The picturesque Ashe Park estate in North Hampshire showcases quintessential English charm, featuring a yew tree maze, tranquil lakes, charming cottages, a tennis court, and a unique “party barn” across its 232 acres. This remarkable property, once visited by celebrated author Jane Austen, is owned by Liam Kavanagh, a businessman based in Dubai.

Unbeknownst to them, the residents of Thurrock, an Essex borough located 90 miles away, indirectly financed Kavanagh’s lavish lifestyle with the council’s significant investments. Between 2017 and 2020, the Thurrock council allocated nearly £400 million—borrowed from neighboring local authorities—into bonds associated with Kavanagh’s firm, Rockfire Capital. Revenue from 32 solar farms across the UK was supposed to cover the interest.

Thurrock council has accused Kavanagh, 47, of allegedly misappropriating around £150 million for personal indulgences. In a startling legal complaint initiated last month, they assert that the funds were spent on extravagant purchases, including £9.1 million for a Bombardier private jet, £13.7 million for a yacht, £3 million for a property in Mallorca, and £2 million for a Bugatti Chiron.

This financial debacle has turned Thurrock into a case study for poor fiscal governance, highlighting the failings of local councils, alongside others like Croydon, Woking, and Slough, which have faced similar financial turmoil due to reckless investments.

Documents reveal that Kavanagh acquired Ashe Park just months after securing a £40 million installment from the council for his struggling solar venture.

Further filings suggest that not only did Thurrock fall for Kavanagh’s charm—evident from social dinners at upscale venues—but also mismanaged additional investments elsewhere, resulting in a loss of £24.2 million on high-interest bonds linked to loans for small and medium-sized enterprises (SMEs). The bonds, issued by Just Cash Flow with an interest rate of 8.5%, carried substantial risks that should have been evident, given the backdrop of near-zero Bank of England interest rates at the time.

The council managed to receive £4.7 million in interest until these bonds defaulted. When they matured in November 2021, no repayments were made, and Just Cash Flow subsequently went into administration, leaving Thurrock with nothing.

Bedford Row Capital Advisers, which recommended this scheme, notably rated these bonds as very high quality despite being unregulated by the Financial Conduct Authority. The company itself collapsed in May.

At the time of these investments, Thurrock was under Conservative leadership, but the current Labour administration is now pursuing legal action to recover funds lost by its predecessors. They are suing Kavanagh and Laven Advisors, a regulated financial firm associated with Bedford Row, which is reportedly preparing to contest the lawsuit.

While legal battles continue, Thurrock residents are adversely impacted. Following the council’s declaration of effective bankruptcy in 2022—largely due to losses related to Kavanagh’s investments—council tax has surged by nearly 20%, essential services have been drastically cut, and assets are being liquidated, including the possible closure of the council-run Thameside Theatre.

In Grays, a town within Thurrock, public sentiment reflects growing discontent. Margaret, a pensioner who was enjoying a moment outside a local bakery, expressed frustration over reduced bin collection frequency, which now occurs every fortnight instead of weekly. “With this hot weather, it just makes the bins smell worse,” she lamented.

Like many councils, Thurrock has been attempting to offset severe funding cuts from the government—funding that plummeted 55% in real terms between 2010 and 2020—by making risky commercial investments with borrowed money.

The severity of Thurrock’s miscalculations stands out, especially considering a 2008 incident when 108 councils lost over £1 billion by investing taxpayer funds in collapsed Icelandic banks, which similarly provided high-interest returns but proved unsustainable.

Experts attribute such financial crises to a lack of oversight following the abolition of the Audit Commission, which was tasked with monitoring local authority finances since 1982.

Tony Travers, an expert from the London School of Economics, noted, “After the commission’s dissolution, there has been insufficient government capability to assess each local authority’s financial status amid a permissive environment for commercial investments.”

The Local Government Association has outlined a concerning £6.2 billion funding gap facing councils in England over the forthcoming two years. In response, a representative from the Ministry of Housing, Communities & Local Government stated efforts are underway to alleviate pressure on councils and reform the local audit system.

However, these measures come too late for the residents of Thurrock. In November 2022, directors of Kavanagh’s company, Rockfire—which had been rebranded as Toucan Energy—brought in administrators who subsequently sold its solar assets to Schroders, an investment firm, for £700 million in January.

Even with a share of these proceeds, Thurrock council anticipates a loss of £157 million from its investments linked to Kavanagh, not including any possible damages.

The council asserts they were misled into investing taxpayer funds in Kavanagh’s solar initiative. They cite emails where Kavanagh allegedly disregarded concerns from colleagues about overly optimistic forecasts for the revenue anticipated from the solar farms.

“Prices fluctuate, valuations fluctuate,” Kavanagh wrote in a January 2020 email. “This is a very long-term investment for the council… If there are any anomalies in a given year due to price changes or maintenance issues, they won’t be a problem. These funds will be utilized to establish a new family investment office, creating wealth for years ahead; that has always been my plan.”

A spokesperson for Kavanagh expressed confidence that Thurrock’s claims would be dismissed due to procedural issues. “Regardless of any jurisdictional matters, Mr. Kavanagh vigorously denies the accusations. Should the court allow the case to move forward, he will mount a comprehensive defense,” the spokesperson added.

As legal disputes evolve, Thurrock continues to face financial challenges. John Kent, the new council leader, indicated that the council may experience a minimum of five years of hardship before achieving financial stability.

In Grays, Rachel, 39, shared her struggles, stating that despite working at a local school, her earnings barely cover living expenses, with rising council taxes compounding the strain. “We’re getting less and paying more—it’s really tough,” she remarked, holding one of her three daughters close.