Annex 2: DECC's briefing to the Committee
Pre-Scrutiny appointment hearing with preferred
candidate for Chair of the Gas and Electricity Markets: David
Gray
In Stephen Lovegrove's letter of 19 July, he undertook
to provide the Committee with briefing material on David Gray,
the preferred candidate for the next Chair of the Gas and Electricity
Markets Authority (GEMA) prior to the pre-appointment scrutiny
hearing with him which I understand has been scheduled for 10
September.
As you no doubt will be aware, Lord Mogg's current
appointment as GEMA Chair will end on 30 September and my department
has undertaken an open competition to identify and appoint his
successor. The appointment process has followed the Office of
the Commissioner for Public Appointments' (OCPA) guidelines.
DECC representation on the selection panel consisted
of Stephen Lovegrove, DECC's Permanent Secretary, and Simon Virley,
Director General for Energy Markets and Infrastructure Group.
The panel's independent members were Anna Walker from the Office
of the Rail Regulator, and the OCPA chair, who oversaw the process
and signed it off as being compliant with the OCPA code.
David Gray has a range of relevant knowledge and
experience in terms of regulation and familiarity with the energy
sector which makes him well-qualified to take on the role of GEMA
Chair. In particular, he previously worked at Ofgem as Managing
Director Networks, is a current Non-Executive board member of
the Civil Aviation Authority and has undertaken recent reviews
in the water sector. Prior to joining Ofgem he was involved in
advising on investment in the energy and utilities sector and
energy privatisation. I attach his original application letter
together with his CV.
A key part of this exercise has been to identify
and guard against any potential conflicts of interest. As you
will see from the attached briefing pack, this issue was specifically
flagged up and candidates were asked to declare all actual or
potential conflicts of interest and explain how these would be
managed in order to be able to perform the Chair role in a way
which would satisfy the Seven Principles of Public Life. One of
the reasons for our using recruitment consultants for this exercise
was their ability to identify potential conflicts early on in
the process. The consultants we contracted with investigated this
carefully and their longlist reports on candidates flagged these
up for the selection panel which was then able to consider these
during its meetings and the subsequent interviews.
In the case of David Gray, his CV mentions a number
of current activities which the department has considered and
discussed with him. He will remain a Non-Executive Member of the
Civil Aviation Authority. We do not consider that this role represents
a conflict with that of GEMA Chair and think it would be a useful
complement for him to remain involved in another of the regulated
sectors.
We have also looked carefully at his role as Chair
of Pitkin Petroleum. This is an oil exploration company which
operates in South East Asia and South America and does not
operate within the EU. Ofgem does not regulate oil exploration
so we do not consider that there is currently any conflict of
interest. Mr Gray is well aware that should there be any change
in Pitkin's activities, particularly if it became involved in
activities within the EU that are regulated by Ofgem, the position
may need to be reviewed and that it could become necessary for
him to step down from his Chair role at Pitkin if there was any
prospect of a real or perceived conflict that could undermine
his role as GEMA Chair.
Of the other matters mentioned in Mr Gray's CV, he
has already stepped down from his non-executive directorship at
Halite and membership of the Regulatory Policy Institute. He will
remain a Member of the Board of Governors of the Central School
of Ballet but this does not represent a conflict with the GEMA
role.
I hope this is helpful. I am sending copies of this
letter to David Gray and Sue Gray (Director of Propriety and Ethics,
Cabinet Office)
Yours sincerely,
Rachel Crisp
(Head of Energy Markets and Consumers)
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