Further education's improvement quangos should be phased out over three years and their budgets of pound;130 million handed direct to colleges and training providers, ministers have been told.
The UK Commission for Employment and Skills (UKCES) said by putting information about course success and satisfaction in the hands of students and employers, the quality-improvement superstructure could be swept away.
It would put an end to the Learning and Skills Improvement Service, the IT body Becta's FE role, Standards Verification UK and most of Lifelong Learning UK's cash.
The Towards Ambition 2020: skills, jobs, growth report also proposes a self-financing Institute for Learning (IfL) - raising questions over compulsory membership - and a review of all FE quangos and agencies.
Michael Davis, director of strategy and performance for UKCES, said the commission, which has a pound;100 million budget - mostly routed to sector skills councils - would not be immune.
"We are adding value by bringing forward an idea of how the system can be made simple and bringing resources to the front line," he said. "I feel very confident we will prove our worth."
Instead of central quality bodies, providers and courses would publish information similar to "food labelling" by the commission about success rates, student destinations and community indicators such as widening participation.
Mr Davis said: "We collect lots of information to manage the system on behalf of customers. Why not put the information with the customers making decisions and empower them to change the system?"
He denied students and businesses would use information as a "league table", as they would focus on local provision rather than ranking the system as a whole. Success rates were already tied to funding without colleges abandoning hard-to-reach students, he said.
Colleges are supportive of the proposals, which respond to long-standing calls for a simpler oversight system. The commission said Ofsted inspections could be reduced if the system was effective.
But the University and College Union said it risked recreating the world of covert selection and teaching to the test.
"Will institutions turn students down if they think there is a chance they might fail and affect the institution or course's reputation?" Sally Hunt, the union's general secretary, said. "The league-table culture has been a disaster."
Toni Fazaeli, IfL chief executive, said it would be wrong to end public funding for a voice for FE teachers when employers' sector skills councils would still be supported. She said a self-financing IfL would be less effective and more costly for teachers, as collecting its pound;5 million budget from 195,000 teachers would be less efficient.
The Department for Business, Innovation and Skills said it had discussed the commission's proposals in the run-up to producing its new skills strategy, which is due shortly.
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