It's kind of like providing a highly expensive, and logistically complex service requiring recruitment and retention of highly skilled professionals to provide an essential service to people who can't possibly pay for it is not suited to privatization.
20/20 hindsight I guess :/
Escalating conflict with someone with delusions of persecution is exactly the wrong thing to do.
Not knowing the system in the UK means I can't give very good specific advice. You may be able to contact a local mental health network and there is a good chance they will know him. Let them know what is going on in as much detail as possible and suggest that he is increasingly agitated and alienating himself from the community. It sounds like this gentleman needs a conpulsory treatment order or whatever the UK equivalent is.