We spoke to Penny during a break in the filming of her new project, The Margate Exodus, a contemporary retelling of The Book of Exodus. Many of the cast are non-actors from the Margate area, themselves very involved in the film's themes of migration and asylum. The highlight of the shoot was a daylong festival in Margate culminating in the burning of a massive sculpture in an abandonned theme park.

WHAT'S THE IDEA BEHIND THE MARGATE EXODUS

The main idea that interests me is that of people being in exile in their own country - the feeling of not belonging, of being surplus to requirements, unwanted. And it's about the way we exile others by refusing to recognize their humanity. So who are the Jews and what is the Promised Land? My best guess is that the Promised Land is when we choose to love rather than demonise each other. It's not that hard.

WHY MARGATE SPECIFICALLY?

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WHY WAS IT IMPORTANT FOR YOU TO INVOLVE THE LOCAL COMMUNITY?

As opposed to filming entirely with 'professionals'? It kind of never occurs to me to do things any other way. It bores me to just 'land' in a place like Margate and do it. Today we were shooting a battle on the beach and the faces I saw were not the faces you buy from an extras agency and that gives me a huge thrill. Those faces are wonderful. Also I love the process of making a film, the adventure of it. When the 'unwanted' Dreamers were herded into Dreamland for example there were some hoodie boys and a Muslim man. The man recognized the boys who had hurled objects and abuse at him a day earlier. They had a big chat in the queue before we started filming and the boys apologised and said "next time we see you we'll say hello". And today I saw them hanging out and laughing with a couple of young black men, sharing a brolly in the rain. I love that! So behind the scenes interests me and the energy you see on the screen is very different too.

DO YOU ACTIVELY CREATE A FUSION OF FACT AND FICTION? OR DO YOU NOT REALLY THINK ABOUT IT THAT WAY?

I go totally serial killer when people accuse me of this! I am making fiction. Every frame is fiction. What you see (from actors and non actors) are performances.

BUT IT FEELS LIKE A DOC. USE OF 'REAL' PEOPLE, THE PROMINENT ROLE OF LOCATION, 'REAL' SUBJECT MATTER

Yes, a huge amount of graft goes into making it look 'real'. I want to rampage around with a hammer with this fusion BS. It's story telling. If some moron wants to join the Pharoah's party when Bernard Hill, actor in Titanic and Lord of the Rings, etc, makes a speech filmed by four movie cameras and a video camera then…well, maybe it's a f**king good speech and Bernard is a f**king good actor but it's not documentary!

YOU SEEM TO REALLY ENJOY THE 'MADNESS' OF YOUR KIND OF IMPROVISED FILMMAKING?

Yes, it's pretty organised too, but too much control bores me after a while. I need some chaos, although the live event bit of the Margate shoot (one day out of 7 weeks, remember) was not an experience I'd want to repeat in a hurry. Although, when I announced this to Lucy my assistant, she snorted "Next time you'll do something even crazier". Dunno. I think I'd like to work in Tescos or make a romantic comedy

ARE YOU INTERESTED IN THE POINT WHERE FILM JUMPS OUT OF THE TELLY AND INFLUENCES PEOPLES' LIVES?

I don't think I can answer this question. I mean I just do what interests me. I don't have a mission.

YOU'VE MADE SUCH A DIVERSE RANGE OF FILMS. WHAT DO YOU THINK UNITES THEM, IF ANYTHING?

People on the margins. Looking carefully at what seems familiar and breaking it up. Looking at what seems frightening and exotic and making sense of it.

WILL YOU DO A 'STRAIGHT' OBSERVATIONAL DOCUMENTARY LIKE THE WET HOUSE AGAIN?

Yes

WHAT'S THE FINANCIAL AND CREATIVE ATMOSPHERE NOW FOR FILMS TRANSCENDING GENRE BOUNDAIRES LIKE YOURS?

I don't know. There are people who have power to commission things who are prepared to take risks but you always have to fight for it. Always. You have to create the space to work in. You jettison the sensible, sensitive side of yourself that worries about what other people think and get into a kind of insane state where all you care about is the story you want to tell.

There's a real ruthlessness about it. And you're there for the ride and the destination. At the moment I am having battles with my ADs about the fact that I have lots of old boozers and junkies and naughty boys who smoke weed on set. Not professional apparently. But I love them and they are great in the film and I won't have Dreamland inhabited by f**king stuntmen or middle class extras happy to play sudoku and be meekly crap.

And then when the film is done - for me anyway - the bit of me which can cave in to other peoples' criticisms comes flooding back and I worry a lot about what other people think. And bad reviews distress me.

At the moment I think anybody who disagrees with me is a moron. Not nice really but true. Like being a two year old. But since Mischief Night is about to come out and is getting lots of great press and a couple of mixed/bad ones, I totally focus on the bad ones and they come and say hello in the dark hours of the night.

WHAT ADVICE WOULD YOU GIVE THE NEXT PENNY WOOLCOCK?

Walk towards the sound of gunfire. Have fun.

But why would anyone want to be the next anyone? And don't listen to my crap advice anyway. You'll get shot in the head.

But you can't buckle. I think that's the real and only difference between jobbing filmmakers and people with individual voices. There is always pressure to compromise and change things, always sensible voices saying you can't do things. And they're probably right but you can't listen to them if you know they're not right. Because if you do you end up with things that are all right. And if you don't it's much more dangerous but you have a chance of something else.