One of the country’s largest digital forensics laboratories has been stripped of its accreditation after a former employee reported concerns about the handling of evidence at the business.

It was found that the company, Sytech, had inadequate vetting procedures for new staff and police exhibits were being transported in private vehicles at a recent inspection.

The Guardian has heard of further concerns from former staff who said that broken phones had been unsealed from evidence bags and sent to a consumer repair shop called Fone Fun Shop. On other occasions phones were sent abroad to be decrypted without the knowledge of the police, a former staff member said.

Sytech, based in Stoke-on-Trent, holds major contracts with more than a dozen police forces, and during a period when police spending on forensics science has fallen precipitously, it is one of the few companies to have expanded. However, concerns have been raised about the chain of custody of evidence entrusted to the company and the case raises broader questions about the outsourcing of forensic work to private labs.

One former employee, who wished to remain anonymous, recalled being directly aware of a phone being sent to Fone Fun Shop in Sheffield for repair on one occasion last year. The analyst said they had the impression that at the time the practice was “routine” when data needed to be extracted from phones with cracked screens or defective power sockets. They said they reported this and concerns about the vetting of staff and transport of exhibits to the Forensic Science Regulator last month.

“What made me report them to the forensic services regulator was because I couldn’t get it out of my head [that] any doubt in a case can get a case overturned or thrown out or even an appeal on a previous conviction,” the former Sytech analyst said.

When asked whether phones had been sent to the repair shop, Sytech said in an email: “We have carried out all mobile phone repairs in-house for over 12 months.”

The company said it was not aware of any cases in which the failure to maintain a chain of custody could risk undermining criminal evidence.

A second former employee, who also did not wish to be named, said a police force, understood to be Greater Manchester police, raised concerns with Sytech last year after learning that phones had been sent abroad to be unlocked by the Israeli-founded, Japanese-owned company Cellebrite.

When asked to confirm this, Emily Burton, the head of forensic services at Greater Manchester police, said: “In October 2018, we became aware of potential issues with the data extraction service provided to us by an external digital forensics company. When this potential issue became apparent, we raised this with the national policing leads for forensics, immediately reviewed current investigations and made alternate arrangements for our data extraction needs whilst the matter was resolved.”

Currently no investigations had been significantly affected, Burton said.

In an email, Sytech said the findings of the recent inspection by the UK Accreditation Service (UKAS) “make no reference to our handling of phones requiring pin-decryption”. Currently phones were not sent abroad, the company said, adding that all exhibits sent to external labs for unlocking were transported by a driver with police security clearance in a secure van.

Gillian Tully, the government’s forensic science regulator, declined to comment on specific concerns about Sytech. In general, she said, establishing a continuous chain of custody for evidence was a cornerstone of forensic science. “All organisations engaged in work for the criminal justice system should be well aware of those requirements and of adhering to them,” she said. “If the continuity can’t be established … it could compromise cases.”

Tully said it would be of concern if private labs were subcontracting “outside of the quality chain”.

Nick Baker, the national police lead on digital forensics and deputy chief constable of Staffordshire police, said his force had placed outsourcing to Sytech temporarily on hold while a risk assessment was carried out. “We’re going through a process of understanding what the issues are and understanding what our own exposure and risk is and obviously [we’ll] make a decision based on that,” he said.

If forces decided to stop using Sytech for a longer period, Baker said, this could exacerbate an already substantial backlog of phones and computers that need analysing, potentially delaying cases coming to trial. This week, the Home Office contacted alternative private providers to ask whether they would have the capacity to take on extra cases if required.

Sytech said it had made police aware of its loss of accreditation “fully and frankly”.

It said the company completed “internal authentication of staff” and arranged for the police online application to be completed immediately when staff joined the company. “All new employees go through a period of training and strict supervision during their probationary period,” Sytech said.

In response to the UKAS findings Sytech said it had ceased using privately owned vehicles for the transport of exhibits.