An important component of the 1997 King's Fund report on mental health services in London was to analyse the costs of service provision. Over the six years since 1997, there have been some major policy and practice developments in the provision of mental health services in the UK, particularly the National Service Framework for Mental Health, innovations in service delivery and a 28 per cent rise in the global NHS budget. However, many of the concerns raised by the 1997 study remain. Two particular concerns are the extent of the gap between actual spending and predicted spending and the degree to which unexplained variations in service funding and provision across London have reduced. [Introduction abbreviated]