Ofsted spoke to students at colleges with good provision in the arts
Further education colleges are concerned that funding changes could mean restricting the range of arts subjects, according to inspectors.
The Ofsted report also says many arts students question the suitability of GCSEs in preparing them for higher-level work.
Ofsted examined provision in arts-based qualifications in 22 English colleges judged as "good or outstanding".
The government says it has prioritised skills which will be useful for work.
"The changes to adult learners' funding in colleges have raised some concerns about the ability to maintain the breadth of curriculum offer and sufficient opportunities for progression," the Ofsted report noted.
Evidence for concern?
It said smaller colleges were more likely to express concern about the availability of arts subjects, such as art, music and design.
In recent years the government has focused its funding towards work-based skills, literacy and numeracy.
Many colleges now say they cannot afford to fund the full range of courses aimed at adults.
Ofsted's director of Learning and Skills, Melanie Hunt, said the full effects of this shift were not yet known.
"We are saying that colleges are expressing concern," she said, "but we did not see evidence for that concern".
The colleges visited were offering a high level of provision, with mainly modern equipment and facilities for students.
Students commonly reported that GCSEs in arts-related subjects "had not been an effective preparation" for their next qualifications.
"Many of the students interviewed by inspectors said they had learned more in their first six weeks at college than in all their previous experience of the subject," the report said.
Melanie Hunt said it was "striking that so many students reported feeling this".
But she said the GCSE was "absolutely fit for purpose".
"This is a natural reaction when making a transition to higher-level, broader study."
Ofsted's report said the best teaching resulted from teachers feeling autonomous and confident enough to take risks and try new ideas in the classroom.
Where the curriculum was reviewed often and teachers had a strong focus on learning, the results were positive.
In many of the colleges, curriculum leaders set out high expectations from the outset from both teachers and staff.
They emphasised the importance of students developing a professional ethos.
And pupils benefited from learning with a tutor who was considered a practitioner and still professionally active in their field, the report noted.
But on occasions colleges were not exploiting the potential for learning through work-related study, Ofsted said.
Melanie Hunt said employers might be able to offer fewer such opportunities during the recession.
The Department for Innovation, Universities and Skills said: "Our funding strategy has focused on prioritising investment towards longer, valuable courses that give people the skills and qualifications they need to secure their future, whether by enabling them to progress in their studies, or to help them get a good job."
A spokeswoman said that funding for 2009-10 would increase to £3.3bn.
Where there was still demand for a course which was not being funded publicly, colleges would be expected to run it at full cost price, she said.