Interview: Margaret Hodge on wasteful spending, her favourite perm sec and why civil servants "loathed" her

Written by Suzannah Brecknell on 13 October 2016 in Interview

The outspoken former chair of the Public Accounts Committee chews the fat with Suzannah Brecknell

Who? Margaret Hodge became an MP in 1994, after a 20-year career in local government. She held a number of ministerial posts under Tony Blair and Gordon Brown. In 2010 she became the first elected chair of the Public Accounts Committee and has just written a book sharing her recollections and conclusions after five years scrutinising government spending.

We discussed

Her favourite piece of Public Accounts Committee trivia
"There are two. One is the fact that three chairs of the PAC had been in prison and they were all Labour MPs. I thought that was quite amusing – although they were all in prison for good reason. Two of them were conscientious objectors and one of them supported the suffragettes.

"My most favourite is one about the guy who was told to close the Ministry of Information at the end of the First World War. He spent a lot of unauthorised money, double-paid two people to act as consultants on top of their normal work, and paid someone else for coming into work from his posh house in the country. He was ordered to pay it all back and he did, out of his own pocket."

Margaret Hodge: Theresa May must show “radical determination” to change culture at top of civil service
Margaret Hodge calls for new parliamentary committee to end HMRC's tax "secrecy"
Margaret Hodge blasts ex-Treasury boss Sir Nick Macpherson over new bank job 

The value of public spending
"I haven’t written the book as a diatribe against public expenditure, but rather because I am a such passionate believer in the power of public expenditure to transform people’s life chances, that I want it to be better used.

"I’m essentially an optimist about this, and that optimism comes from the frontline. There are millions of brilliant people working in schools, in the police service, or on the counter at local authorities. We need to value them."
What she learnt as PAC chair
"One lesson that came out at me after five years was that the enormity of the waste is gobsmacking. There are so many problems that we need to tackle: the failure to learn from mistakes, the siloed working in government, the lack of appropriate skills at the civil service level, the weakness of the centre, the lack of accountability..

"All these things are systemic failures that we completely fail to grapple with because nobody sees reforming processes or reforming systems as being the sexy side of politics, either within the civil service or within politics. It’s not just the civil service’s fault, it’s politicians’ fault too."
Francis Maude
"I know he was completely loathed by the civil service, as indeed was I, but both of us were really committed to civil service reform. I didn’t agree with all his reforms and he probably wouldn’t agree with all of mine but we were both committed to try and get better value, from very different perspectives.

"I don’t think bringing in more outsiders would change the impartiality of civil servants"

"One thing we do agree on: I would reform the centre and put the three departments together so you have Treasury, Cabinet Office and Number 10 all working together. The current system worked very well with Cameron and Osborne, but appallingly with Brown and Blair. So you force better working. A strong centre is essential to the learning of an organisation."
‘Outsiders’ in the civil service
"We’re talking at a time when Theresa May has just come in and has sacked the entire team of Notting Hill luvvies that ran our country for six years. I would urge her to show the same radical determination and say: 'I’m going to make sure a third of my perm secs come in from outside.'

"I don’t think bringing in more outsiders would change the impartiality of civil servants. Actually, interestingly enough, if that is seen as politicisation that says a lot about what is wrong with the civil service. They protect their own. I call it a freemasonry. They look after their own and really they protect themselves from outsiders."

Ministerial accountability
"The doctrine of ministerial accountability no longer works. If you want to maintain the impartiality of the civil service you do it by opening up that service to greater public accountability, to parliament and the tax payer. I have no idea to this day the culpability between civil servants and ministers for Universal Credit or the aircraft carriers or FiReControl. I’ve no idea because it is all secret.

"Something I want to take forward from the book is to do some serious studies about how we might build a different accountability system. I’m absolutely convinced it’s broken. You’re beginning to see it fray at the edges. Charles Clarke had to fall on his sword over something that was nothing to do with him; Theresa May, on the other hand, was able to shift responsibility over checks on the borders to the civil servant – who was then absolutely furious that he had no way of defending himself.

"People say that changing the system would make it more difficult to have frank policy discussions in private, but I don’t see what is so horribly wrong with opening up the policymaking debate to greater public account. If we were to do that, we might get better, more sustainable, less wasteful policies. In local government they do it and the world hasn’t fallen in, you still get political differences and different value systems informing the administration."

'Yes, Minister' moments
"When I was minister for children, Cafcass [the Children and Family Courts Advisory and Support Service] had recently been created from a whole range of separate entities. It was pretty dysfunctional, both at the board and the executive level. I had a call with Charlie Falconer – the-then Lord Chancellor who shared responsibility for Cafcass.

"The civil servant who was supporting me couldn’t be present for the phone call so she wrote this note to my private office, where she basically said: 'Tell Margaret what to say, and if she doesn’t know what to say she can always say ‘mmm’, ‘ahh’, a pause is also appropriate'. If I was ever made to think I’m a puppet on a string being controlled by the civil service, that was a good time."
Select committee powers and staffing
"I don’t want us to become overly legalistic. I’m opposed to the idea that there should be legal support to witnesses. You would never have got Mike Ashley saying he was paying below minimum wage if you’d had lawyers in the room.

"I also don’t think committees should be over-staffed. In the States our equivalent has many more staff, and carries out much more partisan interrogations. In a way, the fact that we had to work hand to mouth with such limited resources created much more dependence on each other as committee members. But I do think we should have better access to papers – our fight with the prime minister [David Cameron] over access to the papers on how he took the decision for the aircraft carrier was not acceptable."

Seeking legal advice
"Our really big row was over access to the negotiations over tax settlements. When we tried to challenge that, the NAO went off and got legal opinion, funded by the taxpayer. HMRC went off and got legal opinion, funded by the taxpayer.

"I asked the House authority to get a legal opinion, because there are two accountabilities here – one they have to help parliament and they have to protect confidentiality. Why should one transcend the other, was there a way of marrying the two? I was told there was no money for it."
"I’m a great believer in devolution, and I hope Theresa May keeps the programme that George Osborne had started with Manchester. If you look at Germany, their regional structure is hugely powerful and not just as a driver of the economy – culturally it’s powerful, in terms of identity it’s powerful."
"I still think you can change the world by being in government, which is why I’m fighting for the Labour Party to be serious about winning elections. But the power of Google in influencing our lives is immense. One of the things I learnt from watching the government is how they hold Google in awe – they are scared of Google. The power of those big organisations in impacting our lives is beyond government."

"To be fair to Gus O’Donnell, who is not my favourite cabinet secretary, he did put a lot of women into perm sec posts"

Engaging with voters – Hodge famously fought off a challenge from the BNP in the 2010 election
"The challenge of getting people to reconnect with political parties is even bigger now than it was in 2009-10.

"The first thing we’ve got to do is be honest about what we can deliver, and we can’t. The whole of the referendum campaign was so full of dishonesty and lies. It was just outrageous. This idea that you can con the public is wrong.

"We also have to get out of this Westminster bubble. We talk theoretically about listening, but not many of us do it in the way we work in our constituency. When you listen to people you find their politics don’t start from a concern about Trident, it starts from what impacts on their immediate community. That isn’t just dustbins and road schemes. It can be national issues which impact on their community, such as immigration and housing.

"That was an important lesson for me which I took to PAC – always think about what your constituents will be thinking about, and if you can respond to the issues that they care about locally it builds trust."
Diversity in the civil service
"To be fair to Gus O’Donnell, who is not my favourite cabinet secretary, he did put a lot of women into perm sec posts, and too many of them failed. That actually was bad, in a sense, for progress. On class diversity, they’re better than they were in that they take more people from the Russell group universities, not just Oxbridge. But when it gets to perm sec level, most went to Oxbridge – and they appoint in their own image.

"The perm sec I admire the most is Jon Thompson. [Thompson worked for 20 years in local government before joining the civil service; he did not attend university]. He was a do-er, he was honest, he was straight, he was tough, and he was determined to deliver."
The importance of select committees
"People come in and think they will be prime minister, but there ought to be another career trajectory for MPs, through the positions you hold in parliament, working on select committees and so forth.

"I had chaired a committee when I first joined parliament so I learnt a bit from that, but it’s the breadth of the PAC that meant I learnt so much while chairing it. The committees also build cross-party working and I wish there was more of that. I mean, I’m tribally loyal to Labour, but the cheap tribal way we conduct politics belongs to the last century not to the present.

"Women are better for politics, and politics is better for having more women"

Women in politics
"Women are better for politics, and politics is better for having more women. In the select committee arena women are much better at building consensus, even when a lot of our criticisms were pretty tough. Every now and then the rest of the committee would get absolutely furious with me. I’d let them shout at me and then say 'I’m sorry'. Now, how many men would be prepared to say 'I’m sorry'?"

Her advice to Meg Hiller, who succeeded her as PAC chair
"We talked, but I didn’t want to inhibit her, and I’m very conscious you have to move on. I gave her a bit of advice around how to think about her reports. I said: always remember that you’re never going to be able to tell everybody everything that’s in a report, so just pick out the three main points, always think in threes."

Researching her book
"I’d never watched myself, but when I was writing the book I was obviously constantly looking things up to make sure I’d got it right. At one point I was researching our Google investigation and I came across YouTube footage of our Amazon and Google hearing. I watched it, and it was quite funny."
Changes to the way PAC worked
"I was anxious that we should have a real impact. Twice a year we brought officials back to ask them about recommendations we had made. That was a way of trying to ensure they had implemented them. It was also important that we made officials come back and give evidence even after they left post. I think making Helen Ghosh come back on a Defra issue after she had moved to the Home Office was helpful – that became the precedent."
Her claims that officials wanted to shut down PAC
"They thought that they could bully me into changing the way I behaved by threatening to shut me down. So I immediately shared that with all members of the committee and the previous chair and I got myself protection. Actually the public started liking what we were doing as well, when we started doing work that they thought was in their interest. That’s part of the culture you’ve got to change – someone’s overly critical? Oh, shut them down, put them back in their box."
PAC’s adversarial reputation
"It needn’t be adversarial. I remember a hearing after the West Coast Mainline failure, when Philip Rutnam came and just said: 'It was a mess.' In a way it was easy for him to say because he was a new perm sec, but we then engaged in a very constructive debate about what had gone wrong. It needn’t be adversarial – it depends on how defensive or secretive or obfuscating the witness is."

Margaret Hodge’s book, Called to Account: How Corporate Bad Behaviour and Government Waste Combine to Cost us Millions, is published by Little Brown


About the author

Suzannah Brecknell is CSW's senior reporter. She tweets as @SuzannahCSW

Share this page

Further reading in our policy hubs

Add new comment


Anonymous (not verified)

Submitted on 13 October, 2016 - 14:20
The reason that civil servants "hated" you was simply because you were often very rude to them and openly told officials that you 'did not care' how much something cost. If you liked a particular colour for something - a campaign or a brochure - you always insisted on it being changed, even when research with the target audience showed the actual users preferred other colours. THAT was wasting taxpayer money. At DWP (then DSS), they nicknamed you the "Poison Dwarf". I saw little to dissuade me from that title.

Lewis (not verified)

Submitted on 14 October, 2016 - 17:17
The prejudice against freemasons is misplaced. This is a pity because the virtues that freemasonry strengthens are praised elsewhere in the interview.

Anonymous (not verified)

Submitted on 9 November, 2016 - 21:38
I personally loved Margaret Hodge, she had the strength and position to say the awkward things that needed to be said. She was (and still is) an excellent role model. Didn't realise she had a book out, I'll be picking it up.

Contact the author

The contact details for the Civil Service World editorial team are available on our About Us page.

Related Articles

Related Sponsored Articles