The best I can fathom is that the Government expect local authorities to take up the shortfall in this care. The same authorities who are suffering HUGE cuts in their budgets, front-loaded as well.
Its possible that Dave thinks that his "Big Society" will voluntarily care for these people. There are 150 volunteers in our local mental health trust, for one of the largest towns in the country. If the voluntary sector was capable of taking up this mantle then they would have done. Not to mention many of these services require specialist training or equipment. In a Dave New World volunteers don't NEED money to provide services that cost thousands of pounds, clearly.
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"There is a time when the operation of the machine becomes so odious, makes you so sick at heart,
that you can't take part" [Mario Savo, 1964]