The electronic tagging system that will be relied upon to monitor thousands of offenders released early from prison is failing to alert the authorities of potential breaches of conditions, a watchdog has warned.

Martin Jones, HM inspector of probation in England and Wales, said the system relied on hard-pressed police and probation officers looking up individual cases and then deciding whether potential breaches needed to be investigated further.

He said it needed to be updated to send alerts to the authorities if a former inmate breached an exclusion zone from which they were banned.

His demand comes after the government announced that up to 5,000 prisoners would be released from 1 October to ease the prison overcrowding crisis. At present, there are 86,500 people behind bars with 2,400 spare places.

Andy Burnham paused the scheme last month and on Tuesday he announced plans to exclude prisoners guilty of rape, serious child sexual abuse offences and grooming, reducing the number of releases by 1,000. Killers and domestic abusers will still be eligible for early release, the Ministry of Justice has confirmed.

The prime minister has assured the public that offenders will face tighter community supervision, including new GPS monitoring.

Jones, in an interview with the Guardian, said he had recently launched an inspection of offender tagging, and had seen that the system was coming under strain and needed to be upgraded to “minimise the risk to the public”.

“Some of the systems are pretty clunky and it’s far too reliant on people looking for the information rather than the information being fed or pushed to practitioners as a matter of course,” he said.

“Tagging has potential to improve public perception of victims’ safety. But only if it used properly and if there is a wider system and enough staff to support that. If not, there is a risk that you give false assurances to the public.”

The number of people in England and Wales being electronically monitored has doubled to 28,700 in five years, and the number of newly tagged each year is expected to rise to 22,000 from 2027. Jones said this expansion needed a huge increase in staff to monitor offenders.

An early review of Jones’s inspection, across six regions in England, found:

Jones said: “My concern is this: have the processes and the system kept apace with the number of people being tagged? Because ultimately all tagging gives you is information about where somebody is at a particular point in time. You are relying on having sufficient police officers and probation officers to look at that information and make a decision about how it informs your picture on the activities of that individual.”

Last month the National Audit Office found that the rapid expansion of electronic tagging to reduce pressure on prisons would put public safety at risk unless there were robust improvements.

Jones also called for the government to ensure that there were enough staff in approved premises, which are hostels set up to monitor 2,000 of the most serious offenders when they are first released from prison.

“Our research shows that approved premises work. [They] are extremely effective at managing people after their initial release from custody. What a missed opportunity if those premises cannot remain open because of our insufficient staff,” he said.

After a review of the plans, rapists and serious child sexual offenders, including grooming gang perpetrators, will no longer be eligible for the early release scheme. But those given custodial sentences for domestic abuse, and criminals guilty of manslaughter, will still be eligible to be freed halfway through their sentence.

Alex Norris, the justice secretary, has apologised to families affected, saying they were “carrying the can from previous failures”. He acknowledged the proposals had “created harm” for those grieving, such as the wife of PC Andrew Harper, Lissie.

“I would express how angry I am, too, at being in a situation where we’re having to make significant changes that do have real impacts on people’s lives, so that we are able to have a functioning prison system,” he said.

Harper’s mother, Debbie Adlam, said her family was “paying the price” after learning her son’s killers remained eligible for early release under the plans.

Sarah Champion, the Labour MP for Rotherham, has written to Burnham, telling him that victims would “remain in a state of fear and limbo” unless domestic abusers were no longer included in the early release scheme.

She told the prime minister: “I fully support the government’s ambitious goal to reduce violence against women and girls and tackle serious sexual offences. However, without reinstating the exemption to the early release scheme, I fail to see how that is possible.”