A group of MPs and Peers have published a scathing report on the UK’s main financial regulator, the Financial Conduct Authority (FCA).

Describing it as “incompetent”, they say the FCA is “too often failing” to perform its functions and are calling for it to be overhauled.

The regulator has been heavily criticised by several independent reviews in recent years.

The FCA did not see the full report ahead of publication but a spokesperson told the Financial Times: “We sympathise with those who have lost out as a result of wrongdoing in financial services, however we strongly reject the characterisation of the organisation.”

“We have learned from historic issues and transformed as an organisation so we can deliver for consumers, the market and the wider economy,” it added.

The report, due to be presented in Parliament later on Tuesday, was put together by a cross-party interest group and is based on written testimony from 175 respondents collected over two and a half years.

They included whistleblowers, victims of scams and current and former employees of the regulator.

The report concluded the FCA was “incompetent at best, dishonest at worst”, that its actions were “slow and inadequate” and that its leaders were “opaque and unaccountable”.

It said the FCA had failed to properly investigate and act on information provided by whistleblowers and it said a transformation programme undertaken by the regulator had “not worked”.

The report was carried out by the All-Party Parliamentary Group on Investment Fraud and Fairer Financial Services, made up of 30 MPs and 14 members of the House of Lords.

Current and former FCA staff said the regulator had a “defective culture” in which “errors and inaction” were “too common”.

A former FCA employee told the parliamentary group they had experienced “the worst staff culture I have ever experienced in nearly 40 years”.

One current FCA staff member said they had tried to raise “serious and challenging questions” but they were “criticised, bullied and sidelined”.

Those who challenged a top-down “official line” on any given issue were “bullied and discriminated against, or even managed out”, said some current and former employees.

The suggested reforms – some of which will require legislation – include:

• Introducing a no tolerance policy for a lack of integrity

• Establishing a supervisory council to review the FCA’s effectiveness

• Changing how the FCA is funded

• Overhauling the way the FCA’s senior leadership team is appointed.

The report comes after a series of scandals in which financial services firms have been accused of mistreating consumers and small businesses, and the FCA has been “blamed for doing too little too late – or nothing” to prevent wrongdoing, said Bob Blackman, co-chair of the group.