BackgroundThere is evidence from North American trials that supported employment using the individual placement and support (IPS) model is effective in helping individuals with severe mental illness gain competitive employment. There have been few trials in other parts of the world.AimsTo investigate the effectiveness and cost-effectiveness of IPS in the UK.MethodIndividuals with severe mental illness in South London were randomised to IPS or local traditional vocational services (treatment as usual) (ISRCTN96677673).ResultsTwo hundred and nineteen participants were randomised, and 90% assessed 1 year later. There were no significant differences between the treatment as usual and intervention groups in obtaining competitive employment (13% in the intervention group and 7% in controls; risk ratio 1.35, 95% CI 0.95–1.93,P= 0.15), nor in secondary outcomes.ConclusionsThere was no evidence that IPS was of significant benefit in achieving competitive employment for individuals in South London at 1-year follow-up, which may reflect suboptimal implementation. Implementation of IPS can be challenging in the UK context where IPS is not structurally integrated with mental health services, and economic disincentives may lead to lower levels of motivation in individuals with severe mental illness and psychiatric professionals.