Gloucester City Council faces mounting financial challenges as the King’s Walk Shopping Centre continues to hemorrhage nearly £1 million annually, with council leaders confirming the property has never turned a profit for taxpayers. This revelation emerged during a recent cabinet meeting on December 10, where officials considered requesting a government bailout of up to £17.5 million to support the council’s recovery efforts.
The shopping centre is among 277 properties owned by the council, who may potentially sell some assets as part of a broader financial recovery strategy. Council leader Jeremy Hilton (LD, Kingsholm and Wotton) emphasized that while properties might be sold eventually, no immediate disposals are planned, as the council aims to repay the loan over several years.
Hilton recounted that under a previous Conservative-led administration in 2017, Gloucester City Council borrowed up to £80 million to invest in commercial real estate — a decision he and Labour group leader Terry Pullen opposed. The acquisition of King’s Walk Shopping Centre, secured through a long-term lease, has proven to be a financial drain the council cannot easily exit.
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“As far as we are aware, it has never made any money whatsoever,” Hilton stated. “It is costing this council nearly £1 million a year at the moment. It’s on a long lease that we can’t get out of.”
Looking ahead, the council plans to enhance management of King’s Walk to increase income and attract new tenants. “It hasn’t been run particularly well,” Hilton admitted, stressing the need to bring in financial experts and property management specialists to improve tenancy and revenue streams, which would benefit the council’s overall finances.
Despite current setbacks, Hilton affirmed the council’s commitment to avoiding bankruptcy. “We want to stick to that plan and push as hard as we can without running so fast that we fall over,” he said.
Acknowledging that Gloucester City Council is “asset rich,” Hilton noted there are numerous surplus properties that are non-essential for council operations and do not generate additional income. These could be sold to bolster the council’s financial position moving forward.