The government will launch a 12-month efficiency drive on Monday with the aim of saving up to 5 billion pounds of public money, according to Treasury officials.
The savings will be in addition to the 30 billion pounds already planned for the current spending review.
The move highlights the government's need for cash following Prime Minister Gordon Brown's announcement last month of compensation for those who had lost out because of the abolition of the 10 pence tax band.
The government has already revised its borrowing projections sharply higher, leaving it with little room for manoeuvre.
The new programme will be announced by Yvette Cooper, chief secretary to the Treasury, and focus on four key areas - buying in bulk, using property more efficiently, asset management and back office.
