CHANCELLOR George Osborne has given Conservative ministers just weeks to identify extra savings in their departments.
The deadline for proposals is the next Budget, due on July 8.
In a speech to the CBI, the Chancellor said: "If we want a more productive economy, let's get the government out of the business of owning great chunks of our banking system - and indeed other assets that should be in the private sector."
He predicted that it was "now within our grasp to make Britain the most prosperous country in the world, and the best place to do business".
The new Treasury Chief Secretary Greg Hands has asked unprotected government departments to identify further savings that can be made this financial year.
Mr Osborne said: "When it comes to saving money, we all know that the more you can do early, the smoother the ride.
And without fixing the public finances so our country lives within its means there can be no economic security for businesses or working people."
Before the Budget ministers will publish a new 'Plan to make Britain Work Better' to identify reforms needed in areas such as transport, broadband, planning, skills, childcare, science, and innovation.
TUC General Secretary Frances O'Grady accused Mr Osborne of planning extreme public spending cuts.
"Productivity has stagnated while George Osborne has been Chancellor - a failure rooted in the weak recovery that he has delivered. It will not be boosted by slashing public investment and removing workers rights," she said.
"It's no good putting your foot on the pedal if you keep cutting the fuel in the tank. The extreme cuts the Chancellor is planning will put growth at risk during a recovery that is already precarious.
"A firm foundation for higher productivity requires a much better economic plan. We need the government to invest in skills and infrastructure. Employees should be given a stronger voice at work, rather than removing their protections. And a fairer share of growth must go to wages so that workers have more money to spend."
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