The public sector frontline workforce should be cut by one million and not protected, a centre-right think-tank has said.

A report from Reform, published today, has criticised Conservative and Labour promises to protect frontline services and argues that the public sector's financial deficit can only be addressed if the public sector employment bill is cut by 15 per cent.

The think-tank's researchers argue that the focus on back office savings will not be sufficient and have argued that cutting the size of the payroll in areas such as the Health Service and the police could save £27bn a year.

Those areas that have seen the biggest increases in employees in recent years, including health, should see the biggest cuts, the report says.

Arguing that the increases in spending and staffing of the last decade have not produced the improvement hoped for, the report's authors claim that fewer frontline workers would produce higher productivity and higher wages for those employees that remained.

They argue that the high turnover of staff means the reductions could be achieved without compulsory redundancies.

More money could be saved on the public sector wage bill if national pay bargaining was abolished, the report argues, pointing out that Southend University Hospital Foundation Trust successfully rejected the NHS 'Agenda for Change' pay agreement and "is one of the best-performing trusts in the country".

Report co-author, and Reform's senior economic researcher Lucy Parsons, said the report's criticisms are levelled at both of the main political parties. "Gordon Brown and David Cameron are wrong to pledge to protect 'frontline services' because frontline workers absorb most of the costs of public services and are the biggest factor in their success or failure," she said.

On the BBC's Daily Politics show yesterday, speaking after the government launched its 'Smarter Government' white paper ahead of the pre-Budget review, Treasury minister Liam Byrne and his Conservative counterpart Philip Hammond both reiterated their parties' intention to protect key public services.

Hammond admitted that "some parts of the front line will suffer", but emphasised that cuts would be limited to areas such as child tax credits, which the Tories intend to stop giving to better-off families. "We will protect crucial frontline services like the NHS, education services, policing," he added.

Reform's report argues that the quality of public services can be maintained if government implements the many reforms that have been discussed but, it argues, not implemented.

Focusing contracts on outcomes rather than inputs, and opening up the public sector to private sector competition, are mentioned in the report.

Reform also argues for improved performance and financial management, and increased power for local managers to make the changes they believe will save money.

"One good manager in a school can be worth ten teaching assistants," the report says. "But, as happens in the private sector, public sector managers must come from the front line, rising through the ranks of the services and developing the knowledge and skills needed to run them," it adds.

The report also recommends further reforms to the civil service such as "ending the job-for-life culture" by introducing fixed term contracts, abandoning centralised recruitment programmes such as the fast stream, and recruiting on a case-by-case basis when there is a need.

The Conservatives' suggestion that ministers have the power of dismissal over permanent secretaries should be extended to the entire chain of command, "so that proper accountability is assured".

Accountability could also be increased by placing public servants more in the public eye. "Permanent secretaries should be encouraged to appear in the media and publicly announce their activities so that it is clear who does what," the report argues.