This article is more than 5 months old

This article is more than 5 months old

The gambling regulator is to cut staff, the Guardian has learned, prompting dismay among campaigners after a report that found it was already too weak.

The Gambling Commission’s 332 full-time staff have been told it plans to reduce headcount as part of a broader structural reorganisation.

The commission declined to comment on staff numbers, confirming only that it was talking to employees “about some changes we are considering” as part of a plan to be more agile in its approach.

But a source with knowledge of the situation said the decision was due to strains on its £19m annual budget, deemed inadequate by the National Audit Office (NAO) in a report published in February.

Gambling addiction experts and MPs reacted with astonishment to staff reductions, given the NAO’s concern that the regulator is not powerful enough to ensure addicts and vulnerable people are properly protected.

Matt Gaskell, the clinical lead for the NHS northern gambling clinics, said: “It further underscores the need for the government to step forward and take definitive legislative action and to strengthen, not weaken, the regulatory framework.”

The NAO, which monitors the effectiveness of public bodies, said in its report that the commission had not adjusted to technological change such as the rise of online and mobile gaming.

It warned funding constraints were hampering the commission, whose annual budget is revised every three years by the Department for Digital, Culture, Media and Sport. It regulates an industry that took £11.3bn from punters last year.

The regulator has issued two record fines in the past month, worth a combined £25m, amid increased scrutiny of its role.

The Guardian understands that changes at the commission are being billed as an attempt to free up funds for the most crucial activities.

But MPs said there was little chance of the regulator improving while also cutting staff.

The Labour MP Carolyn Harris, who chairs a cross-party group of MPs investigating gambling harm, said: “Given the abysmal service provided by the commission against a continued onslaught of reprehensible practice among gambling companies, and a woeful report from the NAO, I had expected the Gambling Commission to be beefing up their service in an attempt to justify their existence.

“If they are scaling back it must be assumed they have given up and will be declaring themselves unfit for purpose.”

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Iain Duncan Smith, a vice-chair of the group of MPs, said: “If nothing else tells you that the government needs to overhaul the Gambling Commission to give it more teeth, this decision makes it absolutely clear that must be done now.”

A commission spokesperson said: “The pace of change and the complexity of the issues we have to manage are increasing and that means we have to constantly look for ways to be more agile and responsive as new risks or opportunities emerge.

“We will shortly publish our business plan for the next 12 months. Alongside the development of that plan, we have been talking to colleagues about some changes we are considering to meet the challenges ahead, which may affect the way we work and how we organise ourselves in some areas.”