Just over two years of swift decline have left Southwark College unviable: as Ofsted this week confirmed the college leadership’s belief, the board announced a merger with Lewisham College in a bid to preserve local vocational provision.

Even after cutting the south London college’s costs by a third, or about #163;6 million, principal Ruth Gilbert said the deficit for the year up to August was #163;3.1 million. As Ofsted put it: “The college’s weak financial position impedes its ability to sustain improvement.”

Ms Gilbert, who took over as principal in June last year, said that she was unable to afford to hire new permanent staff to help consolidate her changes in the curriculum, which were aimed at reversing the decline. She hoped Lewisham’s “intellectual capital” as well as its financial resources would come to the college’s rescue. Less than three years ago, the college was making surpluses, she said, but it was heavily focused on adult education, basic skills and English for speakers of other languages, areas that have seen funding reductions. Meanwhile a “narrow” curriculum was seeing teenagers travel out of the borough for their vocational studies.

Using sponsorship and expertise from businesses in the surrounding #163;10 billion regeneration area, such as the company constructing The Shard, the European Union’s tallest building, the college created a broader vocational offering covering nine new curriculum areas, from construction to hair and beauty. Sellar, the company behind The Shard, contributed #163;1.9 million and offered job interviews to 75 per cent of students. “What they have achieved during this time has been hard won and done well, but much of it is recent,” inspectors said.

Under the merger proposal, college campuses will stay open, and a 700-student 14 to 19 university technical college with a focus on healthcare is due to be located on the Bermondsey site. In a further sign that innovative alternatives to merger are struggling to establish themselves, the college considered a series of proposals from commercial partners, but rejected them because they could not maintain the breadth of provision or complete a deal quickly enough.

“What does Southwark College need to do to improve further?” Ofsted asked. “Secure the future of local provision in the borough of Southwark by continuing to develop and implement the college’s strategic plans to work more closely or merge with local providers.” On that point as well, the college agrees.