A "rump" of failure in further education colleges needs addressing to underpin a new focus on skills, a review of the sector says.
Sir Andrew Foster: "Massive need" to improve the nation's skills
A government-commissioned report by Sir Andrew Foster says they should have a deadline to improve or face takeover by another college or outside body.
His wide-ranging review concludes the nation's competitiveness requires a "crystal clear" focus on skills.
Colleges should have less regulation, and clearer government support.
Sir Andrew, a former chief executive of the Audit Commission, said further education (FE) colleges performed a vital yet relatively unrecognised role.
The global economy was changing, with the "tiger" nations - India, China, South Korea - investing heavily in skills.
ENGLISH FE COLLEGES
Three million learners in total
200-plus general and 50 tertiary colleges with 2,500 to 45,000 students each
100-plus sixth form colleges with 570 to 7,000 learners
22 specialist colleges e.g. art and design
16 specialist institutions for adults, some residential
England was "not just 100 metres behind the race but in danger of being lapped".
Colleges also had a strong role in giving people a second chance at an education.
But the needs of tens of thousands were still not being met.
The number of English colleges judged inadequate or failing by inspectors has fallen from 37 in 2001-04 to 16 now, the Department for Education and Skills said.
But Sir Andrew said "a residual rump" of about 10% of colleges had not performed well.
His report said: "Time should be called on those institutions that have relentlessly failed their learning communities."
They should be subject to a review which could lead to another college or charitable or commercial provider taking over departments or the whole college.
Or they could be closed and their resources reallocated.
In time, no learner or employer should have to accept provision that was "merely satisfactory".
John Cridland of the employers' organisation, the CBI, said there was "a golden opportunity for the government to go further and open up the system fully to the best training provider, regardless of origin".
But Further Education Minister Bill Rammell said: "We do need a role for the private sector, but it's not about wholesale privatisation, it's about acting as a spur and a challenge for innovation and improvement."
Sir Andrew also stressed that "system failings" often worked against colleges' doing as well as they might.
The "galaxy of oversight, inspection and accreditation bodies" should be rationalised.
There should be better local responsiveness to employers' needs - though employers also needed to evaluate what their needs were.
He also said colleges should be required to be more responsive to what their learners experienced and wanted.
Colleges complain their funding is inadequate.
Sir Andrew said if their management were better, he would be "very surprised if there wasn't a strong case to be made" for more resources.
But there was also a major responsibility on the government.
Further education was "the neglected middle child" between schools and universities, he said.
The Education Secretary, Ruth Kelly, is expected to give a fuller response when she addresses the Association of Colleges annual conference on Wednesday.
But she described the report as "a once in a generation opportunity to reform and invest in our historically undervalued further education sector".
The association said it recognised there was more to do to improve quality.
Chief executive John Brennan said: "We know that levels of investment in adult skills are far, far below what we need to achieve in order to make our economy competitive in the 21st Century.
Shadow higher education and skills minister Stephen O'Brien echoed concerns about funding and the need to enhance the nation's skills.
"Only by freeing colleges from bureaucracy can we develop a world class education system," he said.
But their work should be "demand-led by employers".
Lecturers' union Natfhe - which has called a one-day pay strike for Wednesday - said Sir Andrew had also recognised "the pressing issues of recruiting to replace an ageing workforce, excessive casualisation, and poor pay in colleges".