Conditions inside Mosul, the largest city under Islamic State (Isis) control, have dramatically deteriorated, residents say, with severe shortages of food and water, no functioning public institutions, and the local economy in a state of near collapse.

In a series of interviews, locals in the Iraqi city paint a bleak picture of life under Isis rule. They say that discontent with the militants who swept into Iraq’s second city nearly five months ago is growing. Most public institutions have stopped working and provide no services. Almost all private sector activity and government-funded construction projects have been put on hold. Thousands of workers have been rendered jobless.

In recent months Isis has staged a series of spectacular military advances, seizing large swaths of territory in Iraq and Syria, over-running much of the western Iraqi province of Anbar and besieging the Syrian Kurdish town of Kobani. But the organisation – which proclaimed itself a caliphate over the summer – has made strenuous efforts to demonstrate that it can also govern.

In its latest glossy newsletter, Isis acknowledges that a “state cannot be established” unless it looks after both the “worldly and the religious needs” of Muslims, and the group says that it cares for civilians in areas under its control. Its English-language magazine “Dabiq” includes photographs of an Isis-run home for the elderly, street cleaners, and a doctor treating a young child at a cancer clinic.

Iraqis who fled Mosul and other towns take shelter in Sadr City, Baghdad. Photograph: Karim Kadim/AP

Residents in Mosul, however, say that the reality is a far cry from Isis propaganda. They say that the local population is ill-equipped for the coming winter. Many have spent their savings and now have no income. The price of basic goods has gone up sharply. Rubbish lies uncollected in the streets.

Ziad, a 34-year-old construction worker, says he spends most of his time at home, worrying about the future of his family. “There is no work. Whatever job is available, the employers pay very little,” he tells the Guardian.

The price of kerosene for cooking has more than trebled since June, from 95,000 Iraqi dinars (£51) per barrel before the crisis to 300,000 dinars (£160) now. Inflation has got worse since Kurdish forces recaptured the Rabia border crossing between Iraq and Syria – a key supply route for Isis. “Since Isis lost control of Rabia and as winter is approaching, I expect the price of kerosene will jump even further,” says Subhi, a 48-year-old vendor in the city. When Isis was in charge of Rabia, the price of a kilo of tomatoes was 250 dinars. Two weeks on, the price has already increased to 1,500 dinar.

“We get two hours of electricity every four days and sometimes only that amount every week,” says 49-year-old Khaleda, a government employee. Khaleda says there are private generators that could provide additional electricity, but since there are no jobs in the city, people have no money to pay their electricity bills and for other services. In the past, central government provided rations – a legacy of sanctions against Saddam Hussein’s Iraq in the 1990s – including sugar, rice, cooking oil and flour. The rations stopped when Mosul fell to Isis, and the Islamists have not been able to provide an alternative.

Children are suffering as well. For many students in Mosul, life under Isis has meant they have been unable to take final exams this year. Some families have made the dangerous journey across the frontline to Iraqi Kurdistan so their children can take their exams and not miss an entire year of education. Data from the ministry of education shows that hardly any students have been able to take exams in Mosul. In Banin secondary school for girls, only 13 students out of 118 sat their final exams, and just three were able to pass their tests.

When Isis seized Mosul over the summer, many Sunnis – who had borne the brunt of former prime minister Nouri al-Maliki’s sectarian policies – were happy to see the back of the Iraqi army and police, mostly Shia forces which had antagonised the population of a predominantly Sunni city. Many locals have now come to the conclusion that Isis rule is no better, if not worse, than what they endured before.

Dara left Mosul two months ago and now lives in Sulaymaniyah in the Kurdish region. He is in regular contact with friends and relatives in Mosul, and says: “People have become very poor and so desperate that they are happy for anyone to come and get rid of Isis and liberate them. They even say they prefer the hated Iraqi army.”

In recent months, an atmosphere of repression and intimidation has grown, locals say. Isis has forced Christians and other minorities to leave the city. It has carried out public beheadings and shootings of individuals it considers a threat, including doctors, parliamentarians and ordinary citizens. Earlier this month, the group executed a Kurdish journalist, Muhannad al-Ugaili. In September, Isis fighters killed a prominent woman lawyer, Sameera Salih Ali al-Nuaimy, who had posted comments on her Facebook page decrying the “barbaric” bombing by Isis of mosques and shines. A court convicted her of “apostasy” and she was shot by masked gunmen.

Iraqi boys at a school being used to shelter families who fled from Mosul. Photograph: Thaier al-Sudani/Reuters

The group takes a more nuanced approach with some community leaders and influential figures. When Isis first seized Mosul, it appointed its own imams to a majority of the city’s mosques. Its leader Abu Bakr al-Baghdadi proclaimed a caliphate in late June; Isis fighters then tried to force the remaining Imams in Mosul to pledge allegiance to al-Baghdadi, their new caliph. One preacher in a mosque in the south of the city refused. He argued that one interpretation of Sunni Islam should not prevail over others.

The militants realised that they could not kill the preacher and 33 others who refused to swear allegiance: they had a large following. Soon afterwards, the imams were barred from preaching. At least six of them were detained. The most prominent preacher is under house arrest. Hundreds of worshippers continue to turn up at the preacher’s Qabaa mosque, however, with crowds spilling out on the side streets leading to the building. Worshippers know only that their imam refused to give pledge of allegiance to Isis. It is a significant act of defiance that undermines Isis credibility in the eyes of the Sunni residents of Mosul.

As well as growing civil disobedience, Isis faces a military threat from US air strikes. Over the summer Iraqi jets bombed the group’s military positions, with many fighters taking refuge in residential areas. The Iraqi raids have stopped, with US and allied warplanes taking over instead. US drones hover continuously in the sky. Residents say the strikes are now a daily feature of life, but add that most taking place outside Mosul and in the surrounding countryside.

Locals described an attack on an Isis compound in the Bab Nargal neighbourhood, near Mosul university. About seven missiles were used, locals say. Another blast occurred near Ibn Atheer hospital in the Nergal neighbourhood. “We heard a big explosion first followed by several small explosions,” Mohammad, a 44-year-old teacher tells the Guardian. Amer, 53, a sales clerk, adds: “I heard the sirens of the ambulances rushing to the scene. The bombs hit a government building which was taken by Isis. It is difficult to know what the damage was because Isis blocked off access to the area.”

Isis has responded by reducing its checkpoints and removing its black flags from buildings. Small numbers of Isis militants can be seen in the city but they avoid congregating together. There are checkpoints at night but these are mobile and are removed after just a few hours, residents suggest.

Mohammad Moslawi is the pseudonym of an Iraqi reporter in Mosul