Finance Minister Peter Robinson has proposed the creation of a internal watchdog to scrutinise how government departments spend money.
He said the unit could identify potential savings in local departments.
He said a performance and delivery unit should include people from outside the public sector with a strong record in delivering greater efficiency.
Mr Robinson said civil service reform and efficiency savings will be crucial in delivering budget priorities.
He made the suggestion during a speech in Newcastle to the annual conference of the Chartered Institute of Public Finance and Accountancy.
"Delivery of 3% annual cash-releasing efficiencies will produce more than £700m by 2010-2011 for reinvestment in the executive's public expenditure priorities," he said.
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