Community care has failed the most vulnerable members of society and ‘urgently’ needs reforming, a think tank has concluded.

The Centre for Social Justice, set up by work and pensions secretary Iain Duncan Smith, said mental health provision had not expanded sufficiently following the closure of asylums more than three decades ago.

Those suffering the most tend to be the poorest members of society, according to their report.

CSJ executive director Gavin Poole and Dr Samantha Callan, chairwoman of the think tank’s mental health review, said in the foreword: “We called this report Completing the Revolution because there is unfinished business dating from the closing of the asylums that began in the early 1960s.

“Medical advances in treatment and changes in public attitudes made it indefensible to keep those who were mentally ill locked up with little chance of progress or eventual discharge.

“‘Care in the Community’ was embarked upon with the goal of supporting them in their daily circumstances, helping them to build lives of interdependency in families and the community rather than dependency on institutions.

“However, the wide range of support people needed to achieve this has been highly patchy in its availability, and especially lacking for those living in the most disadvantaged circumstances.”

The CSJ said mental health costs the NHS £6bn a year - with the total bill reaching £105bn through lost working days, higher health and social care costs and family breakdowns, a figure it says is “completely unsustainable in today’s economic climate”.

The report warned that further reforms are needed “urgently” to complete the community care revolution.

It concluded: “Realising the full potential of this shift required a far-reaching cultural change that has stalled and many needs currently go unmet.

“Money is still tied up in hospital care because the services people need are not available in the community.”

Patients are being failed because “the closure of the old asylums was not accompanied by a parallel expansion of primary mental health services provided by GPs, psychiatrists and nurses”, the CSJ added.