De La Salle Sixth Form College, in Salford, will shut at the end of this academic year, ending 70 years of education on its site, governors announced this week. Its 340 students have been told they will be given places in nearby colleges, but the 40 staff face redundancy.

News of the closure will send shockwaves around a sector where predictions of a college closure have been rife for some time. Figures out this week revealed a Pounds 77 million cash shortfall up to the end of July this year in FE.

The possibility of De La Salle’s closure was raised early this term, when a dramatic shortfall in enrolments following a highly critical inspection report put the college’s financial future in doubt.

Governors, keen to maintain the college’s Catholic identity, explored the possibility of merging with nearby Loreto Roman Catholic Sixth Form College, but Loreto found it could not afford to bail De La Salle out of trouble.

A letter from chair of governors, Brother John Southworth, to students blames the closure on the college’s failure to attract “sufficient Catholic full-time students, of the 16-19 age group, to meet targets”.

The college, owned by the De La Salle order, feels it has suffered because of its “designated” status, which means its governors hold full personal liability for any deficit. In incorporated colleges, which make up the majority of the FE sector, governors have only limited liability. Designated status also means De La Salle, unlike other colleges, has no assets it can borrow against to get itself out of financial difficulties.

Since September, De La Salle has been run by an acting principal, John Neary, “on loan” from another Catholic college in Leeds. He described the closure as “terribly sad”.

Staff claimed this week that the recent inspection report badly misrepresented the college and indirectly caused the closure. They say the report was “riddled with inconsistencies, contradictions and misrepresentations”.