Re-offending rates among criminals given short jail sentences remain high and public protection work is "weak" despite a probation revolution, watchdogs have warned.
Risks of harm presented by prisoners are not always recognised and victims are not always protected, according to an assessment of a key plank of a shake-up of how offenders are managed.
Campaigners labelled the reforms a "reckless experiment", while the Government insisted public protection is its "top priority".
The overhaul launched in 2014 saw the creation of National Probation Service (NPS) to deal with high-risk offenders, while remaining work was assigned to 21 Community Rehabilitation Companies (CRCs).
Under the Government's Transforming Rehabilitation reforms, all prisoners sentenced to a year or less are now subject to 12 months of supervision on release. The change means an extra 50,000 individuals are supervised - an increase of around 25%.
CRCs are responsible for "through the gate" services, helping inmates to prepare for release and resettle in the community - including finding accommodation, employment or training and managing finances.
A joint report from HM Inspectorate of Probation and HM Inspectorate of Prisons said public protection work around short sentence prisoners is "weak" and warned this is a "systemic problem".
The watchdogs raised concerns that the risk of harm to others from prisoners was not always recognised, which meant victims were not always protected - particularly in cases of domestic abuse.
In one case, a registered sex offender released without any accommodation has since disappeared, according to the report.
The inspectorates said rates of re-offending and recall to prison were high.
A follow-up found that a quarter of the prisoners in the inspection sample had already been recalled to prison in connection with alleged new offences and/or for not keeping appointments under their licences.
The picture was more positive for women, but the report said that many officers "conveyed a lack of hope and an almost fatalistic acceptance of the likelihood of failure".
In other findings the inspectorates, which looked at a sample of 86 cases, said:
:: Not enough assistance was given to prisoners to resolve debts;
:: Too many prisoners were released without any accommodation;
:: Basic custody screenings, completed at the start of sentence by prison staff, drew only upon what the prisoner had said and were a "wholly inadequate" basis for resettlement planning;
:: None of the prisoners in the sample had been helped into employment by through the gate services;
:: CRCs are not sufficiently incentivised under their contract arrangements to give priority to through the gate work.
HM Chief Inspector of Probation Dame Glenys Stacey said: "There were great hopes for Through the Gate and there is still the potential for change that government and others wish to see.
"But turning prisoners' lives around is difficult, and success in individual cases is not guaranteed, even when everything possible is done, particular for those with mental illness or addictions.
"There is far more chance of success if those involved are determined and incentivised to do the best possible job and systems are designed to support them."
Frances Crook, Chief Executive of the Howard League for Penal Reform, said: "Transforming Rehabilitation was supposed to turn lives around, reduce re-offending and make us all safer.
"It is doing precisely the opposite - failing to help people find homes and employment, failing to prevent people committing further offences, and failing by exposing victims of crime to more danger."
Justice Minister Sam Gyimah said:"We are already carrying out a comprehensive review of our probation reforms to improve outcomes for offenders and communities.
"We want to incentivise good resettlement outcomes to cut crime and protect the public.
"Public protection is our top priority and we will not hesitate to take the necessary action to make sure our vital reforms are being delivered to reduce re-offending, cut crime and prevent future victims."