A report on the future of further education by Sir Andrew Foster, the former head of the Audit Commission, warns that "a significant minority" of colleges are delivering an inadequate education.
"Time should be called on those institutions that have relentlessly failed their learning communities," the report adds.
Sir Andrew estimated that the number of colleges involved was "around 10 per cent". Figures from Ofsted, the education standards watchdog, show that between 10 and 14 per cent of the country's 389 colleges failed their inspections between 2001 and 2004, although latest figures show this has been reduced to around four per cent.
Sir Andrew recommends that the colleges, which are accused of providing poor quality courses and inadequate teaching standards, should be put on notice to improve within a year.
If they fail to pull their socks up, their services would then be taken over by a neighbouring and more successful college, a private company or charity, or they could even be closed with their courses being transferred elsewhere.
Sir Andrew described the performance of these colleges as "a millstone round the necks of the further education system".
"Putting such institutions on a 'fresh start' would address the poor service they deliver and the impact this has on the image of the college system as a whole," the report says.
"Though the number of colleges which are judged inadequate is falling, the position is unacceptable. The Government cannot allow this position to continue."
Sir Andrew warned that Britain was slipping down the international league tables for developing skills.
"Some of the Tiger economies (India, China, Korea) are investing in skills in a way which is well beyond what is happening in this country and well beyond any aspirations we have had in recent times," he said. "It doesn't feel to me that we're 100 metres behind the race. It sometimes feels to me that we're in danger of being lapped."
Sir Andrew's report recommends that colleges should be told their top priority is to boost skill levels and the job prospects of millions of young people.
Paul Mackney, general secretary of NAFTHE, the university and college lecturers' union, called for more funding. "To retrain the nation will need a better motivated less demoralised workforce," he said.Reuse content