Ministers should consider reducing the caseload of the probation service by up to 40,000 offenders if they are to ease the overcrowding crisis in prisons, a watchdog has told the Guardian.

Martin Jones, the chief inspector of probation in England and Wales, said the current model was “not sustainable” and suggested ministers should free up capacity by no longer asking probation officers to monitor people released from prison after short custodial sentences for crimes such as shoplifting.

Days after the justice secretary, Shabana Mahmood, announced plans to release thousands of offenders from September because of a prisons overcrowding crisis, Jones also suggested that youth justice services could take some of the probation service’s workload by monitoring 18- to 21-year-olds released from prison.

About 5,500 offenders on standard determinate sentences are expected to be freed from jails before Christmas after serving 40% of their sentences. Mahmood said on Friday that the Prison Service would have run out of space within weeks without immediate action.

Responsibility for monitoring the newly released offenders on licence will fall upon the probation service, whose measures can include electronic tagging and curfews.

In his first in-depth interview since joining the inspectorate in March, Jones said the government must find a way to lighten the workload of the probation service, which is struggling with an increased volume of cases and inexperienced and overworked staff.

“Let’s not pretend that the probation service can manage nearly a quarter of a million people within its current resourcing envelope. You might have to make some choices in relation to people for whom there might be some benefits, but actually, where do you focus those resources? I don’t think this current model is sustainable,” he said.

The way that offenders are monitored in the community has come under intense scrutiny since the murder of Zara Aleena, a law graduate, in east London in 2022. Her killer, Jordan McSweeney, who had a long history of misogynistic and racially aggravated incidents, should have been seen by probation officers as a high-risk offender and recalled to prison after missing appointments. Instead, he was incorrectly assessed as being of medium risk and remained free to attack Aleena.

That case followed the exposure of failings by the probation service before Damien Bendall murdered three children and his pregnant partner in Derbyshire in 2021.

As part of an overview of the probation system, which manages more than 240,000 offenders a year, Jones said:

• He suspects that each of the probation service’s 12 regions in England and Wales are already struggling to cope with the number of cases.

• Approximately two-thirds of the cases his staff inspect fall short of the standards that have been set to keep the public safe.

• 97% of probation delivery units examined by the watchdog were falling below the standards set for good practice.

• He is drawing up an inspection programme for probation hostels – halfway houses for high-risk offenders – because at present there is no independent oversight of their work.

Jones said there was an urgent need to address the workload, particularly as the government seeks to ask probation officers to take on a new cohort of offenders under the early release scheme.

He argued that people who receive short custodial sentences such as shoplifters, who were brought into the probation system in 2015 by Chris Grayling’s Offender Rehabilitation Act, could be taken back out. Previously, offenders serving a sentence of less than 12 months were released unconditionally after half of their sentence had been served in custody.

“In 2015, people released from short custodial sentences didn’t receive any kind of supervision at all. It seems to me that what they’ve almost done is dragged across these cases and ended up with an inflated caseload that they can’t properly supervise. I think you could deal with those people more effectively by way of community sentences,” he said.

Thousands of cases involving 18- to 21-year-olds that are assessed by the probation service could be moved over to youth justice services, he added.

“Youth justice services is a very stable service. It currently has a cutoff at the age of 18. What if we asked youth justice services to reach out and actually deal with young adults up to the age of 21, and actually supervise them in that way?” Jones said.

He said the early release of prisoners would be a “challenging” task.

The Guardian disclosed on Thursday that the Ministry of Justice (MoJ) cut the length of time that high-risk offenders such as freed rapists and murderers spend under supervision in government-approved hostels.

Until recently, very high-risk offenders in England and Wales could stay for a maximum of 12 weeks in “approved premises” where their behaviour is closely monitored by key workers. This was cut to a maximum of eight weeks by the last government.

Jones said that at present, there was no independent oversight of approved premises. He has discussed with the government plans so that his staff can investigate them in future.

“The case for this is extremely strong. You need to understand not just the numbers that have been released, but how they are then being managed back into the community,” he said.

An MoJ spokesperson said: “The prison system is in crisis, which is putting significant pressure on the whole justice system. We are gripping the situation and supporting our hard-working staff, including recruiting 1,000 more probation officers to deliver robust supervision and protect the public.”