An analysis of the response of British health, social care, and housing agencies to the needs of the elderly was conducted. The purpose of the study was to determine how the British are improving their services to meet the needs of the rapidly increasing population of the elderly in an era of slow growth of public spending. The analysis showed the presence of some types of innovation particularly suited to improve efficiency: (1) more intensive inputs of home care delivered at more appropriate times; (2) plans organized by social service departments using social workers to undertake some of the core tasks of case management and organize more intensive care, targeted at those at high risk of admission to institutions for long-term care; (3) neighborhood-based care plans intended to increase the degree of horizontal target efficiency of the care system and reach some types of clients with severe needs; and (4) plans involving the collaboration of housing with social care agencies to combine shelter with support. Most such efforts, however, are local in scope and fragmentary in effect, not parts of a clearly articulated plan. What is now needed is greater clarity in the analysis of the main sources of inefficiency and models that relate service policy and arrangements directly to these sources of inefficiency. One such model, the "community care approach," developed at the Personal Social Services Research Unit in collaboration with various British agencies, creates incentives to clients, caregivers, and workers who manage the allocation of services to improve efficiency. Early evaluation of applications of this model shows a halving of the possibility of entering long-term care homes and improvement in recipients' quality of life. (KC)