This is the conclusion of the first joint annual report on post-16 education and training in England carried out by the Ofsted and Adult Learning inspectorates.
Inspections of more than 100 colleges and 23 area-wide reviews of post-16 provision found that the FE sector and employers do not work closely enough to co-ordinate work-based learning and assessment.
Provision needed to be rationalised in many areas, and colleges needed to collaborate more effectively with local learning and skills councils, employers, schools and local authorities, according to David Bell, the Scot who heads Ofsted.
While more than 90 per cent of lessons are satisfactory or better, 43 per cent of work-based learning courses were classified as unsatisfactory or very poor. Achievement rates were too low and workplace training often poorly planned.
But college heads have condemned the report's conclusions as "confused and biased".
David Gibson, chief executive of the Association of Colleges in England, said: "The report points out substantial strengths and qualities in the work of most colleges, but goes on to criticise them for practice that is largely outside their control."