Franchise deals, where colleges farm out teaching to industry, have triggered greater growth than any other initiative since incorporation five years ago.

More than 700,000 or one-in-five students in FE is now recruited to such courses, where the teaching is done by suppliers external to the college. It has resulted in a massive expansion of community education programmes and industry-based schemes sometimes hundreds of miles from the “parent” college.

The long-awaited national survey on the schemes this week shows that it has played a major part in reaching new audiences for FE. But too often this has been at the price of quality.

The franchise system was severely undermined two years ago by reports that many of the classes supposedly taught at a distance by community groups had never taken place. Industry was also accused of using public cash from colleges to provide private staff training.

The Commons Education and Employment Select Committee last month questioned whether this type of course was an appropriate use of taxpayers’ money. A report will be published this summer.

The inspectors found much to praise in the work, said Jim Donaldson, chief inspector with the Further Education Funding Council. “The best franchised provision has widened participation in further education and afforded opportunities to employees to gain national vocational qualifications, particularly the long-term unemployed and other disadvantaged groups.”

But his report on the inspection of 14 colleges with major franchise deals showed the quality of teaching and learning was just “satisfactory”. Student support for those at a distance from the college was poor compared with that for students on home-grown courses.

Colleges were too hasty in their efforts to expand, the report Collaborative Provision says. “The desire to respond quickly to opportunities for developing provision has militated against careful needs analysis. Few strategic plans address fully how collaborative work fits with the college mission or how it relates to curriculum planning within the college.”

However, it cites many models of excellent practice: “A chamber of commerce in the north of England operates from locations throughout the region. This has made provision accessible to students for whom attendance at college would not otherwise be possible.”

Another example shows how the quality of workplace training has been improved substantially through the collaboration with a college. “One large employer operates a flexible programme which enables trainees who are on work placement and approaching the completion of their NVQ to return to the training centre so they can obtain the specialist experience they may need to finalise their qualification.”

But this is still exceptional, the report says. The lack of additional learning support, which students could expect if they were based in college, was strongly criticised.