The DH has launched a task force to improve the way that children's mental health services are commissioned.
The announcement comes as health and social care minister Norman Lamb has said that children's mental health services are 'not fit for purpose.'
Speaking to the BBC, he said that they were 'stuck in the dark ages' and needed to be modernised.
'This taskforce will look at how we can make sure every child with mental health problems gets the high quality support they need and engages with them directly to ensure their voice is heard,' he added.
The Local Government Association (LGA) has released a statement saying that a full reform of the mental health system is required. Long waiting times in the NHS mean that councils are using stretched budgets to pay for services for young people, it said.
Cllr David Simmonds, chairman of the LGA's children and young people board, said: 'Local authorities still have serious concerns about mental health funding for children and want a complete overhaul of the fragmented and complex system that they currently face each day when trying to access services delivered by the NHS and other partners. Councils have worked hard to protect the many services they provide for vulnerable children but in the face of 40 per cent cuts to local government, this has become increasingly challenging.'
The LGA is also calling for better integration of children and adult mental health services so that practitioners and commissioners are able to work more closely together.
Freedom of Information requests by shadow health minister Luciana Berger in July 2014, found that 67 per cent of CCGs that responded spent less than 10 per cent of their overall budget on mental health services.