In his foreword, Douglas Osler, the senior chief inspector, praises the colleges' "imaginative, flexible provision". Academic standards were found to be good.
But HMI believes that the rapid improvement in quality assurance of recent years needs to be stepped up. Mr Osler states: "In particular, student achievement rates should be more thoroughly analysed and the lessons acted on."
The report, based on inspections of 27 colleges between 1993-97, says that quality systems had an "uneven" impact on student selection and course delivery, the student experience and quality improvement.
The sharpest remarks were reserved for staff attitudes. "In some sections in all colleges, staff had yet to take active responsibility for promoting quality. For example, they frequently did not anticipate or respond speedily to changing curriculum needs based on technological advances or employer needs.
"There was a disappointing tendency to attribute poor student performance to weak entry qualifications or poor motivation, blaming the concept of wider access for failure.
"Most seriously, many course teams were reluctant to discuss teaching and learning issues on a collegial basis, erroneously relying on the professionalism of individual members of staff as the sole safeguard against poor practice."
The report also criticises student questionnaires which did not elicit sufficient comment about teaching methods to be meaningful. Employer views were seldom gathered systematically.
But overall HMI found staff had reacted positively to performance indicators, although there was evidence of concern that pressure to improve student achievement rates could affect standards adversely.
The report suggests that "dissemination of good practice" would show that analysis based on performance indicators can enhance quality and improve student success without sacrificing standards. There is some criticism of the few cases where "student-staff relations were about making life easy rather than challenging; lecturers were occasionally over-helpful and students excessively coached towards the attainment of limited goals".
HMI intends following up the report as part of a national quality improvement programme in which colleges are collaborating.
The report contains few references to funding problems, observing that "colleges were continuing to respond to increased accommodation and equipment needs with varying degrees of ingenuity at a time when there were severe constraints on the availability of additional resources".
Specialist accommodation and facilities was found wanting in only a few instances. But "comprehensive forward planning was urgently necessary if courses were to maintain minimum standards and if students were to develop essential technological skills".