Mental health services for elderly people are patchy and inconsistent, with many areas continuing to sink resources into hospital and residential care while failing to deliver joint working, according to the Audit Commission.

Expenditure on specialist services for over-65s varied from£300,000 a year per 10,000 elderly population, to£2.5m, with huge differences in spending and services in neighbouring areas (see graph).

Despite a government requirement for health and social services to develop joint strategies, an Audit Commission report says pockets of best practice are often due to the efforts of a single senior clinician or manager .

Peter Scurfield, project auditor for the report, said less developed areas appeared to be trapped in a vicious circle.

Because they don't have integrated services, people are being admitted to nursing homes with lower levels of dependency. But having committed money to residential care, they cant develop the services needed to get themselves out of the circle.

Unimaginative use of resources, rather than underfunding as such, was holding back progress, he added. It was the areas that had not developed joint working that made the biggest noise about needing more money, he said.

The report calls on mental health trusts to make special efforts to contact GPs and provide them with specialist support and training. This was found to be crucial to good-quality services. Most GPs had not received any specific training in managing dementia, and only half thought it was important to look for early signs of the disease. GPs who had access to specialist advice were much more likely to value early diagnosis of dementia and depression.

But only half of the GPs surveyed believed that their local specialist services were adequate.

A survey of 12 areas found that less than half of carers for dementia sufferers had been asked if they needed help or told how the condition would affect their relative in the future. One woman had provided care for four years with no support.

Report author Judy Renshaw said some trusts were unable to make improvements because they did not know enough about their own services.

The lack of basic information is pretty stunning. We did a simple mapping exercise - asking how many beds and staff were being provided - and a lot of the trusts couldn't supply that.

In response to criticism by local agencies, the Audit Commission is attempting to make its own work more joined up by sending a single audit team to examine all the mental health agencies in a local area, instead of separate teams for health and social services.

Forget Me Not is the first in a series of studies and audits planned by the Audit Commission for this year and next on the theme of promoting independence for elderly people.

The aim is to help local services respond to the governments decision to prioritise elderly peoples mental health.

New standards for the care of elderly people will be included in a national service framework due out this year.

Forget Me Not: mental health services for older people .

Audit Commission Publications, 08005022030.£20.