Two years ago Rachel Powell's future looked bleak. She had been in and out of hospital since leaving school at 14. Recurrent bouts of mental illness had left her unable to hold down work for more than a few weeks. She had been diagnosed with depressive disorder and after another breakdown was "stuck in a psychiatric ward with nothing to do but smoke and drink tea."

"My confidence was very, very low," she says. "I felt in a bit of an impossible situation because when I got a job I'd have to leave it."

But that has all changed thanks to the First Step Trust, a charity which runs 15 employment schemes across the UK for about 800 people with severe mental health problems. The aim is to prepare them for paid employment. The charity has contracts with local authorities and NHS trusts providing a range of services, from gardening and catering to recycling and flat renovation.

Ms Powell, now 21, started out doing admin work in the trust's Bexley branch in south-east London and is now section manager, running the office and supporting other participants. She also does a social work access course at Goldsmiths College and hopes to start a degree next September.

"My confidence and self esteem have improved hugely," she says. "I spent months, years, not being able to get out and about. It's given me a reason to get out of bed in the morning. It's given a meaning to life."

Carole Furnivall, a former social worker, helped found the trust 12 years ago and is now its joint chief executive. She felt the aspirations of people with long-term mental health problems were not being catered for.

The trust, she says, helps to give people a structured living, which is focused on work. "It isn't about rehab or therapy. It's about work giving people confidence. Work is what enables most people to stay sane." The trust's projects manage to generate about 20% of the £80,000 to £100,000 it needs each year to stay afloat. Most of the rest comes from NHS trusts and local authorities, although this is increasingly under threat. The charity is developing more lucrative projects, such as a car recycling centre in Salford and a restaurant in Clapham, south London, with the aim of being self sufficient.

The trust tries to make its working environment as similar to that of paid employment as possible. Ms Furnivall says: "Mental health services can make people very inwardly focused, and work is about the opposite, it's about what your employer wants. Our focus is on general employment skills: reliability, concentration, willingness to learn and a decent attitude to colleagues and boss." This is evident at the trust's project in Bexley, run by Warren Cox, a former Co-op store manager. There are firm rules about attendance.

"It's not a drop-in centre," says Mr Cox. "Employers want staff who are reliable and conscientious. If someone calls in and says they don't want to come in we remind them they have a responsibility to customers and their colleagues. If someone turns up late repeatedly we'll send them home for the day; if they continue to turn up late we'll send them home for a week. But the door is always open for them to return."

Over the past 12 years, the First Step Trust has helped 370 people into paid employment. Ms Furnivall says that 10% of people get into work within a year. "That might not seem much but many of those were long-term unemployed. We have people who've been out of work five or six years or more. For them just getting out of bed to get somewhere for 9am is quite daunting."

When Craig Bennett, 27, left psychiatric hospital he was stuck in a rut. "I'd go out once a week to get my benefits, go to McDonald's and the supermarket to get some fags, then go home. The only other time I went out was to see my psychiatrist, and that was only every three months." He had been diagnosed with a psychotic illness coupled with stress.

Since coming to the trust's Bexley project in 2005, Mr Bennett has been gardening, decorating and doing admin work. He is now office manager. "I have experience and transferable skills now. It's given me a second chance."

Ms Powell agrees: "It has been a lifesaver. Without it I would have carried on going in and out of hospital. I have more energy and stamina than ever before. It's impossible to explain how much it has given me. It's made me well, it's kept me well. I'm being discharged from mental health services in January after eight years. I feel very optimistic about the future."

Rachel Powell is a pseudonym.

Factfile

80% of people with serious mental health problems are without jobs

Fewer than 40% of UK employers recruit people with such problems

35% of incapacity benefit claimants have a mental illness