acl Consulting was commissioned in November 2018 to undertake research for the UK Department for Education (DfE) aimed at understanding costs and cost drivers in the Further Education (FE) sector. The main aim of the research was to provide estimates of the cost of delivering good quality FE provision. Specifically, to: (1) Provide information on the average full economic cost to providers of an FE qualification at each of levels 1 to 3; (2) If practicable, disaggregate findings into a range of cost components (e.g. teaching costs, support costs, and equipment and premises costs); (3) Test how findings vary by course and provider characteristics; and (4) Develop a conceptual framework for costings for the sector. After an introduction, this report is divided into seven sections providing: (1) A review of the ways in which general further education colleges (GFECs), sixth form colleges (SFCs) and independent learning providers (ILPs) design, implement and subsequently monitor their revenue income and expenditure budgets; (2) An introduction to the way in which we collected the quantitative data for the project and what can and cannot be deduced from it. This section includes a discussion of cost endogeneity; (3) A description of the data that was collected; (4) An analysis of the quantitative data collected; (5) An analysis, based on the qualitative information gained from the interview programme, of the impacts of the current funding level (and particularly the lack of recent increases to it) on provision; (6) An outline assessment of the overall state of the sector; and (7) Some suggestions for future work.