Budget cuts could “cripple” frontline public services and damage staff health and morale, managers have warned.

A survey of 1,500 managers showed that two-thirds believed their staff were operating at full capacity with little or no room for efficiency savings.

The Institute of Leadership & Management (ILM) said its study revealed “widespread concern” among public sector managers about the effect of centrally imposed budget cuts.

More than two out of three of those questioned said they had suffered budget cuts in the past year and nine out of 10 expected “major” cuts in the next year, hitting jobs and training.

Most of those polled predicted higher workloads, lower morale, increased stress and reduced quality of service if cuts went ahead.

Penny de Valk, chief executive of the ILM, said: “The research dispels many of the myths about the public sector and its managers, including the belief that it has remained untouched by the economic downturn.

“The fallout from the recession has already affected budgets and resourcing levels and will continue to do so, potentially at the expense of crucial public services and staff wellbeing.

“Despite concern about the impact of cuts there are positive signs here. It is heartening to see that public sector managers are up for the challenge that awaits them, and confident they can achieve major savings through greater innovation and more effective performance management.

“Rather than having their budgets salami-sliced from afar, managers need the freedom and support to deliver radical changes to service delivery. The question is whether government, senior management and policy makers will enable them to do so.