of Government had become too complicated for transient ministers to fully hold their civil service officials to account. "Trying to get a policy changed if the officials did not agree with you was well-nigh impossible.

"Submissions would come up late. They would then come in a way which you didn't want. Sometimes the policy option you wanted wouldn't even be there so you'd have to go back and make them write it again.

"There was playing for delay because they knew you were transient. And that's one of the really important things – the political class is much more transient than the administrative class."

She cites several examples, including trying to get the building-listing scheme changed so that 20th-century buildings would not be included if they were no longer fit for the purpose they were intended. I tried really, really hard to change that so that we got the balance right. But unless I was completely on top and chasing, chasing, chasing it wouldn't have been progressed."

In her new role – to which she was elected by fellow MPs – she is determined to change that. She intends to hold civil servants accountable for the decisions they have made (or the agencies that they have run) even if they have moved on.

She is also interested in extending the remit of the PAC to include companies contracted by the Government to do the State's work.

The PAC already had the welfare-to-work contractor A4E in its sights and will soon recall the new head of HMRC, Lin Homer, to account for failures at the UK Border Agency which she used to run. All this has sent a chill through Whitehall. Sir Gus's letter was believed to have been written with the knowledge of all the other Permanent Secretaries – and he used his departure to be more forthright than he might have been otherwise.

But Ms Hodge is entirely unrepentant. Last month she gave a speech arguing for a fundamental reappraisal of the way Parliament scrutinises the executive on the behalf of the taxpayer and says she has the support of other select committee chairmen for her stance. "We cannot allow constitutional conventions of a different era to stop this," she says.

"We need to rethink where ministerial accountability stops and civil service accountability starts. These are really difficult issues and there are clearly tensions in redefining these accountabilities but just because it's difficult it should not become an excuse for not tackling it. It's an issue that needs to be tackled because its time has come."

In an episode of Yes Minister, of course, such high idealism would be bound to eventually fail. And Hodge certainly faces an uphill struggle in her fight with the mandarins.

But as she points out she has one important weapon ministers don't have: time. "I've got better job security in this job than I ever did when I was a minister," she says.

She has been elected by her fellow MPs for a five-year term (which could easily be extended) and doesn't need to worry about reshuffles.

Even in the world of Whitehall that's a long time for Sir Humphrey to sweat.

A life in brief

Born 8 September 1944, Egypt.

Education Bromley High School and London School of Economics where she got a third. "I wrote one essay in three years. I should have been forced to do more work. It was outrageous," she said later.

Career As leader of Islington Council, between 1982 and 1992, she was dubbed "Enver Hodge" after the Albanian despot for her perceived autocratic leadership style. She was also criticised for ignoring claims of systematic child abuse in Islington care homes. Elected MP for Barking in a 1994 by-election, she was an early ally of Tony Blair. She was made a minister in 1988 and served in the Departments for Education, Work and Pensions and Culture. However she never made it to the Cabinet – in part because Mr Blair considered her too "leaky". She was elected Chairman of the PAC in 2010.

Civil servants held to account

Dave Hartnett

Last December, Dave Hartnett announced he was retiring from HMRC in June after a mauling from Ms Hodge and her committee. While he has insisted he always intended to go then, many have suggested his departure was hastened by accusations uncovered by the PAC that he was responsible for signing off on sweetheart tax deals with some of Britain's largest companies.

Helen Ghosh

When the Permanent Secretary at the Home Office was called before the PAC to explain failures in the Rural Payments Agency, for which she used to be responsible, Ms Hodge began by saying: "I'm sorry I had to sign an order to encourage your presence and I perhaps ought to explain why – it's just that this committee is absolutely adamant that those who are responsible are also accountable. It's one of the very strong bees in our bonnet."

Lin Homer

Hartnett's replacement will barely have time to get her feet under the table before being hauled before Hodge's committee to explain failings at the UK Border Agency, which she used to run. It is all part of a tactic of making civil servants accountable for past decisions – even if they've moved on.

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