Background: English policy argues that people with intellectual disabilities should be supported in their local communities. There is considerable evidence that this aspiration is not being achieved. This paper seeks to look at the subsection of people with intellectual disabilities who have expensive care needs because of challenging behaviour, to identify the decision-making processes that have led to current service provision and expenditure and to suggest improvements. Materials and Methods: We carried out a survey within five North London boroughs to investigate the characteristics of a cohort of people with intellectual disabilities and challenging behaviour in high-cost accommodation (over 70 000 British Pounds/annum). Postal questionnaires and face-to-face interviews were conducted with stakeholders with intellectual disabilities and patterns of current costs were estimated from existing data provided by the commissioning authorities in the five boroughs. Results: Two hundred and five individuals with intellectual disabilities and challenging behaviour were identified. They were accommodated in placements provided by 97 separate providers, both in and out-of-area. Those more likely to be placed out-of-area were younger, had multiple health problems, significant challenging behaviour and mental health problems including autistic spectrum disorders. The local community intellectual disabilities teams identified a number of difficulties in meeting the needs of those service users. Conclusions: Expenditure on all placements for service users with intellectual disabilities is significant. There is a notable lack of investment in local service development. A coherent approach is required, often across service boundaries. The authors suggest a model for targeted investment aimed at supporting effective local services, and reducing the need for and expense of out-of-area placements.