Man bought private jet with borrowed council money

A businessman cheated a assembly retired of tens of millions of pounds and went connected a spending spree with the cash, an probe has discovered.

Leaked documents uncover however Liam Kavanagh utilized Thurrock Council's wealth to bargain luxury goods, including a yacht and a backstage jet.

The assembly has been made efficaciously bankrupt aft investing £655m successful Mr Kavanagh's star workplace business.

Mr Kavanagh's lawyers accidental each the payments were permissible.

They accidental they were approved by his company's concern squad and auditor.

Thurrock is 1 of a fig of councils that person got into fiscal difficulties since the conjugation authorities gave section authorities much state to rise funds and put successful 2011.

Woking, Slough and Croydon person each been forced to halt each non-essential spending aft losing nationalist wealth connected risky investments.

The Audit Commission - a spending watchdog that stopped councils taking excessively galore risks - was abolished successful 2015.

Conservative-led Thurrock Council started investing currency with Mr Kavanagh's concern Rockfire the pursuing year.

The thought was that the assembly would get regular involvement payments from the profits and its currency would beryllium harmless due to the fact that it was secured against the worth of the star farms.

But the involvement payments stopped aft Mr Kavanagh coiled up his companies and the estimated worth of the star farms is little than the assembly thought.

Administrators are present selling the star farms and Thurrock is facing a £200m shortfall connected its investment.

The assembly has been forced to chopped services and enactment up assembly tax.

Vickki Jarmyn has tally a creation radical for radical with learning difficulties successful the country for the past 14 years. But her £7,000 assistance has been chopped and the radical is nether threat.

"It's conscionable an ongoing battle," she said. "How tin you conscionable instrumentality thing from radical that thrive successful that situation, that are harmless and comfortable? How tin you conscionable bash that?"

The probe - by BBC Panorama and The Bureau of Investigative Journalism - has revealed however the worth of Liam Kavanagh's star farms was inflated to transportation the assembly to put much cash.

Rockfire had 1 of its star workplace portfolios revalued successful 2018. The institution gave valuers a powerfulness terms of £61.45 per megawatt hr (MWh), but the mean powerfulness terms for the portfolio astatine the clip was £46.92/MWh.

In 2020, Mr Kavanagh was told by unit that the mean powerfulness terms was predicted to beryllium £41.70/MWh. But helium insisted the valuers should beryllium fixed an inflated terms of £62/MWh, which they seemed to accept.

Gavin Cunningham, a erstwhile researcher with the Serious Fraud Office, told Panorama that supplying inaccurate vigor prices was perchance fraudulent.

Mr Cunningham said: "The effect of that volition beryllium that you extremity up with a acold greater valuation of the wide portfolio of star farms than is really the case. And anyone relying connected that accusation is going to beryllium misled by it."

By 2018, Thurrock had already invested much than fractional a cardinal pounds successful Mr Kavanagh's business.

The inflated valuations convinced the assembly to put a further £130m - but the wealth ne'er reached the star farms.

Leaked documents from Rockfire uncover however Mr Kavanagh spent assembly wealth connected himself instead.

A ledger of payments shows £12m went to a institution that bought Liam Kavanagh's backstage jet.

There are besides payments totalling £2m for his Bugatti Chiron car and £16m for his yacht Heureka.

A further £40m disappears into a slope relationship labelled "other".

An email Mr Kavanagh sent successful 2020 suggests helium ever planned to walk assembly currency connected himself. It says: "These funds… volition beryllium utilized to make a caller household concern bureau and to make wealthiness for years to come. This has ever been my plan."

Mr Kavanagh is nary longer surviving successful the UK.

The Millionaire who Cheated a Council is on BBC iPlayer now and volition beryllium connected BBC One astatine 20:00 BST (22:40 BST successful Wales)

His lawyers said the transactions were each ineligible and that helium was entitled to walk the assembly wealth connected immoderate helium wanted.

They said determination were nary restrictions connected however the investments were to beryllium used, the star assets were not overvalued and the powerfulness prices submitted were honorable predictions.

Mr Kavanagh said Thurrock had approached him astir the investments and they had produced important income for the assembly implicit a fig of years.

He said: "I person ne'er misled Thurrock Council during the people of those investments. It was ever my knowing that Thurrock Council conducted its ain autarkic owed diligence into investments."

Last month, a study by Essex County Council criticised Thurrock for its risky concern decisions and nonaccomplishment to marque due checks. The study besides highlighted the relation played by the council's past main fiscal officer, Sean Clarke, successful its disastrous concern strategy.

As good arsenic the Rockfire investments, Mr Clark besides invested assembly currency successful different companies that went bust. Mr Clark did not respond to Panorama.

The caller assembly leader, Andrew Jeffries, apologised for the "the shocking and unacceptable failures" of the past.

He said the assembly was taking each due enactment to retrieve the council's fiscal presumption and to support susceptible residents and indispensable services.

The Government says it has offered Thurrock fiscal help. It has besides established the Office for Local Government to amended accountability, assistance observe emerging risks of nonaccomplishment and enactment section authorities.