BOLTON Community College will cut spending by almost a million pounds a year to meet Government requirements.

Principal Alison Bowes told scores of headteachers, governors, civic dignitaries, employers and education experts gathered at the college's annual meeting, they had "no choice" but to cut expenditure in order to be financially solvent.

The college is required by the Learning and Skills council to have Grade B financial status.

Mrs Bowes said: "We are facing an on-going financial challenge. The financial position remains difficult for us."

In order to cut costs a voluntary severance programme for members of staff has been introduced, although no redundancies have yet been made. Closure of eight of the college's satellite education centres across Bolton will also make some savings. At one site just 10 students were attending.

Mrs Bowes said none of the college owned bases will close and there will still be more than 100 sites across the town. Students affected would be offered alternative courses and no courses will be dropped.

Although the college finished the last financial year with a surplus of £1.1 million, a loan of £400,000 must be repaid to the Learning and Skills council. In addition, the college's trading subsidiary had a deficit of £223,000 in the course of winding down its activities.

Mrs Bowes added: "Despite increases in student numbers over the last two or three years, government funding is reducing, therefore college income has been reduced."

Complex data that must be collected for each of the 20,000 enrolled students could also pose financial difficulties.

The college must keep a large database of individual student records, with about 40 pieces of information per student. Evidence provided by the data determines funding levels -- and auditors insist records are 100 per cent accurate.

Mrs Bowes said maintaining the accuracy was a problem facing all colleges and that they would employ consultants to check the data.

She said: "The audit for last year was showing we may not be able to claim for about 20,000 funding units where evidence does not meet the auditor's stringent requirements."

Throughout the past year -- which has seen Bolton College merge with the council's education service -- Mrs Bowes said there have been many "ups."

Inspections by Ofsted and the Adult Learning Inspectorate had been very positive overall and the college has made improvements in e-mail, started a new website, and has formed new policies and procedures.

Mrs Bowes added: "In terms of student achievement we are very positive about the future."