Sir Gus O'Donnell: 'People make better policy advisers if they have been on the front line'

Woody Allen's film Zelig is about a chameleon-like character who pops up in the television footage of key moments in history. Sir Gus O'Donnell, the Cabinet Secretary and head of the Civil Service, is the Government's Zelig.

You may have seen him on the TV clips of Black Wednesday in 1992, telling a humiliated Chancellor Norman Lamont on which spot to stand as he announced to the cameras that Britain was pulling out of the European exchange rate mechanism.

The ex-Treasury economist was Downing Street press secretary at that tumultuous moment, having moved from the Treasury with John Major when he succeeded Margaret Thatcher in 1990. His apparently effortless rise up the Whitehall ladder continued when he returned to the Treasury four years later. Unlike several senior officials who served the Tories, he prospered under Labour, and Gordon Brown made him the Treasury's permanent secretary. It was no surprise that he was chosen for the £220,000-a-year post heading the Civil Service this summer.

Sir Gus occupies an oak-panelled office overlooking Horseguards Parade, on which Sir Humphrey Appleby's office in Yes, Minister was modelled. Yet he is the very antithesis of Sir Humphrey. From a lower middle-class family in south London, he was educated at state schools before studying economics at Warwick University. His childhood ambition was to be a professional footballer. The Manchester United fan never dreamt he would climb to the top of the Whitehall league.

He is the perfect example of the meritocracy he would like to instil throughout the Civil Service. He is keen to ensure diversity by recruiting more women, people from ethnic minorities and the disabled. "We have got to reflect the society we serve, getting the best people - wherever they come from," he says in his classless accent.

Sir Gus is regarded by fellow officials - and ministers--as "a breath of fresh air" as he tries to blow away the traditional stuffiness of the Civil Service. A quiet revolution is sweeping Whitehall: in his first four months, Sir Gus has appointed 10 new permanent secretaries and is ending the system of Buggins' turn. Last Friday, David Bell, the chief inspector of schools and a former headteacher - never a traditional civil servant - was made permanent secretary at the Department for Education and Skills.

The musical chairs among the "perm secs" has created "a once-in-a-lifetime opportunity" to remould Whitehall, says Sir Gus. A fit-looking 53, he has seven years - longer than his recent predecessors - to change the way the Civil Service works. He wants to improve the delivery of public services by bringing in outsiders, particularly from the private sector, and ensuring a more fluid career structure. "People are better policy advisers if they have spent time on the front line, running something," he says.

After eight and a half years in power, Tony Blair is frustrated that it takes so long to implement ministerial decisions, and is clearly looking to Sir Gus to sharpen up Whitehall's act. Sir Gus wants the Civil Service"do things quicker, move on reform, find out what the obstacles are." He adds:"We have to apply to ourselves the disciplines we impose on others." All departments will undergo "capability reviews" to test whether they are flexible enough and have the right skills.

His mantra is the three "Ps" - pride, pace and passion. He says officials can take pride in and be passionate about their work without being party political, since many objectives - like tackling climate change or child poverty - enjoy a cross-party consensus.

Sir Gus spends every Wednesday in an open-plan office at 22 Whitehall, to ensure he does not become a remote figure in his office at No 70, near to a secure connecting door to 10 Downing Street. On Fridays, he tries to get out of London to visit civil servants working on the front line. "People have an image of the civil service as Whitehall. But 75 per cent of civil servants work outside Whitehall," he says.

The real-life Sir Humphreys, the permanent secretaries who head each government department, used to meet at 10am every Wednesday in the grand Treasury board room next to the Cabinet Secretary's office. In a symbolic move, Sir Gus has switched the meeting to a modern conference room at 22 Whitehall. An inner group of six to eight members will drive though his reforms, ensuring that departments work closely together on issues that range across their briefs. The weekly meeting is no longer a mutual back-slapping session. Nowadays it discusses big themes such as terrorism and globalisation.

Sir Gus, liked and trusted by colleagues and politicians of all hues, is well placed to help restore trust in government.

"I have a very straightforward view about trust. It is like the advert: we should do what it says on the tin. If we say we are going to deliver public services to certain standards, we have got to make sure that we do so," he says.

One of his tasks is to ensure that civil servants and ministers stick to the rules. He played a key role in David Blunkett's second resignation from the Cabinet over the jobs he took up when he was outside the Government (his predecessor, Lord Turnbull of Enfield, was slow to become involved in the David Kelly affair).

Sir Gus believes politicians and civil servants should say sorry more often."I believe in forgiveness. If people say, 'look, I made a mistake, I'm sorry,' I think that should be treated very positively. None of us is perfect. We all have things we are good at and bad at."

There are calls for an independent panel to oversee the code for ministers, an idea Mr Blair opposes. Sir Gus seems more open to it, but will not commit himself until the Commons Public Administration Select Committee has completed its look at the system.

The whispers in Whitehall suggest he is more prepared to stand up to Mr Blair than recent Cabinet secretaries. Can he really give independent advice to his political master? "Establishing a strong relationship with the Prime Minister is absolutely vital in this job," he says, choosing his words diplomatically. "You are also there to make sure that different views around the cabinet table are listened to," he says.

So has Mr Blair really changed his informal "sofa" style of government? Some ministers think not, but Sir Gus says: "The cabinet committee structure works well. I don't think there are any worries about that now."

He is updating the code of conduct for officials. He sounds keener than Mr Blair on a Civil Service Act to make the code statutory and lay down the differing roles of impartial officials and political advisers. If the Government continues to shelve such legislation, Sir Gus he will try to incorporate parts of the proposed Act in the Whitehall code.

He is in no doubt that Sir Christopher Meyer, the former British ambassador in Washington, breached the spirit of the rules by publishing his memoirs, DC Confidential, which included unflattering remarks about ministers. Because the book did not disclose any state secrets, it was cleared by the Cabinet Office. Now Sir Gus is determined to tighten the rules. "I was disappointed. I very much hope that others will not follow in the same way," he says.

Having worked closely with Mr Brown at the Treasury, Sir Gus could not be better placed for another of his many roles - managing the handover of power when Mr Blair stands down. With Mr Brown the overwhelming favourite to succeed him, Sir Gus says neutrally: "My job is to make sure the Government and Cabinet operates smoothly, so I will do that."

Of course, he might one day have to manage a transition from Mr Brown to Mr Cameron, with whom he also worked at the Treasury - and who is standing in the background as a young political adviser in those pictures of Black Wednesday. What did Sir Gus make of Mr Cameron? "He was a very promising special adviser. I don't think that he would have thought then he would be where he is now, to be honest. He certainly had plenty of potential."

Could he serve Prime Minister Cameron too? "As Cabinet Secretary, I work for the Prime Minister, whoever it is."

Does he ever worry about crossing the line between government and party politics? He says his present role is easier in that regard than his previous ones as press secretary at No 10 and the Treasury. "It is what the Civil Service does best. You have to be able to give informal, objective advice. I think people underestimate politicians if they think they don't value that. If they want 'yes men', there are plenty of those around. I think they actually want to be told because it is in their interests.

"I have always been straight with people and try to develop a personal relationship, which means you can tell them what you really think."

The CV

* Born: 1 October, 1952

* Education: State schools; Warwick University (BA Hons); Nuffield College, Oxford (MPhil)

* Career: Lecturer, Glasgow University (1974-79); Economist, Treasury (1979-85); First secretary (economy), British embassy in Washington (1985-88); Press secretary, Treasury (1989-90); Press secretary to Prime Minister John Major (1990-94); Under-secretary, Treasury (1994-95); Deputy director of the macroeconomics policy directorate, Treasury (1995-96); UK executive director, International Monetary Fund and World Bank (1997-98); Head of macroecomics policy, Treasury (1998-2002); Permanent secretary, Treasury (2002-2005); Cabinet Secretary and head of the home Civil Service from August 2005

* Family: Married with 15-year-old daughter

* Hobbies: Football, cricket, golf, tennis