The revenue costs of small locally-based hospital units for the severely and profoundly mentally handicapped in Wessex were compared with those of traditional mental handicap hospitals. Contrary to expectations, the revenue costs in such units were not excessively greater than average costs in many large mental handicap hospitals. Indeed, estimates of the cost per inpatient day in wards of two large hospitals in Wessex with clients of comparable degrees of dependency showed that revenue costs in the locally-based hospital units were competitive. Rationales of the inevitable presence of “economies of scale” should not be used in the perpetuation of large residential complexes; unsupported assertions of greatly increased running costs should ...