Research into delivery of psychiatric care has shown that the chronic mentally ill (CMI) patients continue to pose major difficulties not only in terms of economic cost to patients, their families and the state but also in the ability of authorities to provide adequate facilities in the community. The latter is especially important now because of rapid discharge of patients into the community from long-stay wards of mental hospitals, often with little rehabilitative preparation and even less consideration of the effects of the environment into which they are relocated. Although follow-up in some cases has been of exceptionally high quality, a majority have filtered through the network into inadequate residence; this surely is unacceptable. The high prevalence of mental illness among the homeless and the difficulties of providing care for them by an inflexible health service have been highlighted by a recent report of the Royal College of Psychiatrists (Bhugra et al, 1991). This paper attempts to define the possible adverse consequences of the recent reorganisation of National Health Service (NHS) on the care of the chronic mentally ill.