Inspectors from the Office for Standards in Education and the Adult Learning Inspectorate reported that schools and further education colleges in Sandwell served students poorly and that results were "stubbornly low".
Area-wide inspections of post-16 education have been carried out since 1999, and have now been extended to down to the teaching of 14 - year-olds as part of the Government's drive to create a coherent 14 to 19 phase of education.
Alan Johnson, minister for life-long learning, said the new inspections were the "cornerstone" of plans to transform the teaching of teenagers and would ensure that unacceptable work was identified.
In Sandwell, inspectors reported that the local education authority and the local learning and skills council (LSC) had no coherent overall plan for 14 to 19-year-olds.
They also found 16 other major problems, including that the range of courses available to teenagers was too narrow, that too few 16-year-olds continued in education, and that young people's results were below the acceptable standard at all levels.
Inspectors said that progress had been impeded by a lack of recognition from schools and colleges that they needed to work together to provide more flexible options for their students.
"Relatively small numbers of students are moving between providers to take advantage of options not at their 'home' base," the inspectors said.
The quality of pastoral support and career advice for young people in Sandwell provided by the local Connexions service was also rated as unsatisfactory overall. Schools were reported to be critical of the variable quality of the advisers.
Chief inspector David Bell said Sandwell's predicament was less bleak than first appeared as the LSC and LEA were beginning to work together. There was also some good teaching particularly in pupil referral units and special schools.
Sandwell and the local learning and skills council will develop a new plan for 14 to 19-year-olds within the next three months and inspectors will return to check on their progress in the next three years.
Eric Griffiths, Sandwell's executive director of education said: "The report shows there is much good work in our schools to build on."