For a lot of people support to get back to work in some capacity would benefit their mental health and consigning people with mental illness to a life on benefits is not in fact kind or helpful to them.
The waiting list for an initial assessment in our area is 6-8 weeks not many months or years. The waiting list for CBT is then a further 2-3 months. Decent basic treatment for anxiety and depression is available fairly quickly as is treatment for serious mental illness eg schizophrenia, bipolar, severe OCD. Yes it will be basic CBT because the NHS can't possibly afford for everyone who wants it to see a very highly qualified clinical psychologist 1:1 and for most conditions CBT is effective.
Avoidance is a powerful maintaining factor in anxiety and depression and for many people getting back to work is in itself positive for their mental health and a good treatment. Behavioural activation and graded exposure are very good treatments for mood disorders. Getting entrenched in never going out, seeing anyone or doing anything and often using drugs and alcohol makes it really hard for any medication or therapy to work.
Where it gets tricky is
ASD/ ADHD- these are not mental illnesses they are neurodevelopmental disorders. There is not a functioning system for diagnosis or treatment of adults. There never has been but now there is a demand that has no hope of ever being met on current resources. In the case of ASD having a diagnosis would not open up any further avenue of treatment in any case. Here it's going to be about reasonable adjustments to be able to work.
Trauma- especially of a complex nature and personality disorder. These don't respond well to medication and need specialist long term therapy which the NHS cannot afford. Waiting lists can be very long for this kind of treatment and it often isn't fully effective. Maybe we need to resurrect SureStart and invest more in children's social care so that there are less people suffering the lifelong effects of childhood neglect and abuse.
For some MH conditions they will need to be managed as a long term disability with reasonable adjustments to allow people to work but in most cases (or certainly many more than currently) it would be possible and beneficial for people to work.
Mental health services do not have the answer in isolation to many of the complex multifaceted problems that are bundled up as 'mental health' nowadays. We know what to do with schizophrenia but some of the other stuff we are going to need education, social care, criminal justice, housing etc etc to all work together to find solutions. I am beyond sick of being asked to solve issues of poverty and social deprivation armed with only a packet of pills and a sympathetic head tilt.