When Steve Cowburn and his wife, Sharon, opened the door of their Cornish home at 4am to two police officers, they knew the worst had happened.

Their 18-year-old son, Ben, had been suffering from a severe mental illness for three months and had already made a number of attempts on his life. The police confirmed their fears that Ben had killed himself at the local adult psychiatric unit, the latest victim of a crisis in the way young people with mental health problems are cared for.

"It is so difficult to believe this happened to Ben,"said Steve, a management consultant from Truro. "He was the last person in a class of 30 you would have thought was depressed … he was the life and soul of the party, he was captain of the rugby team … he was a doer."

Ben, who had only recently turned 18, was being cared for in an adult psychiatric unit because in Cornwall, like several other areas, there is no specialist provision for children or adolescents. "This type of care for someone like Ben was totally inappropriate," said Steve. "I remember him saying to me: 'the trouble with this place, Dad, is everybody is your age and everybody's mad'… he did not think of himself as mad; he thought of himself as ill."

Ben's condition deteriorated as he struggled with his illness and life on the unit, where Steve said some patients were delusional and intimidating. After three months he took his own life. "The care for adolescents not just here but around the country is totally inappropriate," said Steve, who has founded a charity, Invictus, which is campaigning for a specialist adolescent unit in Cornwall. "Adolescents are totally different … I am not saying Ben would still be with us now if he had proper care, but you would have given him another chance, another opportunity to get better."

Ben Cowburn.

Across the country children with serious mental health problems face a similar battle to get the care they need as NHS and local authority budgets for mental health provision shrink, specialist centres close and families must choose between sending their children hundreds of miles for help – or trying to care for them themselves. Last month a highly critical inquiry by NHS England found too many children were having to travel long distances to access inpatient beds, while cuts to early intervention projects meant more young people with less severe problems were not getting help, often meaning their illness became more severe.

This bleak picture fits with a survey from children's mental health charity Young Minds, which found two-thirds of councils in England had cut child and adolescent mental health services [Camhs] budget since 2010. When the charity asked NHS trusts and councils about other mental health spending on children and young people, such as youth counselling or specific services for schools, more than half had cut budgets – by as much as 30%. "What we have is a complete mess," said Sarah Brennan, chief executive of Young Minds. "Care for some of the most vulnerable children and young people is too often determined by sheer luck rather than any joined-up plan."

Although the data is patchy at best it appears these cuts have coincided with deteriorating mental health among young people. In 2004, the last year that government statistics were centrally collected, 1.3 million children were deemed to have a diagnosable mental illness. All the signs are this has got worse in the past 10 years.

This year Public Health England submitted a report to a select committee inquiry into young people's mental health. It pointed to a steep rise in self harm, with Childline reporting a 41% increase in 2013 and a 33% rise in the number of children reporting suicidal thoughts in one year.

And as the economic slump continues to hit the young particularly hard, the report notes that over 750,000 children and teenagers believe they have nothing to live for, with jobless youngsters particularly at risk of poor mental health. It concludes that 30% of English adolescents have sub-clinical mental health problems.

Against this backdrop of growing need and shrinking support it is often schools that are left to pick up the pieces. "We are seeing more children with mental health problems than we were five years ago," one teacher of 30 years' standing said. The woman, who teaches at a secondary school outside London, blamed the rise partly on the intensive target culture of exams and Ofsted, and partly on the fact that support services were no longer there. "A lot of the support that would have been provided by Camhs or other outside bodies in our school is now being done by teachers. Colleagues at my school are doing things in terms of supporting pupils that would certainly have been done by outside bodies in the past."

Despite the best efforts of schools and health workers, experts say more and more young people are inevitably falling through the gaps.

Sarah, now 14, fell ill during the summer holidays before starting secondary school. She was sent to a young people's psychiatric unit in her home town of Hull where she was diagnosed with Asperger's and, with inpatient care, made steady progress. After a few months she began a gradual return to mainstream school. "It was more like a therapeutic unit," said her mother, Heather. "It was lovely and it was nearby so I could visit her every day."

After three months Sarah had a relapse, but by then the unit had been shut. "She needed inpatient care again but by this time there was nothing for her. I had to keep her sedated at home as they tried to find a bed somewhere … this went on for about three days and all the time she was getting more and more poorly."

She was sent to a unit in Leeds became increasingly homesick and began self harming.

"I couldn't help her like I could when she was in Hull," said Heather, a staff nurse. "I just couldn't get there everyday as I'm a single mum and have another child and a job that I can not afford to lose."

Over the next two years Sarah was moved to units around the country – most more than 100 miles from home. Heather lost her home and her car as she struggled to look after Sarah and her brother and keep her job.

Sarah's self harming got worse, exacerbated by chronic homesickness and the suicide of her father. She is now being looked after in Liverpool.

"She is still very very homesick but there is nothing in Hull for her," said Heather. "She phones me every day crying saying she misses her brother… If there was proper psychiatric care and treatment in Hull she would have been here and I could see her every day and that would have given her a chance … It is probably too late for Sarah because she is now a very damaged little girl but I know that if we can get something for young people like her it will stop any other family going through what we have gone through because it is horrendous."

For those working at the sharp end of mental health care for young people such stories are all too familiar.

Brennan said it was time the country woke up to the scale of the problem. "It is a national disgrace that while three children in every classroom have a diagnosable mental illness, only 6% of the NHS mental health budget is spent on children and young people. There is overwhelming evidence to suggest that if we get it right for children and young people we will greatly reduce the burden of mental health for future generations."

The names of Sarah and Heather have been changed at their request.