Legislation is planned to compel colleges and training providers to work together to meet employers' and individuals' demands for skills.
The Department for Innovation, Universities and Skills said it wants more areas to follow the example set by the London Skills and Employment Board, which oversees skills provision to ensure it meets the needs of the local economy. It wants to see greater efficiency and shared services by introducing a formal duty to co-operate.
A report on its FE and skills system reforms said: "Colleges and providers have a key role to play both individually and collectively at sub-regional level to ensure that within a geographical area provision accurately reflects employer and wider community demand.
"We know colleges and providers work effectively together in a wide variety of ways and we want to build on this by encouraging them to establish self-organised networks to meet the needs of employers in relation to skills training."