The looming public spending cuts will be more profound than any experienced in modern times, the head of the spending watchdog warned as he labelled political promises to protect schools and hospitals "insane".

Steve Bundred told MPs on the Commons public administration committee that the cuts required to reduce the nation's deficit would be worse than those in the 1970s and 1990s, and urged politicians to "be honest" about their tax and spending plans.

But he maintained that because the cuts followed sustained hikes in spending, billions could be shaved from budgets, and the public sector would still be better funded than it was in 1997.

Bundred, the head of the Audit Commission, said: "There are further efficiencies to be found in the public sector, undoubtedly, but not just in back-office functions. I think it's important in the debate about efficiencies to recognise that there are greater productivity [savings] to be found from the frontline as well as the back offices.

"It seems to me to be absurd to imagine that the only services where no efficiencies can be found are those that have been most generously funded for 10 years. To simply exempt the two most well-funded services from the kind of pain that will be inflicted on everybody else seems to me to be insane."

He went on: "Although it's undoubtedly the case that we are going to experience spending cuts of a kind that haven't been seen probably in the lifetime of anyone working in the public sector, it's also the case that they are going to come after a period of 10 years of sustained growth."

His comments – the strongest warnings the spending watchdog has made to date – came a day after a senior Conservative adviser, the former minister Lord Forsyth, said that David Cameron will have to cut public spending by £75bn a year by the end of the next parliament if he is to avoid destroying the British economy. His comments were seen as an indication of the scale of cuts expected under the Tories, should they win the general election.

Both Labour and the Conservatives are pledging to safeguard spending on frontline health and education services. The Institute for Fiscal Studies has estimated that this would lead to 17% cuts in budgets for all other departments. The first clear sign of the cuts will come from the government in a comprehensive spending review – which sets three-year budgets for departments – but the chancellor has said that will not happen until after the election.

A spokesman for the chief secretary to the Treasury, Liam Byrne, said Labour was clear about its pledge to halve the deficit within four years and that the pre-budget report last year committed extra money to health and education but also demanded efficiency savings. The Tories have said they will act even faster but Bundred said neither party had spelled out how it would achieve savings.

"What politicians aren't saying at the moment is about the judgment they would make about the balance between tax and spending and where the cuts should fall. I would like to see more open discussions and greater clarity of the intentions of all parties," he said.

Bundred was addressing the committee's inquiry into public administration in the fiscal squeeze. He was giving evidence alongside Amyas Morse, head of the National Audit Office, who warned it was highly unlikely that the necessary spending reductions could be achieved without cutting staffing in key public services.

He said: "A significant part of the cost driver in the public sector are people and it is very unlikely that will be excluded from the serious cost reduction."

The committee has received written evidence from Tony Travers, professor of government at the LSE, setting out options for reducing the £178bn deficit, including reduced universal benefits such as child allowance and tax credits and increased charges for public services.