A website has been set up where ideas can be submitted until 9 July for consideration by departments, the Treasury and the Cabinet Office. The process will then be opened up to the general public. More cuts are to come in the spending review on 20 October.
The Prime Minister and Deputy Prime Minister have written a letter to public sector workers saying, 'The more we can find savings, the more flexibility we will have to avoid job losses and wage cuts.
'We want you to help us find those savings, so we can cut public spending in a way that is fair and responsible. You work on the front line of public services. You know where things are working well, where the waste is, and where we can re-think things so that we get better services for less money.'
Unions were united in their condemnation of the cuts and the two-year pay freeze for public sector workers revealed in the Budget for those earning over £21,000 a year.
Responding to the Government's 'Spending Challenge', Unison general secretary Dave Prentis said, 'Of course Unison members will co-operate in any exercise that helps cut out waste and delivers value for money for the taxpayer. They have been co-operating with the Gershon reviews for the past three years and have delivered efficiency savings of 6 per cent.
'But the Prime Minister is misleading the country by claiming that you can shave a massive 25 per cent off budgets just by cutting "waste". The efficiency savings made over the past three years have cut out most of the waste - there is very little fat left to cut.
'I would urge the Government to revisit these impossible cuts and consider what devastation they will cause to our society and our local communities.'
Voice, which represents teachers, support staff and childcare professionals, said its lowest-paid members would be the worst hit.
General secretary Philip Parkin said, 'Dedicated teachers, teaching assistants, childcarers and other public sector professionals are being made to pay for the folly, incompetence and greed of politicians and the City.
'Support staff and childcarers will suffer from the two-year public sector pay freeze. The flat rate payment of £250 for those earning less than £21,000 will do little except compensate them for the increased expenditure that they will incur as a result of the rise in VAT. Voice is particularly concerned about the financial situation of its lower-paid members, such as some education support staff and childcare workers.'