Performance is particularly poor in some small school sixth forms where, his report says, teaching quality is "varied" compared with larger institutions where it is generally "satisfactory or better".
Also of concern to smaller sixth forms is that a third of those with fewer than 100 students are not cost-efective.
Patchy availability of post-16 education has also proved to be financially wasteful, says the report, published by the Office for Standards in Education.
"The lack of strategic direction and co-ordination of 16-19 education has led frequently to duplication, waste and patchy provision in many inner-city areas. In some cases, many students are obliged to travel considerable distances to study."