Merger and the abandonment of some courses are among the options being considered for troubled North Derbyshire Tertiary College after a damning inspection report by the Office for Standards in Education.

“We have serious concerns over the financial position in the medium term,” said David Hughes, executive director of Derbyshire LSC. “The college corporation has commissioned a strategic options review to address the future of the college.

“The LSC will take any action necessary to ensure the needs of the learners are met.”

The existing governors will be joined by two members of the local LSC in Derbyshire - Glenys Goucher and David Williams. Mr Hughes will also attend corporation meetings as an observer.

The LSC has been involved since December as a result of “serious concerns about the quality of provision and financial position” at the college, raised in the draft inspection report. The final report is expected to be published within the next two weeks.

Three members of the governing body, including its chairman, Eric Swain, are Labour Party members of the county council. One governor, former Labour county councillor Sean Stafford, was jailed for 18 months in 1993 for fraudulently claiming pound;13,500 in loss-of-income expenses from the authority when he was chairman of its finance committee.

The LSC stresses it does not intend to object to his appointment, which was allowed because his conviction is more than five years old.

“The inspection report is due out at the end of this month,” said Mr Swain. “It refers to some teaching and learning experiences which have to improve. It refers also to the accounting and the reporting of accounts.”

He refused to comment on Mr Stafford’s appointment to the board, a year ago.

Mr Stafford said: “My experience has been discussed fully with the governing body and is not relevant. I am just a person who is getting on with his life and trying to make a contribution to the local community.”

North Derbyshire is the latest in a line of colleges to feel the heat of the new inspection regime under the joint arrangements between OFSTED and the Adult Learning Inspectorate.

Since introduction of the joint inspection framework last year, three of the first five reports have led to principals leaving their posts. Stephen Grix, head of post-16 at OFSTED, warned the new arrangement would result in poorer grades and firmer action being taken where colleges needed to improve.

The college’s recruitment decisions are also likely to come under the spotlight. Sandra Whyte was appointed principal last month after the departure of David Bunch. Since then, Ms Whyte has left and the position has been taken by Janet Coyne.