Until her battle with British Gas over pipeline transmission charges, Clare Spottiswoode, director-general of Ofgas, would not have ranked as the most prominent or controversial regulator. But by taking on British Gas in such an aggressive, no-nonsense way, she has dispelled any notion that regulators should maintain a cosy relationship with the companies they oversee.
An unusual career path
If there is such a thing as a typical regulator, he or she has spent long years in the civil service or the academic world.
Spottiswoode's career, while it has included periods in the civil service and the academic world, would be more accurately described as juggling the demands of family and small businesses.
After being educated at Cheltenham Ladies' College, and Clare College, Cambridge, where she took a 2.1 in maths and economics, Spottiswoode (pronounced Spotswood), took a further degree in economics at Yale before joining the Treasury in 1977. She stayed there three years, then left to have children (she has four) and set up a gift business. She later sold this, then set up a firm which produced software packages for the financial and corporate sectors.
Courting controversy
She sold this business in 1988, remaining managing director and chairman until 1990.
Before being appointed to Ofgas in November 1993, Spottiswoode had been a member of the government's deregulation task force as well as a tutor at the London Business School. Since her appointment, she has created controversy, not only in her regulatory judgments but also by slapping in a demand for a hefty salary increase (she is currently paid £90,000 a year) and for taking up a post as a non-executive director of Bookers (the terms of her contract allow her two such outside appointments).
Hitting a balance
Although Spottiswoode is bolstered by the advice of Professor Michael Beesley and Eileen Marshall, who was recruited from Offer, the electricity regulatory office, and is one of her deputies, her approach appears more pragmatic than strict advocates of the Austrian school of utility regulation would favour.
'I am not convinced that a straightforward RPI-x without any error correction is necessarily the right balance of risk between consumers and the company,' she said recently, while adding that it was also important to ensure that the regulatory framework does not become too complex. This, the need to steer a tricky line between allowing the utilities commercial freedom while ensuring that they do not abuse it, sums up the regulators' dilemma. Spottiswoode may be relatively new to the game but she appears to be learning fast how best to play.
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