
According to Ofsted, a lack of connection in the Diploma system can leave some learners struggling to develop and apply functional skills.
Approximately 36,000 learners enrolled last year on the courses, which combine theoretical study with practical learning.
Main strengths of the Diploma include its ability to motivate learners, Ofsted said.
The Diploma also benefits from "high quality resources, often in well equipped venues, provided opportunities for learning in work-related environments".
However, although Ofsted praised its main subject content as "strong", the delivery of functional skills, such as English, mathematics and ICT, was often weak.
Inspectors also found further weaknesses when it came to additional and specialised learning options, which were found to be limited and often "uncoordinated".
Mark Astley