The measurement and determinants of efficiency and productivity in the FE sector in England

This study uses data for more than 500 Further Education providers in England to investigate the level of efficiency and change in productivity over the period 1999-2003. Using Data Envelopment Analysis we find that the mean provider efficiency varies between 82% and 86% over the period. Productivity change over the period was nearly 17%, and this was comprised of 10% technology change and 7% technical efficiency change. However, bootstrapping procedures show that the middle performing providers cannot be distinguished on the basis of their efficiency, but there are significant differences between the best and worst performing providers. A multivariate analysis is therefore performed, which shows that student-related variables, such as gender, ethnic and age mix are more important than staff-related variables in determining efficiency levels. The local unemployment rate also has an effect on provider efficiency.