An engineering industry body has backed college calls for more flexibility, saying they are better placed than the Government to meet employer needs.
The New Engineering Foundation (NEF), an industry-backed charity that supports vocational education in science and engineering, said the needs of employers were overlooked in an overly centralised system.
Sa'ad Medhat, the foundation's chief executive, said: "At the moment, the result of all the pressure on colleges from above is that the Government, rather than communities, has been the customer.
"Colleges deserve the freedom to become more responsive to business, not by being pressured from Whitehall but by being given the elbow room they need to build their own relationships and do it their way," Professor Medhat said.
The foundation recommended cutting the number of people overseeing further education to ensure a greater proportion of funding reached the front line.
It called for age bands in apprenticeships to be abolished so that funds can be spent on whoever has the greatest demand for training.
Providers are being urged to recruit 16- to 18-year-olds, where recruitment has been below target this year, instead of the over-25s, where demand is high.
The foundation also called for a simple funding system which would reward colleges for working with local businesses.
The recommendations echo colleges' own calls for greater freedom. A draft "manifesto for colleges" earlier this year from the Association of Colleges said: "It is important, as major corporations, that colleges should be free to operate, where appropriate, as businesses."