The authors of this paper came together to study the development of comprehensive local residential services for mentally handicapped people. Although government policy had urged a move towards community-based services for mentally handicapped people, the numbers admitted to mental handicap hospitals for long-term care went up during the 1960s and decreased during the 1970s only due to deaths among the elderly population in hospitals and reducing long-term admissions of children. The number of people who have been moved from mental handicap hospitals to alternative accommodation in the community has been tiny. The authors discuss the three 'official' models available to guide service planners looking for a comprehensive residential service which is responsive to need: the Wessex model, the Sheffield/Peterborough model and the 'community unit' model. They state that all three of these models have run into administrative problems which seem likely to be solved only when there are more resources and when health and social service administrators can work together in a more coordinated way. This working paper is the first step in developing an alternative model for residential services.