Armed forces personnel and veterans who need mental healthcare are being “completely failed by the system” in some cases, according to MPs.

The Commons defence select committee said in a report published on Monday it was a scandal that, from an NHS budget of more than £150bn, less than £10m a year had been allocated to mental health services for veterans.

The report said the NHS should urgently consult the Ministry of Defence and the Defence and National Rehabilitation Centre to establish a world-class centre for treating psychological injuries within 18 months.

The report, Mental Health and the Armed Forces, Part Two: The Provision of Care, welcomed efforts to improve care, but added: “There is no doubt that some serving personnel, veterans and their families who need mental healthcare are still being completely failed by the system.

“With specific mental healthcare provision for armed forces families also non-existent, it is no surprise that many veterans and their families believe they have been abandoned.”

Ruth Smeeth, a Labour member on the committee, said: “It is unacceptable that veterans and their families should feel abandoned by the state.”

Dr Chaand Nagpaul, the British Medical Association council chair, said: “It can’t be right that men and women who have put their lives on the line to defend their country are having to wait a year for treatment when they are at their most vulnerable.”

A government spokeswoman said: “NHS England is committed to providing mental healthcare around the country so anyone in need of treatment can access help as close to home as possible. This includes bespoke services for veterans, which have been supported by an extra £10m as part of the NHS long-term plan.

“At the same time, the Ministry of Defence has increased spending on mental health support for those serving in the armed forces to £22m a year, and is working to tackle the stigma around asking for help throughout the military community.”