REDUCING the number of public sector workers is unlikely to secure the savings needed to balance the books, with more cuts coming down the line, says Scotland's public spending watchdog.

Audit Scotland says that even though the public sector has reduced its staff budget by about £1billion between 2009-2012, new approaches to delivering core frontline services are what is required to achieve the savings in the future.

The planned merger of social work services and primary health care across Scotland is cited as one key example of new ways of working.

Unions and professional bodies have welcomed the report, claiming cuts to staff is counter productive in the medium to longer term.

The report, Scotland's Public Sector Workforce, says in the four years to March 2013 the number of whole time equivalent posts in councils, the NHS, the Scottish Government and other central government bodies was reduced by 26,600. Almost 16,000 were due to early departures and just under 10,000 were transferred to arm's length organisations (ALEOs) or other non-public sector bodies.

In 2011/12 staff costs were about £12.7bn, while ALEOs workers are still paid indirectly through public funds.

Councils made the biggest reduction in staff, with a cut of about 10%, while the NHS made the smallest reduction, with its workforce decreasing 1%.

However, while 50 public bodies are planning to use early departure schemes over the next two years, the report found repeated schemes are attracting fewer applicants each time.

Other measures, including pay restraint, redeploying staff and changing working patterns to manage staff numbers and costs, are also unlikely to deliver the savings needed in the future amid continuing financial pressures.

The report instead recommends the need to consider other ways of delivering services such as wholesale redesigns and more joint and collaborative working, on top of workforce planning.

Audit Scotland, which carried out the study on behalf of the Accounts Commission, also said it was difficult to get reliable information on staff costs.

John Baillie, chairman of the Accounts Commission, said: "Public bodies are already beginning to work together to share resources and find different ways to deliver services, but with finances set to be under pressure for the foreseeable future they need to come up with new ways to do this."

Caroline Gardner, the Auditor General for Scotland, said: "While it is difficult to get reliable information, we estimate staff costs in the public sector have reduced by about £1bn in the three years up to 2011/12.

"One of our recommendations is that the Scottish Government and the Convention Of Scottish Local Authorities (Cosla) work with public bodies to help them improve the data they collect on staff costs."

Theresa Fyffe, Scotland director of the Royal College Of Nursing, said: "This report clearly shows public bodies, including the NHS, need to go beyond focusing on reducing the workforce and prioritise and redesign services and, in particular, increase joint working and collaboration.

"The 'boom and bust' approach to the workforce makes no sense. Why cut staff, many of whom had a lot of experience to offer our health service, only to then have to pay out to recruit more staff when services come under huge pressure due to staff shortages?"

Billy Hendry, spokesman on personnel matters for Cosla, said: "Planning now for the local government of the future in terms of right people, right place, right time and at the right cost is a key activity for personnel professionals in all councils. We will consider carefully the recommendations and act on these where we feel they add value to our existing work in this area."