The paper reports on a study carried out in 1990 for the Department of Health looking at the development of local authority multi-purpose residential homes for elderly people in England and Wales. A national survey showed that one in five public sector residential homes for elderly people would soon be multi-purpose. This proportion could be expected to increase in the 1990S. Many of these homes had become the centre for virtually all the community support services for elderly people in the neighbourhood. Despite some obvious management advantages in making use of residential home facilities for older people in the community, there have to be serious reservations about a multi-purpose model. Case studies in six multi-purpose homes suggest that residents themselves may gain little or nothing from this arrangement. Few interact with elderly people from the neighbourhood in the day centre. So much activity on the premises meant that invasions of residents' privacy and space were common.