It's not exactly a 10th birthday party but it certainly qualifies as a celebration of a decade of new-found freedoms.

Lennox Castle hospital, a huge institution nestling in isolation under the Campsies, finally closed its doors in 2002 after 60 controversial years.

Hailed in 1936 as a trailblazing facility for people with learning difficulties, it soon attracted controversy over a regime which routinely employed drugs to induce docility and where the 1200 patients often languished behind its walls for years, even decades.

Two weeks ago the funeral took place of one former patient and it emerged that he had been in the hospital for 54 years.

His will be among the memories recalled by a new project launched this Friday. Remembering Lennox Castle is being run jointly by Project Ability, the much respected organisation which operates art classes for adults with varying degrees of learning difficulties, and C Change, which was set up when the facility closed to help the transition back into the community of 40 patients, labelled as having challenging behaviour.

Sam Smith, director of C Change, is clear that many of the hundreds of men, women and even children, who found themselves incarcerated, arrived there for reasons we would now consider trivial, inhuman or downright inappropriate.

"Women would be sent there because they were sexually active and considered a risk to themselves and to a wider community which was still influenced by the eugenics movement," she says. "Or young people with mild learning disabilities who became a bit more difficult in adolescence, as we all do.

"They called it a hospital but it wasn't really that. People's health and wellbeing weren't really managed or supported."

That view is reinforced by the appearance of a male nurse called Colin Sproul in a documentary on Lennox Castle made for the BBC. His interview for the post in 1937 apparently consisted of the chief nurse inquiring about his footballing skills.

The documentary presenter was a man called Howard Mitchell who took the trouble to dig out the files on Lennox Castle. His was hardly a disinterested investigation: he was born in the hospital to a female patient and went on to become a nurse there.

Among other things, his research revealed the practice of people given six-month prison sentences for minor crimes being transferred from Barlinnie to Lennox Castle for no better reason than a lower than average IQ. Their incarceration might then last many years.

"It's utterly unbelievable how many people were kept there who might have led perfectly fulfilled lives in the community," says Elizabeth Gibson, director of Project Ability. "At its peak it was the largest institution of its kind in the UK. People survived by making friends and relationships with other inmates, because many of them had little contact with families or the outside world."

That suited the prevailing ethos of an institution which permitted limited and strictly controlled visiting, in any case, and where would-be runaways were punished by meagre rations, early bed, special white moleskin uniforms and could be deprived of their pay: 10 Woodbine cigarettes.

Only in later years was there much in the way of education and training; most "patients" served as domestics, gardeners and maintenance crew.

Many former inmates have been involved at Project Ability art classes and Ms Gibson notes that they won't always acknowledge to outsiders that they may have known each other for years on the inside.

"It's almost as if there's a special, private language. But we're hoping this project will let them transmit their memories in whatever way and medium with which they feel comfortable. Often you learn how much the little things stripped them of dignity, like one very smartly dressed woman who comes to classes who had to get permission to have her hair cut."

Another woman featured in Mitchell's film recalls having clothes put out for her and others every day, down to the oversized underwear. No matter to whom it had originally belonged.

You might think with the intensity of that institutional experience, the culture shock of moving back into the community would prove too great an ordeal for fragile personalities made more vulnerable by their lack of autonomy.

But both Ms Gibson and Ms Smith insist that the experience has been uniformly positive. "It's truly amazing how people can change in just a matter of weeks," says Ms Smith. "You visit them in their new home just a month after their release and they've changed in every way. They look better physically, they have new things to tell you about. It's as if they've been re-awakened."

"One of the ways you can tell how much they're enjoying their new life is that people who needed three others to support them at first new manage perfectly well with one. And they're known and accepted in their community."

Which, of course, begs the question of why they couldn't have been housed and supported in a community setting long before Lennox Castle ceased to function as a receiving house for people with a wide range of problems, many of which were entirely manageable, many of which were transient and few of which ought to have resulted in being placed in what became, in effect, an exclusion zone.

Remembering Lennox Castle is important not just to acknowledge an anniversary, but lest we forget how recently we failed to deal with learning difficulties in a positive way – which concentrated on maximising potential rather than stifling it.

And it's important not least at a time when the funding supporting people in the community – a vastly more economic proposition than any hospital setting – is under threat from so-called welfare reforms.

As Ms Gibson wryly notes: "You don't want to get to a situation where people think it would be an economy to have two people housed together, then maybe four, then maybe 20. At which stage it's not your home any more - just another institution."