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This report, which builds on two earlier research projects supported by the Joseph Rowntree Foundation, is aimed at stimulating debate about welfare reform and to ensure that the concerns of people with learning difficulties are included in this debate. It is presented in six chapters: the first chapter sets the context of the report; chapter two explains the basic principles of supported living and supported employment; chapter three describes some of the barriers and structural problems faced by people with learning disabilities; chapter four sets out the risks and opportunities from the reform; chapter five offers some principles on which to develop a policy framework as well as recommendations for change; and the final chapter discusses four major sets of events that occurred between the first and final drafts of this report.