First came 'easyCouncil', a plan by Barnet, in north London, to model local authority services on the no-frills approach of budget airlines. Now Suffolk county council is taking an even more radical approach to public sector reform by proposing a "virtual" authority that outsources all but a handful of its services.

The Tory-controlled county's "new strategic direction", set for approval tomorrow, could see virtually every service outsourced to social enterprises or companies. The aim is to turn the authority from one which provides public services itself, to an "enabling" council, which only commissions them. The council hopes offloading services could shave 30% off its £1.1bn budget, as part of the government's drive to reduce the fiscal deficit.

Although councils have outsourced chunks of their services before, these proposals are regarded by experts as the first time a local authority has considered not directly providing any services at all.

Services would be offloaded in stages. While some "early adopter" services could be outsourced as early as this autumn, the rest would be divested in three phases from April 2011. Libraries, youth clubs, highway services, independent living centres, careers advice, children's centres, registrars, country parks and a records office are among the first services that could be divested.

Ultimately only a few hundred people could remain directly employed by the council, primarily in contract management. At present, the council employs around 27,000 people, 15,000 of whom work in education, which is set to be taken away from local authority control as the government converts schools to academies and free schools. Many of the remaining 12,000 could face either redundancy or be transferred to a social enterprise or the private sector.

The council says it wants to withdraw from directly providing public services in order to reduce the local authority's "size, cost and bureaucracy and build community capacity to enable Suffolk citizens to take greater control of their lives."

"The amount of money we are going to have to spend on providing services will fall dramatically over the next few years," council leader Jeremy Pembroke told the East Anglian Daily Times. "If we don't reform the way we deliver those services then the cuts would have to be much deeper - much more painful. By becoming an enabling authority we will give local people the opportunity to decide what level of service they want."

But unions warn thousands of jobs are at risk. "We are led to believe that the council could end up only employing 200 to 500 people at the end of this process", said Helen Muddock, branch secretary of the Suffolk branch of Unison. "We are talking about having a local authority where the only people employed directly will be dealing with contracts."

Children's services, including child protection, will not be exempted from the strategy, councillors warned. "I think virtually everything is up for outsourcing," said Sandy Martin, leader of the Labour group on the council.

Craig Dearden-Phillips, Liberal Democrat spokesman on communities at the council, questioned to what extent it could cease providing services itself. "A lot depends on to what extent they are prepared to divest the whole children's services apparatus, including child protection, which is wholly inhouse," he said.

The council has already started slimming down its workforce. Sixty-five creche workers were made redundant at the end of August, and in the autumn the council will be voting on separate proposals to privatise 16 care homes.

Dearden-Phillips said that while he offered "qualified support" for the strategy, he had concerns about how it would work in practice. "This needs to be done with inordinate care, in a non-cavalier fashion, involving the workforce and the third sector," he said. "The community is not going to engage", he said, if large commercial companies are looking after children at risk.

The move also raises fears about the quality and extent of services in poorer areas. "There are areas in Ipswich and Lowestoft that are among the 10% most deprived areas of the country. In these areas things like libraries and children's centres will fall by the wayside because there won't be the ability to attract the voluntary help," said Martin.

"We need to think of the longer term effects on communities and the services we are going to be providing," said Muddock. "We cannot divest ourselves of our public service responsibilities."

• This article was amended on 23 September 2010 to remove a reference to a private-sector company.