This paper examines the proposition that the welfare policies enacted and legitimised in the name of ‘choice’ have the effect of increasing the effective choice of service by consumers of welfare. The example of residential care of the elderly is used to illustrate the ways in which privatisation has influenced choices of care for elderly people in Devon. The paper reviews empirical material from two surveys of private homes in Devon in order to throw light on the ‘myths’ and realities of choice in residential accommodation and in other welfare provision available to the elderly in Devon. The paper identifies as the key debate the question of priorities: whether resources should be concentrated on providing suitable residential places for the increasing number of the very disabled elderly or used to increase the alternatives for the larger, more able groups. The latter option can perhaps be reasonably achieved through market mechanisms, whilst the former is more likely to require the specialised skills of social workers and other caring professionals. Although it is possible to argue that the growth in numbers of private old people's homes represents an increase in choice for the elderly, on closer examination this appears too simple an assertion. The expansion of the private sector has not necessarily expanded the range of alternative forms of care. In particular, there seems a major flaw in current policies by which the operation of the DHSS subsidy increases the availability of residential rather than domiciliary care.