Garcia says audit row is ‘a sign of a functioning democracy’ 

The Deputy Chief Minister, Dr Joseph Garcia, has defended the Government’s response to the Principal Auditor’s 2018/19 report, arguing in Parliament that the intense exchanges it has prompted is “a sign of a functioning democracy” rather than a threat to Gibraltar’s Constitution.  

Speaking during the debate on the Government motion on the audit report, Dr Garcia said it was “perfectly legitimate and appropriate” for ministers to set out their position in the House, given that the report had been formally laid in Parliament by one of its officers. 

He rejected suggestions that the motion was unconstitutional, describing it instead as “an integral part of a parliamentary and constitutional oversight” process. 

“Faced with such a report, what else was the Government expected to do? Where else would it have been appropriate to put across our side of the argument?” Dr Garcia said. 

“We have heard a full explanation of the Chief Minister in this House. A reasoned argument has been provided as to why some parts of the report are acceptable and why other parts are not so.” 

“Given that the author of the report was an officer of this House, that it has been laid in this House, it is perfectly legitimate and appropriate for the Government to respond to it through a motion in this chamber.” 

“That is our policy. They are free to agree to disagree or to advocate something different.” 

Dr Garcia said it was normal in many democracies for governments and audit institutions to disagree over methodology and conclusions, citing examples from the United Kingdom, Australia and the European Union where reports had sparked political controversy without being framed as constitutional crises. 

“In many cases, audits have been subjected to the cut and thrust of political debates,” Dr Garcia said.  

“I've not seen a suggestion anywhere that such robust criticism constituted an assault on the constitutions of the UK or of Australia.” 

“Indeed, when the UK Government has strongly defended its policies and actions against a critical NAO [National Audit Office] report, this is seen as part of the accountability process.” 

Dr Garcia said the most contested sections of the 2018/19 report were value for money audits and noted that, as the auditor himself had acknowledged, there was “no… legal power or authority” to carry out that work, which successive governments had nonetheless permitted and facilitated since 1992. 

“The principle of scrutiny and transparency is indeed very important,” he said.  

“And it is also universal, and it cuts both ways.” 

Dr Garcia accepted there was “room for improvement” and said the Government was acting on many of the report’s findings, including areas already being addressed before publication.  

On the report’s criticism that the Government had not provided timely responses, he said past auditors had “for decades” highlighted delays in receiving Government replies albeit “in different language”, citing examples from numerous past reports while the GSD was in office going back to 1999. 

“This question has been blown up out of all proportion in relation to the 2018/19 report,” Dr Garcia said. 

“The House has heard from the Chief Minister of departments which were simply not given enough time to reply.” 

“So there are explanations today, and maybe there were explanations in their time.” 

“The difference lies in the approach which has been adopted on this occasion.” 

Dr Garcia accused the Opposition of adopting a “negative and destructive” narrative and said the GSD’s language risked eroding trust in Gibraltar’s institutions, citing too media coverage and social media amplification. 

“It appears to me that they have been quick to point the finger and stand in judgment even before the other side of the argument was made known,” he told Parliament. 

“They could have pursued the same issue in a different way in a manner which was less bitter and less divisive.” 

“The Leader of the Opposition cautioned on the use of language.”  

“He would have done well to heed his own advice.” 

Dr Garcia said the GSD’s “polarising discourse” was “damaging the fabric of our community”.  

“So their words and their approach should indeed be more measured because their existing approach carries a risk and it comes at a cost,” he added. 

“The risk is that they continue to sow the seeds of discord and division deeper still and that this generates a climate and distrust in the organs and the institutions of this country.” 

“The cost is that this could in turn undermine the very basis of the system of government we have had in place since 1964.” 

“So in my view the threat to the Constitution lies not in this motion.”  

“This is a parliamentary response to a report tabled in this parliament, a matter of policy.” 

“The threat lies in the political drama which is being staged and played out at the same time.” 

“This controversy is only a very small part of that bigger picture.” 

Dr Garcia insisted the Government had already provided extensive explanations on the areas criticised by the Principal Auditor, pointing to a series of detailed statements issued in July covering issues including refuse collection reform, the waste management facility procurement, the EMIS contract, the Government’s wider public procurement record, the occupational health services contract, GHA audited accounts and overtime controls, the Gibraltar Savings Bank, housing allocation and measures to improve public service attendance at work. 

“So nobody can accuse the Government of not having provided information,” he said.  

“Explanations have been given. Information has been provided.” 

Much of Dr Garcia’s intervention focused on the Northern Defences project, for which he had ministerial responsibility and chaired the panel that assessed bids.  

He described a public process in which expressions of interest were invited on four occasions since 2013, with an eight-member expert panel including ministers and officials from planning, heritage, technical services and Land Property Services evaluating the submissions. 

“There were three proposals received, but only one proposal met the required conditions,” he said.  

“The successful concept is based on private sector investment. That means that the project could be funded by the developer and by tourists. It will not be funded by the taxpayer.” 

Dr Garcia said the selection process and outcome were “not in dispute” and that all documentation had been made available to the audit office.  

Instead, he argued, the report’s criticism rested on two narrow technical points, namely the lack of involvement of the procurement office, and the absence of a specific notice normally used in the UK system. 

Dr Garcia stressed this was an expression of interest rather than a traditional tender and that the award had been publicly announced by press release.  

Against that background, he said it was “disappointing” that the report had characterised the issue as an “irregularity”, warning that such language was “likely to give the wrong impression to anyone reading it”. 

“This is a project which has been ongoing for over a decade. In that time, the site has been transformed from a rat-infested rubbish dump, a jungle, into a heritage jewel,” Dr Garcia said. 

“This transformation was executed with unanimous support of the Development and Planning Commission and has drawn praise from the Gibraltar Heritage Trust.” 

“Nonetheless, it has been exposed to unfair criticism.” 

Dr Garcia also questioned parts of the report that challenged projections for tourism to the Northern Defences, arguing the auditor had crossed into matters of policy.  

He said the Government wanted to open the site to visitors, was confident it would generate income and understood from the Minister for Tourism that cruise lines were already keen to include the attraction in new tours.