DEBTS of £2.7 million face Lancaster and Morecambe College, which has announced plans to axe 42 jobs and sell off buildings as part of a 'recovery' bid.

College principal David Wood dealt the blow to staff last Friday - now unions are in talks about redundancy packages.

But it is business as normal for most students. Letters have been sent to those affected.

The Citizen has learned the troubles started at least a year ago.

Mr Wood told Friday's staff meeting that the college became insolvent last August.

That, coupled with falling student numbers and income, triggered the 'drastic action', he said.

L&M College is also saddled with £2.7million of debts, he revealed.

Financial difficulties were this week blamed on investment in new buildings, a fall in cash reserves, failure to meet funding targets and 'growing excess of costs over income'.

Morecambe and Lunesdale MP Geraldine Smith told the Citizen this week: "I was horrified when I knew just what a financial crisis had engulfed the college.

"This doesn't just happen overnight - there must have been warning signs but it is difficult to know where the finger of blame points."

But she said: "It concerns me that members of staff are suffering - morale is very low at the college. It is not their doing but as a result they face the possibility of losing their job."

The college has to shed the equivalent of 42 full-time jobs to save £946,000.

It is offering a voluntary severance package to its 900 staff - compulsory redundancy will follow if necessary.

Consultants were called in to help explore the options before the 'recovery' scheme was announced.

L&M College's main funding body, the Learning and Skills Council, has backed the job cuts.

Further casualties of the 'recovery' include the adult community education centre on Poulton Road, Morecambe, and Morecambe Training Centre.

These will be sold as they cannot be maintained to meet modern educational standards - students will transfer to the main site.

Mechanical engineering course is the only full time course which will close. Its 15 full-time students will complete their level at the college, with seven modern apprentices found other provision.

A new curriculum is being planned 'to make better use of staff time, accommodation and resources'.

Mr Wood says he expects the college to be in a 'robust financial position' within three years.