Only half of those on apprenticeships in England finish them, the chief inspector of adult education has found.
Nine out of 10 work-based training courses meet inspection standards
Although standards of training had improved dramatically overall, David Sherlock said low apprenticeship completion rates were "unacceptable".
He also warned that advances in skills training risked being lost if "constant changes" to the system continued.
However, overall a genuinely integrated skills sector that is a real resource had been created by hard work, he said.
Now 90% of work-based training met inspection standards, compared with 40% five years ago, he said.
In his annual report, Mr Sherlock said: "We now have a genuinely coherent 'learning and skills sector', just at the moment we have renamed it 'the further education sector'.
"Providers are now well able to withstand, and even respond positively to, direct competition with one another to secure government contracts."
And the biggest advances were in programmes for the most disadvantaged people in society - highlighted in the past as "woefully inadequate", he said.
But, despite better standards of training, success rates for learners are still lagging behind, with just 51% of learners in England completing their apprenticeships in 2005-6.
However, this is an improvement on 2003-4, when just under a third of learners finished their apprenticeships.
Detailed analysis for the Adult Learning Inspectorate revealed those doing apprenticeships in the area of hospitality fared the worst in the completion stakes, with only 45% reaching the end of their courses.
Second worst was health with 46%, closely followed by retail and sports and leisure with 47%.
This was partly due to the nature of these industries, where there was a high turnover of staff and the fact that it was not yet possible to take a part-completed apprenticeship from one job and complete it in another.
Introducing an "apprenticeship diploma" on a pilot basis could assist retention rates, he added.
"There is no real doubt that the absence of such an award discourages those who believe they have mastered the meat of the thing from persisting with studies."
Just such a diploma is to be piloted by the Qualifications and Curriculum Authority.
But Mr Sherlock also bemoaned the lack of continuity in the skills training sector and called on the government to move away from quick fixes and think harder before reforming systems.
He said: "One thing has become absolutely clear to the Adult Learning Inspectorate over the past five years - continuous improvement demands continuity.
"Where providers have not done well it is because they have been confused or disrupted by constant changes to policy and structure - even where those changes have ultimately been beneficial. "
He told the BBC: "You don't keep pulling a plant out to check that it's growing - you don't do anything once it's got growing.
"That's exactly the situation that we need to have in adult learning."
Other findings include:
Success rates among adult learners in colleges have improved steadily from 69% in 2002-03 to 76% in 2004-05
Only 12% of work-based learning providers now fail inspection
Adult and community learning providers have halved their failure rate in three years
84% of training in prisons inspected in 2005-6 were found to be better
Education minister Bill Rammell welcomed the report, adding: "We must seize the unprecedented opportunity to bring about cultural change in the nation's attitudes to skills.
"We need to dramatically raise awareness and aspirations on skills. Improvements detailed in the Chief Inspector's report today will support this drive."