Work-based learning has "come of age" according to David Sherlock, Chief Inspector of the Adult Learning Inspectorate (ALI). But he warns that there is persistent under-achievement in key Government initiatives to get the most disadvantaged into employment.

In his annual report, Sherlock praised work-based learning, which he said had undergone "a dramatic improvement in quality" over the last four years.

The number of work-based learning providers offering training described as satisfactory or better has nearly doubled to 75%. For providers being inspected a second time, the success rate is even higher at 92%.

"I have no hesitation in saying that work-based learning has come of age," Sherlock said. "Two thirds of the best 51 providers are private companies. The national skills strategy included statistics which showed that two-thirds of the enormous sums which employers spend training their own staff, are spent with private providers."

However, despite nearly £2 billion- worth of funding the Government's basic skills programme Skills for Life was described in the report as "disappointing".

"There has been a depressing lack of improvement and a failure effectively to tackle weaknesses over the past four years," the report said. "This is despite an extraordinary injection of funds and capacity building from the Government's Skills for Life campaign."

Sherlock said that the chances of building a world beating skills strategy on the foundation of a 44% national achievement rate of five or more A*-C grade GCSE’s, including English and maths were slim.

"Our failure to properly equip so many young people for adulthood, let alone successful careers, distorts adult learning and skills provision fundamentally, hobbling its pursuit of excellence in preparation for work, workforce development and community renewal," he added.

Phil Hope, Parliamentary Undersecretary for Skills describedthe findings as "important". "ALI's report rightly highlights the enormous progress which has been made in work-based training," he said. "However we acknowledge that there is still more for us to do if we are to improve basic skills and the report will be a spur to help us identify what needs to be done to raise the quality of provision across the board."