A HAMPSHIRE college could be merged by the next academic year owing to a cash crisis that threatens its future.

Totton College will not be financially viable past next year if it does not take drastic action, a government report has warned.

Minister for skills Nick Boles has written to the college urging it to take immediate action after a series of damning financial reports.

The latest was published this month in which sixth form commissioner Peter Mucklow warned that the financial position of the college has got so much worse that urgent action is required to stabilise the college's future.

He said: “The college faces an immediate crisis in its cash position, which is worse than that predicted in the spring of 2014.”

According to the colleges own projected figures the monthly cash shortfalls rise from £160,000 in January to over £1m in March 2015.

Moves to stabilise the immediate position include bringing forward its payments from the Education Funding Agency, increasing in its bank overdraft and introducing new cost saving measures.

But longer term, the college has been advised to merge with another further education provider.

A spokesperson for Totton College said that the process would start in January when the search for a partner organisation would start, with a timetable that could see the merger confirmed by next September. She added that there was no question of “the doors closing” as the plan was in place to ensure Totton's future was secure.

Principal Mike Gaston said: “Any partnership will maximise the offer available at Totton College, and meeting student's needs will absolutely be at the heart of any decisions around this in the future. We plan for the courses that are in demand to still be available in September 2015.”

He added: “The decision to find a partner follows a full options appraisal and any future decision will focus on protecting and strengthening the range of learning for young people, to support the economy of the area and improve the career prospects of our students.”

The dire financial situation the college finds itself in is being blamed on an unanticipated shortfall in delivering apprenticeship numbers for those aged over 24, which will result in a clawback of funds from Skills Funding Agency (SFA) by March 2015.

That combined with inaccurately-projected income from provision for students with high needs and restructuring costs has all led to the Calmore Road facility becoming uneconomically viable.

Despite the position of the college government ministers have backed Mr Gaston, to remain in post whilst the merger takes place. In the report he was praised for this leadership skills despite the dire financial state of his organisation.

A spokesman for the college confirmed there would be no job losses short term but following the merger the college would have to undergo a restructure.