More than two million children are still not getting a decent education, and a youngster's chance of attending a good school is often too dependent on where they live, Ofsted warned.

There are stark inequalities in England's education system, with pupils in some areas of the country facing a less than 50% chance of being taught at a good or better school, the inspectorate said.

In his first annual report, Ofsted chief inspector Sir Michael Wilshaw said that for a country which wants to be a global leader, England's schools system is not good enough and must do better.

The report shows that there have been improvements in the last few years, with 70% of schools now rated good or outstanding compared with 64% five years ago and an extra half a million pupils are now being taught in good or better schools.

But it also means that almost 2.3 million children are still attending a "small minority" of schools that are less than good, with inconsistency or too much prescription in teaching "almost always at the root", according to Sir Michael.

In his commentary on the report, Sir Michael said he "worries most about the 30% or so of schools which, at their last inspection, and often before that, were judged to be no better than satisfactory".

In these schools, lessons are often "formulaic", he said, with students that are not fully interested or being stretched to reach their full potential and in most assessments, a rating of seven out of 10, or 70%, could be seen as "fair but could do better".

The new report warns that the overall rise in the performance of England's schools masks real challenges for the education system as it raises serious concerns about the "marked inequality of access" to a good school across the country.

Brian Lightman, general secretary of the Association of School and College Leaders (ASCL), said: "The increasing number of good and outstanding schools is a reflection of the intense efforts of school leaders and their staff to continue to raise standards. ASCL is pleased to see this recognised in the chief inspector's report.

"With such strong evidence of improvement, it is now time for the Government to trust school leaders and to stop adding further layers of accountability. For the majority of schools, which are successful and improving, Ofsted inspection should be a 'light touch' validation of schools' own self-evaluation."