Falling student numbers and unnecessary duplication and competition between providers mean provision for 14 to 19-year-olds in some parts of north Wales is "not sustainable in its current format".
Inspections agency Estyn praised the standard of education and training for post-14s in Anglesey and Arfon in a recently published area inspection report.
Achievements are high overall in schools and further education colleges, it says. The majority of young people in the region are engaged in some form of education or training and, at the end of Year 13, more learners in the area progress to higher education than the Wales average.
But school sixth forms in the region are small and not cost effective, and neighbouring schools and colleges are running the same or similar courses unnecessarily, according to Estyn.
In sixth forms across the regions, more than half of AS-level classes and 72 per cent of A2 classes have 10 or fewer learners. This, says Estyn, is an "inefficient use of resources" for delivering A-level courses. The report also said there was not enough co-operation between schools and work-based learning providers, and that overall, there are not enough vocational opportunities for 14 to 16-year-olds.
Inspectors reported that leadership and management in individual institutions are good and that an Assembly government-sponsored "pathfinder" project is making good progress in analysing current provision. But outside this project, there is not enough co-operation and shared ownership of provision. "Managers who have worked hard to ensure the success of their own institutions have not focused enough attention in driving forward the area-wide strategy for 14-19 education and training,"
said the report.
An Anglesey council spokesperson said a public consultation based on the pathfinder project was due out this month, with consultations closing in January.
A Gwynedd spokesperson said: "Attention will be given to the promotion of collaboration in order to give attention to numbers in some classes. The schools service will be working closely with schools and other providers to draw up an action plan to give attention to these matters.
"We are very pleased that the report refers to a number of strengths in the area, which include participation levels, a high teaching level and the percentage which move on to higher education."
There was a high proportion of good work in both schools and colleges, and the achievement of students in work-based learning was described as satisfactory. While Estyn said the provision of Welsh medium education was a significant strength in the area, inspectors were critical of limited opportunities for learners to take part in the Welsh baccalaureate.
The report also raised concerns about the likely decrease in student numbers over the next 10 years, which will result in a sharper squeeze on finances and limited scope to expand the curriculum.