Tory council left effectively bankrupt after investing £655m in solar farm tycoon who used taxpayer cash to buy £12m private jet, £16m yacht and £2m Bugatti Chiron supercar instead
- Solar farm tycoon Liam Kavanagh used Thurrock Council’s money for luxury life
- Council effectively bankrupted after investing £655m in his solar farm business
A Conservative council has been left effectively bankrupt after investing more than half a billion pounds in a solar farm tycoon who used taxpayer cash to buy luxury goods including a yacht and a private jet.
Cash-strapped Thurrock Council in Essex borrowed £655million of public money to invest in Liam Kavanagh’s solar farm business.
But leaked documents reveal how the fast-living financier used the council’s funds to go on a spending spree and live a luxury lifestyle. Mr Kavanagh’s lawyers claim that all the payments made were allowed and approved by his company’s finance team and auditor.
Thurrock hoped the huge investment in 53 solar farms would generate millions in extra income. The investments were issued through a complex series of bonds and in return, Thurrock would get interest payments worth millions of pounds.
But the interest payments stopped after Mr Kavanagh wound up his companies and the estimated value of the farms is lower than expected, with the council facing a £200million shortfall on the risky investment.
Cash-strapped Thurrock Council in Essex borrowed £655million of public money to invest in Liam Kavanagh’s (pictured) solar farm business
Thurrock hoped the huge investment in 53 solar farms (one pictured in Swindon) would generate millions in extra income
The BBC’s Panorama and The Bureau of Investigative Journalism found that the value of Rockfire’s farms was inflated to entice further investment. Gavin Cunningham, a former investigator with the Serious Fraud Office, told Panorama that it is potentially fraudulent to supply inaccurate energy prices.
Mr Cunningham said: ‘The effect of that will be that you end up with a far greater valuation of the overall portfolio of solar farms than is actually the case. And anyone relying on that information is going to be misled by it.’
The probe found that when Rockfire had one of its solar farm portfolios revalued in 2018, it declared that the power price was £61.45 MWh despite the average price at the time being much lower at £46.92Mwh.
The investigation also uncovered that Mr Kavanagh was told by staff in 2020 the average power price was expected to be £41.70MWh but he insisted valuers should be given the inflated price of £62/MWh.
By 2018, Thurrock had already invested more than half a billion pounds in the business. The inflated power prices convinced the council to invest another £130m – which never reached the solar farm.
Leaked Rockfire documents reveal how Mr Kavanagh spent the council’s money on his lavish lifestyle inside. There is a £12million payment which went to a company that bought his private jet.
Meanwhile, there are also payments of £2million for his Bugatti Chiron car and £16million for his yacht Heureka. Another staggering £40million went to a bank account called ‘other’.
He also bought a million-dollar diamond-encrusted Hublot watch which cost twice as much as the average home in Grays – the Essex town where Thurrock Council is based.
Leaked documents reveal how the fast-living financier (pictured) used the money to go on a spending spree and live a luxury lifestyle
An email the financier sent in 2020 appears to show he always planned to spend the council’s investment on himself.
‘These funds… will be used to create a new family investment office and to create wealth for years to come. This has always been my plan,’ it read.
Thurrock is one of several councils that have faced financial turmoil since local authorities were handed more freedom to raise funds and invest in 2011 by the coalition government.
Croydon, Slough and Woking have all had to halt all non-essential spending after also losing public funds on risky investments.
A spending watchdog called The Audit Commission – which stopped councils taking too many risks – was abolished in 2015. But Thurrock Council began investing in Mr Kavanagh’s business Rockfire in 2016.
Mr Kavanagh, who no longer lives in the UK, said his company had produced significant income for the council for several years.
He said: ‘I have never misled Thurrock Council during the course of those investments. It was always my understanding that Thurrock Council conducted its own independent due diligence into investments.’
A report by Essex County Council last month blasted Thurrock for its risky investments and inadequate checks. It also brought up the role played by Sean Clark – the council’s then chief financial officer.
Mr Clark also invested council cash in other companies which went bust.
The new council leader, Andrew Jeffries, apologised for ‘the shocking and unacceptable failures’ of the past and pledged to recover the financial position to protect residents – although Thurrock was granted permission to increase council tax by 10 per cent by declaring bankruptcy earlier this year, sparking mass fury.
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