Introduction
On the seventh day of the parliamentary debate on the former Principal Auditor’s 2018/2019 Report, the Chief Minister continued to expose serious flaws in the Auditor’s work, focusing on the section concerning a single Gibraltar Development Corporation (GDC) officer. He described this as one of the most concerning examples of the Report’s bias and lack of procedural fairness. The Chief Minister explained that the Auditor’s treatment of this case was unprecedented, unfairly focused on one public servant, and extended far beyond the Auditor’s constitutional powers. The Government’s position was that this part of the Report was ultra vires, discriminatory, and unconstitutional, and should therefore be withdrawn in full.

Settlement of the GDC Officer’s Claim
The Chief Minister began by recalling that ex-gratia payments are a lawful and responsible means of protecting the public purse. They are designed to avoid the higher costs and risks of litigation, often resulting in significant savings for the taxpayer. In this case, he noted that the £260,000 settlement reached with the GDC officer was prudent and well supported by legal advice.

He explained that the officer’s legal claim arose after serious allegations were made against her, which led to an investigation marked by procedural irregularities and prolonged stress. Legal advice to the Government indicated that the officer’s claim for damages had a high likelihood of success if taken to trial. Having reviewed the evidence and received input from all relevant officials, the Government determined that settlement represented the most cost-effective and proportionate course of action.

The Auditor criticised the payment whilst his own report conceded that there was only “a chance” (not a “high chance” or “likelihood”) that the officer’s claim might not have been rejected if it had gone to court. In other words, even by the Auditor’s analysis, the claim carried a material risk of success against the Government. The Government’s legal advice was even clearer, indicating that the likelihood of success was high. Faced with that risk, settlement was the most prudent and economical course of action.

Had the claim proceeded to trial, potential damages could have exceeded £500,000, with legal costs approaching £100,000. The settlement therefore achieved a saving of roughly 50 per cent, consistent with the Government’s duty to act in the taxpayer’s best interests.

Errors in the Auditor’s Analysis
The Chief Minister dismantled several key assertions in the Report. He explained that the Auditor misunderstood how claims for loss of earnings, allowances, and pension contributions operate in employment law. While suspended officers do not receive overtime or allowances, those wrongfully suspended can claim them retrospectively once the suspension is found to be improper.

Similarly, the Auditor incorrectly stated that the officer could not claim pension contributions, overlooking that GDC officers are entitled to start contributions at any time, with the Government matching them. The Chief Minister made clear that the Auditor’s legal analysis was incorrect.

He also criticised the Report for ignoring unquantified heads of damage such as future earnings and care costs, which significantly increased the Government’s potential exposure. When those were included, the claim’s realistic value exceeded half a million pounds. By focusing narrowly on quantified damages, the Auditor’s analysis misrepresented both the risk and the rationale for settlement.

The Principal Auditor’s Letter
The Chief Minister expressed grave concern about the Principal Auditor’s conduct in the final days before publication of the Report. He revealed that the Auditor had sent a 23-page letter with three annexes to the GDC Secretary on 22 May 2025—just six working days before the Report’s completion. Similar letters were sent to other departments at the same time, and the Chief Minister noted that large sections of those letters were reproduced word-for-word in the final Report.

He described this as a deeply improper practice that breached fairness and transparency. The timing and structure of the correspondence made it impossible for the Government to provide meaningful responses before publication, suggesting that the Report had already been written.

The Chief Minister stated that such behaviour fell far short of professional auditing standards. It denied the Government and public servants the opportunity to respond to serious allegations and reinforced the impression of bias and pre-determination that had characterised the entire Report.

The Auditor’s Review of Political Activity
The Chief Minister then turned to the section of the Report that examined the GDC officer’s alleged political involvement. He stated that this was wholly outside the Auditor’s constitutional and statutory remit. The Gibraltar Constitution restricts the Principal Auditor’s jurisdiction to the “public accounts of Gibraltar” and related financial matters. There is no authority in the Public Finance (Control and Audit) Act permitting the Auditor to investigate the political activity of civil servants.

He noted that if such a review were permitted, it would have to apply equally to all public officers, not just one. To single out a single individual, and one associated with the GSLP, while ignoring others, amounted to discriminatory and politically motivated treatment. The Chief Minister said this part of the Report was not only ultra vires but unconstitutional, as it infringed the officer’s rights under section 12 of the Gibraltar Constitution and Article 11 of the European Convention on Human Rights, which protect freedom of association.

He further cited the Equal Opportunities Act, which prohibits discrimination on the basis of political belief, and noted that European and UK case law had recognised democratic socialism as a protected belief. The Auditor’s decision to highlight only one officer’s political activity therefore constituted direct political discrimination.

Defence of Constitutional Rights
The Chief Minister explained that his defence of the officer was not about party allegiance but about the rule of law. Every citizen, regardless of political affiliation, is entitled to equal protection under the Constitution. He warned that allowing a public authority to exceed its powers and target individuals for their political views would erode fundamental freedoms.

He criticised the national broadcaster for publishing the officer’s name and repeating the Auditor’s narrative uncritically, noting that the officer’s political activity had been approved in 2011 and remained lawful. The only alleged issue related to a temporary promotion, which did not invalidate her prior authorisation.

The Chief Minister concluded that the Report’s treatment of this officer represented an abuse of process, a breach of constitutional rights, and a violation of professional and ethical standards.

Conclusion
The Government’s position was clear: this section of the former Principal Auditor’s Report was ultra vires, unconstitutional, and discriminatory. It was based on flawed legal reasoning, selective analysis, and improper procedure. By targeting a single public servant for political scrutiny, the Auditor undermined both his own impartiality and the integrity of the audit process.

The Chief Minister confirmed that the Government would propose an amendment to the motion rejecting this part of the Report in its entirety, on the grounds that it was beyond the Auditor’s lawful powers and contrary to Gibraltar’s constitutional and democratic principles.

ENDS