I bumped into Marjorie Wallace, chief executive of Sane, at a Christmas party the other evening.

It was the day of Frank Dobson's statement on reform of the 1983 Mental Health Act and Ms Wallace was in what she calls one of her Joan of Arc moods. That is to say, triumphant after being consulted in various capacities by all the relevant health ministers, including that nice John Hutton, who took over after Paul Boateng escaped. 'It's a great victory. They've accepted what I was saying 15 years ago,' she explained.

Well, Jayne Zito, widow of Christopher Clunis's victim, was pleased, too, as were most MPs and some leading newspapers. The Independent called it a victory for the elusive Blairite 'third way', which must have alarmed an old left-wing warhorse like Dobbo. All the paper actually meant was a third option between locking up mentally ill people and releasing them into the community.

But the National Schizophrenia Fellowship complained of weak funding inside 'glossy wrapping', while the UK Advocacy Network accused ministers of 'pandering to damaging popular prejudice,' ie 'Madman Freed to Kill', beloved of the tabloids.

The King's Fund fretted about civil liberty problems implicit in 'assertive outreach' techniques for recalling troublesome patients.

So did several peers and MPs, the first of whom was tireless Lib Dem health spokesman Simon Hughes, whose brother is an NHS psychologist. The Southwark North and Bermondsey MP compounded his offence with Mr Dobson by pointing out a routine catch in the funding, one known to all smart politicians.

Some£700m extra was promised for mental health (including£185m for social services) over three years. That would go some way to offsetting the steady cuts which the archetypal Cinderella service endured in the 1990s, down from over 12 to 10 per cent of the NHS budget - around£3bn.

But did that mean£700m or half that figure, he asked? Since Mr Dobson claimed not to understand that part of the question, Mr Hughes assumes the answer is half, ie roughly£116m more in the first year,£232m in the second and£348m in the third. If you add the three sums together you get£700m - it merely sounds better presentationally.

The most striking presentational point about the statement, however, was the secretary of state's insistence that the cross-party policy of care in the community had failed.

Dobbo was adamant. It was not just a case of failing in the most extremes cases. Others had been left out on the street 'not properly looked after'. It was not just a lack of cash, but over-optimism.

By Cabinet standards, Mr Dobson's famous council flat opposite the British Museum, the one he refused to leave on instruction from the Daily Mail, puts him in close touch with life on inner London's streets, so we must defer to his stubbornness.

Two further points. The minister again rejected calls for a single community care authority on the Ulster model. Some say it works brilliantly, others say it does not, he replied. The other is what Hughes's deputy, Oxford's Evan Harris, called the R-for-rationing word when it comes to the newer wonder drugs like clozapine, which transforms all sorts of people's ability to cope.

Hughes had aroused the Dobsonian ire by suggesting that 'are you taking your medicine?' is not a good enough test for staying free of enforced detention. 'Weasel words,' said Frank, who is keen on tough decisions.

On advice from his brother, Hughes is unbending. The test for recall should be the same as for letting people out in the first place: can they cope? Mr Dobson promised that if NICE gives a drug the okay, it will be funded.

In the Lords, Baroness Hayman said that anti-psychotic drugs were not the only options for interventions.

But she did concede that, in their potential for saving admissions, 'they may prove very cost-effective'. In that I hear the reassuring sound of cash registers. Positively seasonal.