Museum leaders and heritage organisations have condemned a cost-cutting proposal to scrap all four of the curators at Leicester’s museums as concerns grow about the cultural impact of austerity.

Specialist staff at Leicester’s flagship New Walk museum and art gallery have already been handed redundancy notices as part of a review that ends this month.

The museum holds an internationally significant geological collection that includes the Rutland dinosaur, and an art collection boosted by 76 Picasso ceramics bequeathed by Richard Attenborough.

Under the review the museum curators will be replaced by a cheaper “audience development and engagement team”. The move was prompted by £320,000 cut in Leicester city council’s arts budget in the next financial year.

Tristram Hunt, a former Labour MP who is now director of the V&A museum, said the decision was shocking:

Matthew Parkes, the chair of the Geological Curators’ Group, said Leicester’s cuts were a stark example of similar moves at other regional museums. “We keep coming up against reorganisations and redundancies happening in museums and it always seems to be at the expense of the specialist curators.

“It’s an ongoing problem but this is worse than many. It’s disastrous. To replace the people who actually understand the significance of the collection’s most with non-specialists is a very detrimental step.”

In a statement he said: “The new posts, bringing additional interpretation skills would have been welcome additions to the staff, but are completely unacceptable as replacements for curators.”

Sharon Heal, the director of the Museums Association, said the loss of specialists was the direct result of local authority cuts.

“Over the past five years spending on culture in England and Wales has fallen by over 30% and this has had an impact on museums and the services they can provide,” she said.

The association has championed an initiative aimed at promoting community outreach in museums. Museums Change Lives was cited by Leicester’s head of arts and museums, Joanna Jones, as an inspiration for the review. “We’re looking at the need for service to modernise and be more user-focused,” she told the Museums Association website.

In a statement the council said: “The new structure marks a move away from prioritising resource for subject specialist curation. Instead, the service will focus on new ways to support different perspectives, voices and viewpoints in order to increase the service’s relevance to more diverse audiences and particularly to attract those who are traditionally non-museum-goers.”

Heal said community engagement should not be introduced at the expense of expertise. She said: “It shouldn’t have to be an either/or decision. Museums need both collections knowledge and the skills to engage communities to ensure they are sustainable and relevant going forward.

“The systematic undermining of local authority finances means that the incredible network of local museums and galleries that we have in the UK is at risk. Local government finance needs to be put on a secure footing in order that local services including museums can be delivered.”

Sally Howatt, the chair of the Friends of Leicester and Leicestershire Museums, said she was dismayed that four curators had been made redundant. “It is essential that the core museum service is maintained to its current high standard, and we note that the service will lose many years of significant knowledge and expertise with these current redundancies,” she said in a statement.

“We cannot see how post-holders within a festivals and events team can maintain the current collections to the standard required.”