The pace of much-needed change to acute mental health wards needs to speed up, the Mental Health Foundation says, following the release of a damning report on the crisis in acute units.

The report, released yesterday by the Mental Health Commission, said the whole area of acute care needed redesigning, primarily a move towards more community-based care and smaller units with more emphasis on therapy.

Mental Health Commissioner Mary O'Hagan said people who were admitted to hospital-based acute units often found them "frightening, impersonal and untherapeutic".

Many reported over-crowding, physical, verbal or sexual abuse, and neglect.

Most felt the emphasis in acute units was less on therapy than on "containment and medication".

Acute units were not popular places to work, and many DHBs had problems retaining staff.

Mental Health Foundation chief executive Judi Clements said she agreed with the report, which also said health boards were wasting money on large-scale institutions.

"There have been crisis situations in some of our acute wards because of overcrowding, under-staffing, and the people who need help find the wards untherapeutic and unhelpful," Ms Clements said.

"We need to make changes, but it's the pace of change that we need to be concerned about ... things aren't being done as fast as we would like to see."

She said the range of services available in the community needed to be built up, such as crisis houses and home-based treatment, which were more cost-efficient.

"We don't need more acute wards, we need more community-based support, which has proved successful overseas."

However, some acute wards were needed because they were the only option for some people, she said.

"The changes are starting to happen. The Ministry of Health needs to give more practical guidance on how to make changes. We want care that works for people."

National Party associate health spokesman Jonathan Coleman questioned "why millions of dollars specifically ring-fenced for acute mental health services were not spent last year".

"The only conclusion is that management of the sector is sub-standard," he said.

However, ministry mental health director David Chaplow said it was inaccurate to say there was unspent money "sloshing around".

"Some DHBs underspent while others overspent," he said.

Most of the underspending could be attributed to workforce shortages, he said.

Some DHBs had money set aside for new psychiatrists, psychologists and other therapists, "but it takes time to recruit these people, to prise them away from the UK or wherever they are".

It also took time to set up community-based care units, he said.