The film begins with several tracking shots down dim corridors, making an implicit association between public institutions; hospitals, prisons, semi-public/private ones such as hotels, and tower-block housing, which is where these corridors turn out to be.

With this idea planted in the mind, we go on a car journey to a house somewhere in London. On the way we catch glimpses of what appear to be masked mannequins, standing by the road side or looking out from sitting-room windows, posing, as if in a prescribed manner appropriate to their setting. This sequence leads into the rest of the film, which takes place in a bedsit, in which the lone character, played by singer-songwriter Kevin Coyne, sings, rants, smokes and reminisces.

The film is as much about the character's banal interactions with the furniture as it is also about him and his stories. Behaviour, the habitual and largely subconscious routines out of which our days are structured, forms the texture and pattern of our daily lives. The Institution is about these patterns, and about how and where they are played out.