Further education colleges that are major providers of higher education could develop a similar role to the community colleges in the US, the first major government-backed review of the further education sector has suggested.
But the majority of colleges should stop dabbling in higher education and refocus their efforts on developing the skills and employability of their students, concludes Sir Andrew Foster.
His report says that so-called mixed-economy colleges, including Croydon College, New College Durham and Bradford College, would benefit from being given greater autonomy, including the ability to award foundation degrees - just as US community colleges award two-year associate degrees.
The 113-page report, released this week, says that many further education colleges have lost their way chasing pots of money for a range of agendas, including the higher education 50 per cent participation target. They suffer from an "indistinct profile" that confuses employers and students and spreads resources too thinly.
The report says: "The range of potential roles for further education colleges far exceeds what can be funded." To remedy the situation, most colleges should be steered back to their core purpose - which in the vast majority of cases is building skills for the economy, Sir Andrew says.
But he notes that the "special mission" for subdegree work given to colleges after the 1997 Dearing inquiry has been a "source of unease in both the higher education and further education sectors", with "concerns about mission stretch and policy overload" in colleges.
John Widdowson, principal of New College Durham and chairman of the Mixed Economy Group, said the report paved the way for mixed-economy colleges to enjoy far greater autonomy.
But he added: "Other colleges will need to think very carefully about how higher education fits in with everything else they do."
David Melville, vice-chancellor of Kent University and part of an advisory group for the Foster review, said the report indicated that "there is potential for a very distinct role that colleges could provide in higher education, and there are some models in Scotland and America that could provide a way forwards".