Mental health services must renew their efforts to improve community care, the mental health tsar says.
Most mental health treatment takes place out of hospitals
Professor Louis Appleby has called on NHS trusts to look at new ways of working to help people rebuild lives.
He said they should look to work more closely with employment and housing agencies and cut waiting lists for talking therapies in England.
Campaigners said there was a lot of work to do to ensure services were good enough for patients.
In the last eight years, there has been a big push to move care out of hospitals and into the community.
There are now more than 700 community teams, including nurses, doctors and social workers, providing a range of crisis help and early intervention.
However, the Healthcare Commission last year criticised services, pointing to gaps in out-of-hours care, talking therapies and access to information.
Nearly half of services were rated as fair or weak.
Professor Appleby said the report was about the next phase of reform of mental health care.
He told BBC News: "We've had several years of strengthening what community services do, and the report is about breaking down the barriers in the next stage of reforms.
"I'm talking about barriers that get in the way of better patients' experience of care
"At the moment, for example, there is a barrier between what health services traditionally do, which is clinical care, improving people's illnesses, abolishing their symptoms.
"But what patients often tell us they want is help with quality of life. They want opportunities for training, for jobs, and for decent housing, and we have to take on that responsibility."
His report called on the 60 mental heath trusts to consult with their local populations about what they needed.
The report said mental health trusts should look at ways they could link up with agencies responsible for housing and employment.
It also called for community teams to get involved in giving people more advice on how to reduce alcohol and drug use and look after their physical health.
He also called for a renewed effort to reduce waiting lists for talking therapies such as cognitive behavioural therapy, which sometimes has waits of over 12 months.
The NHS is currently rolling out a programme of providing people with access to computerised CBT and the government has set up 10 pilots to explore ways of speeding up access to talking therapies.
Marjorie Wallace, chief executive of the mental health charity Sane, said extra investment was needed.
"We are all too aware that with units and day centres closing and community services cut, the more seriously ill are still being neglected and put at risk.
"The government goes forward with its policy of reform and choice, but there are thousands who have no choice of where to go in crisis and little chance of rehabilitation or safe, consistent care, both in or out of hospital."