A third of prisoners deemed so unwell they are referred involuntarily to Western Australia's only secure mental health centre are never admitted and stay in jail instead, a damning report has found.

Key points: The Frankland Centre has not expanded its 30 beds in 25 years

The Frankland Centre has not expanded its 30 beds in 25 years In the same time period, the prison population has tripled

In the same time period, the prison population has tripled The Inspector of Custodial Services has called for more beds and services

Inspector of Custodial Services Neil Morgan, whose report was tabled in State Parliament today, has found "major shortcomings" in mental health services for prisoners.

He said as disturbing as the figures were, true demand was even higher and the lack of mental health beds and services had now reached "alarming levels".

He pointed out the Frankland Centre at Graylands Hospital — the state's only secure forensic mental health facility — was the same size as when it opened in 1993 with 30 beds, and had nowhere near enough capacity to meet demand from prisons and the courts.

The prison population has tripled in the 25 years since the centre opened.

"Psychiatrists who work in prisons are so aware of the shortage of secure mental health beds that they only make referrals in the most urgent of cases," Mr Morgan said.

"These shortfalls mean that the daily management of people with serious mental health needs is left to custodial staff, who have limited training, few management options and poor access to information."

Mr Morgan surmised it amounted to applying a band-aid to a severely under-resourced system and "creates risks for the prisoners and places an unreasonable burden on staff".

Patients not making it to treatment

This report is the first to quantify the gap between prison referrals and actual placements, concluding too many people were forced to stay in "crowded, stressed and counter-therapeutic [prison] conditions" when they should be in a mental health facility.

Mr Morgan cited the Royal Australian and New Zealand College of Psychiatrists, which said: "Prisons are not hospitals and should never be viewed as such".

Inspector Neil Morgan said pyschiatrists working in prisons only made referrals in the most urgent cases. ( ABC News: Briana Shepherd )

As well as the one-third of prisoners involuntarily referred to the Frankland Centre who never got there, the report found 61 per cent per cent of all referrals to a mental health bed lapsed without a hospital placement.

This was in a context where half the 7,000 people in prison in WA had some level of mental health disorder. Of these:

About 10 per cent needed "close mental health support";

About 10 per cent needed "close mental health support"; More than 200 needed or may need treatment in clinical conditions; and

More than 200 needed or may need treatment in clinical conditions; and At least 25 were so unwell they needed intensive or immediate care in a secure mental health bed

More beds, more services needed

Mr Morgan recommended a double-pronged approach with an increase in the number of secure forensic mental health beds and improved mental health services in prisons.

"We must stop placing mentally unwell people in prison, not providing adequate access to treatment, releasing them, and expecting a good outcome," he said.

The Frankland Centre, located at Graylands Hospital, is the same size as when it opened in 1993. ( ABC News )

But he condemned plans for more forensic hospital beds and better mental health services in prisons as "unclear and unfunded".

He said while there was general agreement that a subacute unit was needed at Bandyup Women's Prison, there were different views on where responsibility for funding lies.

In December last year, the McGowan Government announced four new accommodation units would be built at the maximum security men's Casuarina Prison by the end of next year, and some of this would be used to provide targeted mental health services.

"However, the Department of Justice has not yet developed a model for delivering these services, including purpose, scope and staffing arrangements," the report said.

To alleviate pressure on the system as quickly as possible, Mr Morgan recommended lower-risk people should be diverted to other hospitals than the Frankland Centre.

"The additional costs of providing proper mental health treatment are likely to be substantially, or fully, offset by improved mental health, reduced risk to the community and a lower risk of the person returning to prison," he said.

Casuarina facility 'could be in place' by end of 2019

A McGowan Government spokesman said the Department of Justice was considering options for two mental health facilities at Casuarina and Bandyup prisons.

"These options need to be considered by all of government, but if successful, a step-up, step-down facility could be in place by the end of 2019 or early 2020 at Casuarina Prison," he said.

The Mental Health Commission and the Department of Health were also planning an overhaul of services at Graylands Hospital, including the Frankland Centre.

"The consideration of additional secure forensic mental health beds and associated funding will be considered as part of this project," the spokesman said.