The Department of Health has set aside a £20m pot to reward staff who come up with enterprising new ways in which the NHS can find the required efficiency savings of £2.3bn this year.
Prizes of up to £5m will be awarded by health minister Lord Darzi over the next four years to those with the best ideas.
Many of the prizes are likely to be awarded for advances in medical science and technology, including new drugs, but Darzi insisted he wants all NHS staff to get involved and think about ways money can be saved in their own line of work.
Darzi said: “It is a case of changing the mindset. We want everyone to be thinking about innovation, because that is what will drive improvement.”
The incentive is likely to be taken on by other government departments as they seek to make savings of £15bn by 2013-14, identified in last week’s Budget.
Darzi will unveil the scheme at the Science Museum in London today, where he is expected to say the money can go to anyone from scientists, to doctors, nurses and porters.