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The study uses data obtained from the Learning and Skills Council (LSC) for more than 500 further education (FE) providers in order to perform a detailed investigation of the level efficiency and change in productivity of each provider over a five year period (1999-2003). The study uses data envelopment analysis (DEA) in the first instance to derive the level of efficiency of each of the 516 providers in the sample data. Efficiency is found to vary between 82% and 86% over the study period. Malmquist productivity indexes are also calculated for the FE sector and suggest that annual average productivity over the period has been four per cent, and this can be split into an annual average rate of technology change of just under three per cent, and of technical efficiency change of just under two per cent. Bootstrapping procedures are used to provide the 95% confidence intervals for the efficiency scores, and these illustrate that, while the middle performing providers (60% of the sample) cannot be distinguished on the basis of their efficiency, there are significant differences between the best and worst performing providers. A multivariate statistical analysis is therefore performed in an attempt to establish the factors which contribute to efficiency in the FE sector. The results suggest that student-related variables are more important than staff-related variables in determining efficiency levels. In particular the gender, ethnicity and age mix of the student population affect the provider's efficiency level. Environmental factors such as the local unemployment rate also have an effect on provider efficiency. These variables are also important in determining productivity change in the sector. In addition, all the analyses suggest that there are differences between types of providers in terms of their efficiency and the factors which affect their level of efficiency and productivity.