Adults with the most severe disabilities are getting the worst service, according to a report by the Adult Learning Inspectorate.
The ALI - which has a history of hard-hitting reports including its recent expose of the state of training in the armed services - is due to be merged with the Office for Standards in Education.
Its latest report, Greater Expectations?: provision for learners with disabilities, says: "These failures are most evident in provision for those learners who are unlikely ever to be able to live independently."
The report comes after FE Focus reported in January that the Learning and Skills Council had been unaware that Beaumont, a national residential college in Lancashire for students with cerebral palsy, had been turning applicants away because it did not have enough cash to take them.
It was also revealed that neither the college nor the LSC were able to account for where students turned away ended up - in particular whether they had dropped out of the education system.
The college, owned by Scope, the cerebral palsy charity, admits its financial management has been weak, but insists the LSC's funding is nevertheless insufficient to meet students' needs, including residential care.
The ALI report, published this week, said the failure of education and training to offer "defined pathways for learners to meaningful outcomes"
had been masked, because of a lack of data on where learners end up. The report says problems extend to education for students who should be able to progress to jobs.
Its says that, despite the Disability Discrimination Act 1995, the disabled still face obstacles "both structural and attitudinal".
The LSC spends pound;1.3 billion a year on students with disabilities.
David Sherlock, chief inspector at the ALI, said: "This country has both an ageing population and a falling population of working age.
"Disabled people have an important contribution to make to our economy - but are not being given the support. We have found that the overall system for training adults with disabilities is not good enough. All too often, the curriculum for learners with disabilities does not prepare them adequately with skills to participate in the labour market."
The report nevertheless praised FE colleges for "very successful" work to include the disabled on mainstream courses, and noted better support for dyslexics and a rise in adults with mental health problems studying in colleges.
Bert Massie, chairman of the Disability Rights Commission, said: "This is a wake-up call for the adult learning sector. Public money is being wasted because of a lazy fatalism about what disabled people can achieve.
"We can no longer keep this large group of adults in a state of permanent, expensive but ineffective training. We must ratchet up our expectations."
Melanie Hunt, director of learning and the LSC, said: "In identifying provision that is not of good quality, the report also identifies good practice and identifies ways forward."
The report suggests that:
* more people with disabilities be included on decision-making bodies
* better targets for funding be set to meet the long-term goals of disabled students
* the disabled be encouraged to do apprenticeships
* independent centres be set up around the county to assess students' needs
* the education system should work better with other agencies