A PERFORMANCE AND INNOVATION UNIT REPORT – SEPTEMBER 2000

CABINETOFFICE

e.go

vElectronic

Governm

entServices

forthe

21stC

enturyAPERFORMANCE

ANDINNOVATION

UNITREPORT

–SEPTEMBER

2000

e.govElectronic Government Services for the 21st Century

1

CONTENTS

Foreword by the Prime Minister 3

1 Executive Summary 5

2 Introduction 14

3 A Vision for the Electronic Delivery of Government Services 16

4 The Benefits of Electronic Service Delivery 21

5 Meeting the Challenge of Electronic Service Delivery 32

6 Reaching the Citizen 37

7 Creating a Mixed Economy Delivery Market 59

8 Organising Government to Deliver 69

9 Implementation 92

CCoonntteennttss

Annexes

A. The role of the Performance and Innovation Unit 104

B. The project team, sponsor Minister and advisory group 105

C. Project methodology and research 106

D. Organisations consulted 109

E. References 111

F. e-Business planning and prioritisation framework 113

G. Glossary 122

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FOREWORD

BY THE PRIME MINISTERIn July, we announced the biggest investment in public services ofmodern times. That increase is a huge opportunity for everyoneinvolved with public services to improve the way we deliver thoseservices to citizens.

But with that opportunity comes a responsibility: to use thoseresources as effectively and efficiently as possible. So, the newfunding is tied to targets about the outcomes we want to achieve.By specifying what we want achieved, we can innovate with howto achieve those goals.

Electronic service delivery will be a key source of innovation.We can use new digital channels to deliver better quality servicesto the citizen – available 24 hours each day, faster, moreconvenient and more personalised. By doing so, we will alsostimulate the market for e-commerce, by encouraging thewidespread adoption of these new technologies and creatingnew business opportunities.

I am determined that we should capitalise on these opportunitiesand that by 2005 at the latest, all government services will beonline. Equally important is that by the same time, everyoneshould have access to the Internet, so that the whole of societycan benefit.

None of this is straightforward, for we need to make profoundchanges to the way government works if we are to make the mostof new technology. We need to be sure that everyone in societycan benefit, and that we are using the talents of the private andvoluntary sectors as effectively as possible. To begin with,government must set out a clear vision of what it is trying toachieve, and a carefully worked out approach for attaining itsgoals. That is why I asked the PIU to develop a strategy for theelectronic delivery of government services to the citizen.

This report sets out a radical and compelling direction forgovernment electronic services. Services will be joined up,delivered through a range of channels, and backed up by adviceand support. Service delivery will be opened to the private andvoluntary sectors, so that there will be a mixed economy ofelectronic delivery. Competition between providers will stimulateinnovation and drive up service quality.

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I am determined that government services delivered electronicallyshould be of the highest quality. The strategy set out in this reportwill provide a sound basis for rapid progress towards that goal andfor continuing innovation and service improvement in the future.Service users deserve the step change that electronic delivery canprovide. By implementing the conclusions of this report, I amconfident that we will deliver precisely that.

Tony Blair

1. EXECUTIVE SUMMARY

Key points

• Electronic service delivery offers huge opportunities to improvepublic services for the benefit of citizens: more convenient, morejoined-up, more responsive and more personalised.

• It is going to transform the way the public sector does business,in many cases replacing traditional channels for doing business withmore efficient and effective electronic channels.

• This report sets out a comprehensive strategy, underpinned by a clearvision, for realising the full potential of electronic service delivery.

• This strategy requires change in three broad areas:

– ensuring that government electronic service delivery is drivenby the use that citizens make of it. There is scope for better co-ordination of initiatives to ensure that citizens have the skills,information and equipment to interact electronically. There shouldalso be measures to give people mediated access to electronic serviceswhere they want and need it. Government must also respond moreeffectively to citizen preferences and make investment decisions onthe basis of service use;

– opening the electronic delivery of government services to theprivate and voluntary sectors. Competition between public, privateand voluntary sector providers of electronic government services willimprove service quality, stimulate innovation and improve valuefor money;

– putting in place new incentives, levers and institutionalstructures to make sure the transformation happens, includingnew funding and sharpened financial incentives to promote electronicservice delivery and the creation of a government incubator todevelop new service ideas.

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Electronic service deliveryoffers unparalleledopportunities to improvepublic services for the benefitof citizens…1.1 The digital revolution offers hugeopportunities to improve public servicesby better tailoring them to the needs ofindividual citizens, who increasingly want tobe able to choose when, where and how theyinteract with government. Many publicservices will be delivered far more efficientlyand effectively electronically than throughtraditional channels. However, groups thatuse government services most heavily areoften those that currently have the lowestlevels of access to electronic servicedelivery channels.

… and is going to transformthe public sector1.2 Technological change also presentsgovernment with an unparalleled opportunityto transform the way the public sector doesbusiness. It is a significant challenge. The scaleand complexity of government, both centraland local, means that the transformationrequired to capitalise on the potential of thenew technology will not be easy to manage,as the private sector has already found.Government’s track record of managing IT

projects is not good, and the move toelectronic service delivery will require verysubstantial work on back-office IT systems.The changes required to the waysgovernment works are likely to be aneven greater challenge.

To realise the full potentialof electronic service deliveryrequires a comprehensive strategy and a clear vision1.3 This report sets out a comprehensiveand radical strategy for implementinggovernment electronic service delivery (ESD)to the citizen. This strategy is grounded ina clear vision for government ESD, andincludes both central and local government.

Electronic service delivery needs tobe joined-up…1.4 Electronic service delivery should beused to join up service provision acrossdepartmental boundaries, to break down silo-based delivery networks and to allow citizensto interact with government whenever theychoose, whether at home, at work or on themove. Over time people will increasingly findthat electronic delivery provides greaterconvenience, responsiveness and a morepersonalised service than other formsof delivery.

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• In addition, the government must continue to implement its rollingprogramme of priority services, with a significant number of prioritycitizen services funded for full implementation this year.

• The report includes an implementation plan to show how governmentcan realise the vision. The roles of individual departments will be criticalin delivering this and there are also key roles for the e-GovernmentMinister and e-Envoy.

… delivered through a range ofchannels…1.5 Citizens should have a choice of electronicchannels for accessing government services.The electronic delivery of government servicesshould be based around open, Internetstandards, so that citizens can access theservices through a variety of platforms. Not allservices will be capable of being accessed onall platforms, and government should notalways aim to put services on all possibleplatforms. However, whether citizens use aPC, digital TV (DTV), mobile phone or otherweb device, they should be able to access the same government content in a user-friendly format.

… backed up by advice andsupport… 1.6 Electronic delivery of government servicesshould be backed up by access to advice andsupport for those who need and want it.Such advice and support will be critical toachieving high levels of take-up. There willremain a need for a variety of deliverychannels, including places where citizens cango to access government services and speakto a trained person. These centres should besupported by essentially the same electronicsystems that are accessible to people athome. Telephone call centres will also havea crucial advisory and supporting role.

… open to the private and voluntarysectors…1.7 Electronic delivery of governmentservices offers enormous new opportunitiesfor the private and voluntary sectors. Thereshould be a new, mixed economy in theelectronic delivery of government servicesin which the public, private and voluntarysectors can all play a role on the basis thatwhat matters is what works rather thanwho does it.

… competitive…1.8 Competition between public, private andvoluntary sector providers of governmentservices will improve service quality, stimulateinnovation, and promote the bundlingtogether of public and private services tothe benefit of the consumer. From theperspective of citizens as taxpayers, suchcompetition should result in improved valuefor money.

… and driven forward by governmentoperating in new ways1.9 Government will need to work in newways if the opportunities to improve publicservices are to be seized. It will need to re-invent how it works through strongerleadership from the top, clearer and morepowerful incentives to change, radicalshifts in arrangements for working acrossboundaries and a cultural change tosupport innovation.

1.10 What can be achieved is illustrated bya number of instances of best practiceinternationally. For example:

• in Australia, www1.maxi.com.au offers aone-stop shop delivery system, bringingtogether many government servicesthrough the Internet, telephone andpublic kiosks;

• in Finland, the government collects eachcitizen’s annual financial informationand makes a ‘tax proposal’ to the citizenfor agreement, saving them the effort ofself-assessment;

• in Singapore, the www.ecitizen.gov.sgsite offers a comprehensive range ofgovernment services, arranged aroundlife events;

• in the private sector, www.ezgov.com andwww.govworks.com in the US offer acomprehensive package of online publicservices for local and state governments,

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including information on all aspects ofgovernment, processing payments andallowing transactions, such as renewingdriving licences.

The barriers to implementingthis vision need to be identified and overcome1.11 This project has identified three keybarriers to realising the vision:

• government is not yet doing enough tomaximise use of its online services;

• government may be insufficiently opento private and voluntary sector serviceproviders who have a crucial role to playin innovative electronic service delivery;

• the necessary incentives and institutionalstructures to realise the full potential ofelectronic service delivery may be absentin the public sector.

1.12 Much has already been done to addressthese barriers or is in hand. For example:government has announced a target thatall its services should be online by 2005; its e-strategy has been published; departmentshave begun to develop online services; andthe cross-cutting spending review of theknowledge economy has set aside £1 billionto develop online services. The e-businessstrategies that each department is developingfor October 2000 will also be critical driversof e-government and departmentalcommitment to their implementation is vital.Building on this work, the following sectionsset out the key recommendations in thisreport for realising the vision.

Realising the vision (1): Reaching the citizen1.13 If the benefits of electronic servicedelivery are to be maximised and all sectionsof society are to share equitably in them,

government needs to maximise use of itsonline services. More than ensuring thateveryone can access them and has theinformation and skills to use them, thismeans that government’s online activitiesmust be driven by levels of use and bycitizen preferences.

1.14 Access to skills and equipment to usethe Internet was a key theme of the cross-cutting review of the knowledge economycarried out by the Treasury in parallel withthis project. As a result of the review, anumber of DfEE and DTI programmes tobuild skills have been funded and the PostOffice is currently developing InternetLearning and Access Points, as proposed inthe Performance and Innovation Unit (PIU)report Counter Revolution: Modernising thePost Office Network. The broader governmentaccess strategy is set out in the UK onlineReport, published in tandem with this one.In the light of this work, the PIU team wasasked not to make access a key focus of itsstudy, although it did contribute substantiallyto the review.

1.15 This report therefore recommends thatin addition to existing work:

• the government should take steps toensure that those who are unable orunwilling to use electronic channelsthemselves can still benefit fromelectronic service delivery. Apart fromdeveloping web-enabled support channels,such as telephone call centres, governmentshould experiment with new ways ofhelping this group to use governmentservices delivered electronically. Followingthe PIU report on the modernisation ofthe Post Office network, pilots of a web-enabled ‘Government General Practitioner’service in sub-post offices and otherphysical locations are being taken forward.This study recommends that mobile,laptop-equipped facilitators should alsobe piloted to provide information andPPII

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advice on electronic access to servicesfrom the home;

• government should take advantage ofthe potential of DTV as a channel forESD by deciding whether to link fullInternet access to digital switchover;

• service providers should follow theprinciple that levels of use must drivewhat they do. Before investing in anelectronic service, they need to be clearwhat level of take-up they are seeking toachieve, by when, and how they are goingto achieve it. If after the planned period oftime, and the planned level of marketingexpenditure, a service is not well used, theassumption should be that there is littlecase for further investment. Fundingshould be staged, so that there are clearbreak points at which to review thesuccess of a service before makingsignificant further investment;

• all service providers should adopt open,Internet standards as the backbone ofservice delivery, and build supportingchannels around this core electronicservice. Government should not be usingclosed, proprietary delivery systems forits services;

• the Office of the e-Envoy should developa Trust Charter for government services,setting out how government will protectcitizens’ privacy on its sites;

• government departments should co-ordinate their marketing and brandingof electronic government services. Thereare economies of scale to be achieved fromdoing so, and benefits to the consumerarising from some co-ordinated action.

Realising the vision (2):Creating a mixed economy inthe electronic delivery of government services1.16 The vision of a mixed economy in theelectronic delivery of government servicesrelies on government being ‘open forbusiness’, so that private and voluntarysector organisations are able to access theinformation and databases that they needin order to deliver services. However, theincentives for departments and other publicsector bodies to allow access to the necessaryback-office systems are currently weak.

1.17 This report therefore recommends that:

• the e-Envoy should ‘champion’ theinvolvement of the private andvoluntary sectors in the electronicdelivery of government services. TheOffice of the e-Envoy should supportprivate and voluntary sector organisationsthat experience difficulties in interactingwith government. Where necessary, the e-Envoy should promote a level playingfield between public, private and voluntaryproviders, e.g. if the private and voluntarysectors face problems in obtaining accessto data and information needed to delivergovernment services electronically;

• government needs to take care to avoidcrowding out potential private andvoluntary sector providers. Governmentwill inevitably have a prime role in thedelivery of its own services. Beforedeveloping their own online services,however, public sector providers shouldassess the rationale for public provision,and review regularly whether continuedpublic sector involvement is indicated;

• government should avoid exclusivecontracts for the ‘front end’ delivery ofits services. In particular, it should make itas straightforward as possible for private

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and voluntary sector providers to delivergovernment services, and adopt a workingassumption that, unless there are strongpublic policy reasons to the contrary, allsuch providers should be allowed todeliver government services. It should alsoactively seek relationships with sites thatattract high volumes of users, so thatgovernment services are accessible frommajor private sector portal sites;

• the government should adopt clear,explicit and consistent policies onadvertising and other issues of probityaffecting the electronic delivery ofgovernment services. Advertising is apotentially significant source of revenueand there is no reason for governmentto forego it. However, care needs to betaken not to undermine public trust ingovernment services. Government policyneeds to set out the right principles fortaking a view on the role of advertisingon a service-by-service basis.

Realising the vision (3): Organising to deliver1.18 Electronic service delivery offers thepotential to transform the public services,i.e. alongside other changes, to put intopractice the Modernising Governmentagenda. However, this transformation willnot happen by itself. New incentives, leversand institutional structures for electronicservice delivery need to be put in place tomake it happen.

1.19 This report therefore recommends that:

• government should give electronicservice delivery a stronger strategicfocus through regular six-monthly Cabinetmeetings to discuss progress againsttargets for e-government, through settingexplicit electronic service deliveryobjectives for Permanent Secretaries andby making electronic service delivery

targets part of Service Delivery Agreementsbetween departments and the Treasury;

• financial incentives for electronicservice delivery should be sharpened bygiving the Office of the e-Envoy dual keyresponsibility with the Treasury for therelease of funding for e-governmentprojects and by introducing new bonusschemes to reward individuals whosuccessfully implement ESD;

• funding for e-government projectsshould be made conditional on robustdepartmental e-business strategies andrigorous appraisals of individual projectproposals. These mechanisms should beused to ensure that key public services arebrought online and that departments joinup service delivery wherever this bringsoverall benefits to the users of governmentservices. A thorough and rigorous businesscase should underpin all electronic servicedelivery projects;

• ‘product managers’ should be appointedwith responsibility for developing joined-up services targeted at particular customergroups. The recommendations in the PIUreport Wiring it up should be applied toensure that this cross-cutting workingis successful;

• electronic service delivery units shouldbe established in major service deliverydepartments to drive forward the deliveryof services electronically;

• a government incubator should beestablished in the Office of the e-Envoy todevelop new service ideas. This incubatorshould be responsible for developing newideas in partial isolation from traditionalservice providers. Ideas should bedeveloped into prototypes, tested withtheir target audience, and, if successful,rolled out quickly;

• a study should be undertaken of thedetailed implications for the publicsector workforce and for the physicalPPII

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Area of Things that you can Things that you will be able to government do online now do online within the next year

Search the Land Registry’s database ofresidential property prices in the latestquarter at regional, local authority orpostcode sector levels.

Environmentalservices

Use an interactive pensionforecast form.

Use a pension claim form via theGovernment Gateway.

Download and complete any DSSclaim form by the end of 2001.

Access the Pensions Direct service,which enables customer enquiries andreported changes of circumstance tobe handled on the spot, using anInternet-supported telephone service.

Receive most benefit paymentselectronically

Benefits

Apply for Employment Service jobsonline either from home or attouchscreen kiosks in Jobcentres.

Place job adverts online with theEmployment Service.

Get information on jobs, learningopportunities and careers from theLearning and Work Bank (DfEE/ES).

Search for jobs available throughJobcentres via the Employment Service(pilot project online only at themoment).

Employment

Get information on jury service and onfacilities provided for jurors at eachCrown Court.

Download over 230 forms from theCourt Service and get access to thedaily lists for the Crown Court andSupreme Court.

Obtain detailed legal advice andinformation by accessing theCommunity Legal Service websiteand directory.

Courts

Online courses will be available withthe Department for Education andEmployment, and these may include,for example, Japanese, Latin and Maths.

Learn about business and IT onlinewith learndirect.

Access the Parents’ web-sitecontaining information for parents onschools and other areas of interest.

Search Ofsted inspection databaseand reports.

Access the National Grid for Learning.

Education

Have your hospital medicalappointments and referrals bookeddirectly by your GP while you wait atthe surgery (1 million people will beable to do this by the end of 2000).

Have the necessary medical informationtransferred directly between GPs andpharmacies (pilot project by end 2001;national roll-out by 2005).

Get authoritative advice and guidanceon health and healthy living from NHSDirect Online.

Health

Table 1.1: Early online services

asset requirements of government ofthe increasing take-up of electronicservice delivery. Government needs toensure that it tackles people issueseffectively to ensure ownership of the ESDagenda, and so that employees see it as anopportunity to learn new skills, rather thanas a threat. It also needs to be prepared forthe scale of transformation that successfulESD will bring. There are many thousandsof people in the public sector whose workinvolves the operation of paper-basedsystems, and many thousands more whosework will be affected by the scaling backof physical government networks fordelivering services. Not all of these peopleand assets will be affected, but many will.At the same time, the demand for certainskills in government will rise. In the shortterm, government will need more ITprofessionals and, in the medium term,more people trained to provide high-quality customer service.

Priorities must be driven forward1.20 Critical to becoming a leading e-government is that departments, agenciesand local authorities should rapidly bringsome key services online so that these canact as exemplars for further progress. Thereare useful services already online, and the lifeevent services on the UK online portal willbe helpful examples of the possibilities forjoined-up services. Table 1.1 sets out aselection of the currently available services,

together with the key citizen services thatwill be available by the end of this year.

1.21 It is equally critical that momentumcontinues to grow behind the ESD agenda,and to this end the PIU worked with thecross-cutting review to identify priorityservices for funding. These are set out in table1.2, together with planned implementationdates. It is important that these priorities aredriven forward as quickly as possible.

1.22 Firm dates for implementation will beagreed between departments and the Officeof the e-Envoy for other services as part ofthe e-business strategy process currentlyunder way. Timings will be reflected indepartments’ service delivery agreements.This process will play a critical part inpromoting ESD.

1.23 In addition, rapid progress should bemade in implementing joined-up services,by moving quickly to appoint demonstratorproduct managers for priority customergroups. Provisionally, these should bestudents, parents, motorists andhomeowners. Priority incubator projectsshould also commence rapidly and an opencompetition to select the first projects shouldbe completed by the end of 2000.

Implementation1.24 This report includes a detailedimplementation plan to show how the visionof a thriving mixed economy deliveringpublic services can be achieved. This sets

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Area of Things that you can Things that you will be able to government do online now do online within the next year

Fill in your VAT registration online withCustoms and Excise.

Fill in self-assessment tax returns andsubmit online to the Inland Revenue,receiving a £10 discount.

Taxation

Search a full index of documents heldat the Public Records Office.

Officialinformation

Table 1.1: Early online services – continued

out actions that need to be taken to deliverrecommendations and the required changesto realise the overall vision. Individualdepartments and agencies will have thecritical role of delivering services on the

ground, and individual recommendationsare addressed to a range of bodies. The e-Government Minister and e-Envoy will alsohave important roles as overall championsof the implementation of the report.

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(Includes business as well as citizen services) Implementation

2005, but duplicatelicences now

Rolling programme fromApr 2002 to 2005

2005

2005

2005

Dec 2005

By the end of 2005:Driving agencies – putting these online to deliver licence applications, cartax renewals, driving test applications, etc electronically, and establishlinks with car insurance databases (DETR and agencies)

Benefit applications – putting benefit applications and payments online (DSS)

Passport applications – putting passport applications and renewals online (HO)

Conveyancing – enabling electronic land registration (HM Land Registry)

Patents – enabling online patent filing (Patent Office)

Modernisation of legal records – putting transactions between the publicand the courts (e.g. civil claims), public records and Children and FamilyCourt Advisory and Support Service into electronic, Internet-enabledformats (LCD)

Spring 2001

Sept 2001

First release in Apr 2001with ongoing development

Fully in place by Jan 2002

Apr 2002

Dec 2002

Dec 2002

Now to Dec 2002

By the end of 2002:All HE Student Support application forms online

Connexions smart card for all young people to help with costs ofparticipation in learning

Small Business Service – putting the SBS online to provide information andadvice to small businesses covering support services and regulation (DTI)

VAT – online VAT registration and returns, trade statistics and electroniccontact centres (C&E)

Companies’ registration – putting Companies House online to allowelectronic registration of companies (Companies House)

Modernisation of CAP payment systems and farmers’ portal providing online applications for agricultural grants and advice (MAFF)

Culture online – putting a large volume of cultural information acrossmuseums, libraries, art galleries, etc online, working in association withthe private sector

The option for local authorities to run small-scale experiments with onlinevoting in local elections

Now

From autumn 2000

Dec 2000

By the end of 2000:Tax returns – electronic filing of tax returns and online contact centres (IR)

Development of the UK Online citizens’ portal, Government SecureIntranet, Government Gateway and other corporate projects(Cabinet Office)

Development of the Learning and Work Bank – providing an onlineservice for citizens looking for jobs or training opportunities (DfEE)

Table 1.2: Priority services identified in the cross-cutting review of the knowledge economy

Background to this report2.1 The government has recognised theimportance of the digital revolution for thedelivery of its services, and has already takensignificant steps towards capitalising onthe potential benefits of electronic servicedelivery (ESD). Government has already:

• set itself the target that 100% of serviceswill be available electronicallyby 20051 and committed itself topublishing a report twice a yearshowing progress;

• set a target that there should be universalaccess to the Internet by 2005;2

• published the e-government strategicframework3 in April 2000, identifying acommon framework and direction forchange across the public sector;

• undertaken a cross-cutting spendingreview of the knowledge economy,as part of the 2000 spending review(SR2000) to identify funding forelectronic services and to promoteuniversal Internet access;

• developed a personalised point of entryto a wide range of government services:the UK online portal for citizens.4

The portal, to be launched in autumn2000, will gradually be developed toprovide more functions.

2.2 Additionally, there is considerable furtherwork in hand, including:

• the preparation by departments of e-business strategies, setting outhow departments will meet the 2005electronic service delivery targets;

• the implementation by departments,agencies and local authorities of earlyexamples of electronic services,including, for example, NHS Direct andthe tax self-assessment service;

• the Government Gateway projectto provide a secure and reliablecommunications infrastructure, so thatcitizens and businesses can havecontinuous direct online access togovernment services;

• the Government Secure Intranet (GSI):a managed infrastructure linkingdepartments’ networks in a secure manner;

• publication of the UK online annualreport setting out the UK’s progress on e-commerce and e-government.

2.3 In the light of this work, thePerformance and Innovation Unit (PIU)was asked to develop a strategy for theelectronic delivery of government services.Details of the role of the PIU and of theproject arrangements are set out in annexesA and B.

2. INTRODUCTION

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1 Government to speed up introduction of online services, Downing Street Press Notice, 30 March 2000.2 Prime Minister’s speech at the Knowledge 2000 Conference, 7 March 2000.3 E-government – A strategic framework for public services in the Information Age. Cabinet Office. April 2000.4 www.ukonline.gov.uk from late 2000.

Scope of the study2.4 This project looks at government servicedelivery to the citizen. It covers central andlocal government and the wider publicsector, but does not look at service deliveryto business, or at procurement.

2.5 In Scotland, Wales and Northern Ireland,the devolved administrations are responsiblefor deciding their approach to developingand implementing electronic service deliveryin respect of devolved services, includinghealth and local authority services, and forthe preparation of appropriate IT strategies.The Joint Collaborative Group which theScottish, Welsh and Northern IrelandInformation Age Government Championshave established with the e-Envoy’s office willhelp to ensure that strategies in Scotland,Wales and Northern Ireland remain fullycompatible with the approach across the UK.Consideration and implementation of manyof the recommendations of this report inScotland, Wales and Northern Ireland wouldtherefore fall to the devolved administrations.

Structure of this report2.6 This report first sets out a vision forgovernment electronic service delivery to thecitizen, then describes the barriers to itsachievement, the solutions to these challengesand concludes with an implementation plan.Accordingly, the chapters that follow are:

• Chapter 3: A Vision for the ElectronicDelivery of Government Services

• Chapter 4: The Benefits of ElectronicService Delivery

• Chapter 5: Meeting the Challenge ofElectronic Service Delivery

• Chapter 6: Reaching the Citizen

• Chapter 7: Creating a Mixed EconomyDelivery Market

• Chapter 8: Organising Governmentto Deliver

• Chapter 9: Implementation

The financial implications ofthis report2.7 This report contains 43recommendations, which will require actionby a range of departments, agencies and localauthorities. The PIU team has worked closelywith HM Treasury as part of the cross-cuttingreview of the knowledge economy to ensurethat where the costs of the recommendationscannot be accommodated within existingresources, funding allocations reflectadditional costs. In particular, the review setaside £1 billion for electronic service delivery,largely ring-fenced within departmentalexpenditure limits. Additional funding of£4 million per annum has been allocatedto the Office of the e-Envoy to carry outadditional functions proposed in this report,and money has been ring-fenced for projectsundertaken by the government incubator.

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3. A VISION FOR THE ELECTRONICDELIVERY OF GOVERNMENT SERVICES

Transformed lives? – A future for government electronic service delivery

Anthony was asleep. Gail and John sat down in front of their TV and switched into the TPA TravelPortal. Having identified themselves they were greeted by a smiling digital face of a woman.

‘We want to get directions from our house to Newquay in Cornwall,’ John said. He gave thename of the hotel. It was their first holiday in two years tomorrow. A combination of Anthony,now an energetic toddler, and work had prevented them from taking time away up to now.Gail was heavily pregnant with their second child but both of them needed the holiday.

‘OK, John,’ began the guide. ‘A good way to do that is to…’

As the guide spoke, detailed maps appeared on the screen to illustrate the spoken words.When it had finished it asked if they wanted the directions stored and sent to their mobilephones. They eagerly agreed to this, starting to get excited about the trip, and the guide wenton to say,

‘If you would like, I can track your position through your mobile phone as you travel. This willallow me to guide you past traffic obstructions and send your position to your breakdownservice should you have any problems. This will cost a one-off fee of £10. Are you interested?’

Gail nodded and John said that they were. He instructed the service be directed to his phone.

The guide asked them to wait while it checked for other information relevant to them andtheir trip. After a few seconds it announced,

‘Gail, I am informed by NHS Direct that there are health considerations you might want totake into account for this trip. Would you like to go to NHS Direct now?’

Gail agreed to this. The NHS Direct site, represented by a little cartoon doctor, welcomed her.Commenting on the advanced nature of her pregnancy, it asked if she wanted the contactdetails for hospitals near the hotel in Newquay.

‘Please send them to my phone,’ Gail said.

NHS Direct also asked her if she wished to authorise the immediate release of her medical recordsto any Newquay hospital to which she might be admitted. She and John discussed this briefly,reaching the conclusion that it was alright. The NHS Direct site registered her acceptance, goingon to say that the TPA Travel Portal was still online with more points for communication.

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ESD will transform public services to focus on the citizen3.1 Over the next five years, governmentservice delivery will be transformed. By 2005,the public, informed by their experience ofprivate sector delivery, will demand no less.This chapter paints a picture of how we thinkgovernment service delivery will look if it is tomeet customer expectations.

3.2 The current pace of technologicalchange means that there are few certaintiesabout future service delivery. But we do know

that ESD has the potential to offer trulycitizen-focused services:

• citizens will choose when and wherethey interact with government. Formany services, government will be open24 hours a day, 7 days a week. Citizenswill be able to interact with governmentfrom home, at work or on the move.NHS Direct is an early example of howthis might be achieved;

• services will be delivered throughmultiple channels. Traditional channelswill compete with new electronic channels.

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They returned to the smiling face, which cheerily said,

‘Welcome back to the TPA Travel Portal, John and Gail. The road tax on the New Generationscar that you own expires in three days, on 31 July. I can renew it for you, but your car willneed to pass an MOT test first.’

They stared glumly at the screen. Then Gail looked at her husband accusingly.

‘Really?’ she said.

The guide, which had been quiet while it conducted a search, informed them,

‘I can book you into a TPA Travel Portal approved garage for an MOT once you reachNewquay. Would you like me to do this now?’

They sorted out arrangements for this, after which the guide offered to let the police know ofthe length of time they would be away.

‘This is entirely optional and for your peace of mind while you leave your house empty.If you wish I can put you on to the Police Service Portal, where you can also take up thisoption directly.’

They decided to tell the guide the dates and received confirmation that the police hadthe information.

Finally the guide asked,

‘Do you want to see a short sponsored film on checking your car is safe for the journey?’

John put his hand over the voice link.

‘I don’t know if I need that really,’ he said.

Gail treated him to a silent look that led him to lift his hand and say,

‘Yes, I’ll have a look.’

As well as the public sector, the voluntaryand private sectors will offer new interfacesto government services. For example, youmay pay tax through your electronic bankor renew your driving licence through yourfavourite motoring portal;

• government will be organised todeliver services that are customerfocused. A Government Gateway willallow the aggregation of data acrossfunctions by users of that data in theprivate and voluntary sectors, and by newaggregators acting as wholesalers ingovernment data and information. Newcitizen-facing government, voluntary andprivate sector intermediaries will competeto offer the best combinations of services.

3.3 Some elements of that vision are set outin figure 3.1.

Joined-up customer-focused serviceswill be available over a range ofchannels…3.4 Interactions with the citizen can betailored better to the citizen’s needs, as

ESD overcomes the artificial separationsbetween services imposed by the separateinfrastructures through which services arecurrently delivered. Joined-up, 24-hourservices become a reality as soon as theycan be delivered electronically.

3.5 An important part of the vision is the setof web-enabled physical channels. Wherethere is a fully online service, these physicaloutlets will be supported by the sametechnology as the channels going direct tothe citizen. They will provide access to theservices and thereby spread the benefits ofESD to those not able to interact directly.They may take the form of physical networkssimilar to those we know today, or mobilefacilitators, spreading the benefits of ESDmore widely.

3.6 Where a service cannot be fully web-enabled, the existence of ESD can still beused to enhance the experience of theservice user. Even where a human interactionis a key component of a service, there maybe many other aspects of the service whichcan be web-enabled. For example, inhealthcare, appointments can be booked,

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Today Vision

Dept/Agency/

LA

Dept/Agency/

LA

Dept/Agency/

LA

Dept/Agency/

LAphysical channel

physical channel

physical channel

physical channelDept/

Agency/LA

Dept/Agency/

LA

Dept/Agency/

LA

Dept/Agency/

LA

Unjoinedback office

Separate,physical,

govtdelivery

Producerdrivenservicedelivery

Joined-upback office

Multiplechannel,mixed

economydelivery

Citizen-focusedservicedelivery

Web-enabled physicalgovernment channel

Private,voluntary

sectorvalue-added

services

Gov

ernm

ent

Gat

eway

government e-service

Figure 3.1: Vision of future ESD

prescriptions sent direct to a pharmacistfor immediate collection, and the need tovisit the doctor at all for a repeat prescriptioneliminated. Moreover, those involved indelivering services face to face will besupported by electronic systems: thedoctor’s ability to help the patient can beenhanced with the right systems, such aselectronic patient records and databases ofprescription drugs.

… delivered by public, private andvoluntary sector providers in a new‘mixed economy’ market…3.7 One key feature of the vision is thatmany services will be provided throughprivate and voluntary sector channels incompetition with one another. In the pastgovernment has only been able to interactwith citizens through physical channels. Inparticular, it has been obliged to build avariety of formal and informal physicalnetworks to deliver its services (such asJobcentres, town halls, post offices). Theexistence of the Internet means that thereis a parallel channel for interaction betweencitizen and government.

3.8 An example would be a private sectorstudent portal. The portal would provide arange of services to the student, concernedperhaps with accommodation, careers, holidaywork and so on. It might well want also to actas a channel for university admissionapplications and student loan applications,because that would bring large numbers of itstarget audience to the portal. ESD makes thisa viable proposition because it reducestransaction costs to such an extent that thecosts of provision can be outweighed by thebenefits to the provider of a larger audience.

3.9 The student benefits from thearrangement, because a number of providerswill compete for their custom, driving upquality. The government benefits from this

arrangement, because its delivery costsare cut. The private and voluntary sectorsbenefit as they attract more people to usetheir services.

… as part of a modernised and re-invented approach to servicedelivery3.10 All of these considerations mean thatgovernment will be able to achieve itsobjectives more effectively. To what extent itcan also do so more efficiently will vary byservice. Where a service is transactional orthe provision of information, then thepotential savings are very great. The highcosts associated with paper processing canbe avoided, and government can rationalisephysical channels. Those that remain will beweb-enabled, guaranteeing both access toservices and the benefits of ESD.

3.11 For other key types of service, whereface to face meetings are essential, the costimplications are much more complex. Forexample, personal social services could beenhanced in a number of ways by givingthose providing the service mobile access togood back-up systems. However, it is notclear that this would lead to efficiencysavings in all cases. Nonetheless, even in thisarea, the Care Direct initiative is finding away of enhancing efficiency through ESD byoffering an alternative, joined-up channel forhealth and social care services, and henceproviding a more convenient alternative toface to face interaction in some cases.

3.12 With changes to government servicedelivery will come major changes togovernment itself, on a far greater scale thanis currently being planned for. In our vision ofthe future, many fewer people will be neededto deal with ‘back office’ paper andtransaction processing. In the front office,perhaps more will be involved in directcustomer-facing roles, but many fewer of

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these will work in existing physical networks.A rather higher proportion than today willwork in one-stop shops, and more in callcentres designed to provide access and tosupport online transactions.

A vision grounded in fourkey principles3.13 The vision will not be achievedovernight. Government needs to begin tomove there, not least by sorting out its backoffice and beginning to bring its servicesonline. However, it needs to ensure that all theactions that it takes help it to move towardsthe vision, and that it does nothing that willprevent it from realising its ultimate goal.

3.14 To this end, as government movestowards the vision, it should observe thefollowing principles:

Principle one: Focus on improvinggovernment services for citizens

• Priority areas are those which make themost difference to the citizen:

– where the transaction volumes anduser numbers are high;

– where there is interaction not justpublication;

– where services can be joined-up.

• Take-up of services must be the key driverof investment and the key performanceindicator.

Principle two: Create competitivepressure

• Open up electronic delivery of governmentservices to the private and voluntarysectors.

• Do not make exclusive contracts for front-end delivery – avoid private sectormonopolies.

• Let electronic delivery compete withtraditional delivery inside government.

• Make the Internet the backbone to ESD,but allow multiple entry routes.

Principle three: Reward innovation,accept some failure

• Get going quickly, and keep learningfrom mistakes.

• Set ambitious goals, informed by citizenpreferences.

• Begin with prototypes that can be builtquickly and tested.

• Quickly scale up successful prototypesfor launch.

• Be ruthless in weeding out unsuccessfulgovernment e-ventures.

Principle four: Push for efficiencysavings

• Wherever possible ESD should substituterather than complement traditionaldelivery.

• Determine the trade-off between trust andincome (e.g. advertising) for each service.

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Introduction4.1 Government has recognised that as amajor processor of information it can be asignificant beneficiary of the information andcommunication technology (ICT) revolution.In the following sections we delineate thebenefits more fully, showing that ESD can:

• benefit the citizen as a consumer ofgovernment services;

• benefit the citizen as a taxpayer; and

• act as a catalyst for enhanced UKeconomic performance.

ESD will hugely benefit usersof government services4.2 Government services can be categorisedin many different ways. A useful distinctionis between published, interactive andtransactional services, as set out in figure 4.1.

4.3 Across all of these types of service,citizens’ expectations of quality are risingas new services from the private sector aredelivered faster and more conveniently usingICT. The challenge to government is tomatch and even surpass these expectations:‘‘Government will be compared to the creamof the private sector’’.5 Government can dothis in two ways:

• firstly, by using ESD technology toenhance existing services;

• secondly, by creating wholly newelectronic services.

4. THE BENEFITS OF ELECTRONIC SERVICE DELIVERY

Summary

Currently government services are largely delivered through a single, oftenpaper based, channel, involving face to face interaction and frequentlyattuned to the needs of the service producer rather than the user.

The vision for electronic delivery of government services is to move tomulti-channel, mixed public and private delivery of citizen-focused services.

If this is achieved, it will radically improve services to the citizen asconsumer, transform government operations, reducing costs to the benefitof taxpayers, and ultimately enhance UK economic performance throughincreased public sector productivity.

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5 Martha Dorris, Office for Intergovernmental Solutions, US Government. Washington DC. 8 May 2000.

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Value

Complexity

Publish:provide users withinformation(e.g. news)

Interact:allow users to searchfor and obtaininformation based ontheir unique criteria(e.g. medicaldirectory)

Transact:allow users to search for and purchaseproducts/services AND submitinformation to be processed (e.g. fillin and pay tax)

Figure 4.1: Basic service typology

GP registration

What citizens believe they are most likely to do electronically in three years’ time (2003) (per cent)

Benefit inquiries

Council taxpayments

Voting

Car tax payments

School information

0 2010 30 40

People with current Internet access People without current Internet access

8 8

8 11

1115

15

16

16

17

20

15

Figure 4.2: Online transactions with government will be acceptable

Source: KPMG, Financial Times, May 2000. Sample: 2,115

ESD will improve the qualityof existing services4.4 It may be published or interactiveservices that ESD can most quickly improve,and most people envisage first using ESD forservices of this sort.6 Citizens are positiveabout the use of new technology for thesetypes of service:

‘‘It will be good for information.’’

‘‘In getting information this will be betterthan traditional methods.’’ 7

‘‘It’s a lot quicker on the Internet than itwould be in a telephone conversation.’’ 8

Encouragingly, as shown in figure 4.2,recent polling suggests that citizens areready to contemplate transacting online inthe near future.

4.5 All services can be enhanced by theuse of ESD. Table 4.1 sets out examples ofenhancements to existing services thatare already taking place in this countryand abroad.

4.6 As this shows, useful public services arealready being electronically delivered in theUK. In response to the targets that have beenannounced, advances are being made acrosscentral government. Other examples ofprogress within UK government havealready been set out in table 1.1.

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6 See, for example, View from the Queue. Cabinet Office/BMRB Research. October 1998. p20.7 C1C2 females, 35+, active Internet users in What’s in IT for the Citizen? Delivering Public Services through Electronic Channels.

Research conducted for PIU. MORI. April 2000. p22.8 C1C2 male, 25-34, active Internet user ibid.

Example Area Internet Location Example of Enhancing Service

Citizens can get job information, newsand articles relevant only to thememailed as soon as they becomeavailable.

Additional transactional services aredeveloping.

Displays job vacancies online.

e.g. www.monster.co.uk /www.jobsite.co.uk (interactive and,sometimes, transactional)

www.employmentservice.gov.uk(published)

Employment

Citizens can set up benefits to be paiddirectly into their account by the State,removing the need to go out andcollect them.

www.centrelink.gov.au (transactional)Benefits

Parents can apply for school places fortheir children.

www.ecitizen.gov.sg (transactional)Education

Citizens can type in symptoms toreceive preliminary advice.

www.nhsdirect.nhs.uk (interactive)Health

Table 4.1: Examples of services enhanced through ESD

4.7 Away from central government, somelocal authorities are making very goodprogress in using new technology to deliverbetter services. For example, Lewisham (www.lewisham.gov.uk), Knowsley (www.knowsley.gov.uk), Newham (www.newham.gov.uk) and Bristol (www.bristol-city.gov.uk) have allintroduced innovative services. For example:

• Lewisham Council is using ICT tointegrate its back office as a foundation forbetter service delivery. It is pushing aheadwith its ‘integrated service prototype’ –enabling joint working between councilstaff and the Benefits Agency.9 Like otherauthorities, it takes part in projects like theNational Land Information System (NLIS)and NHS.net, which require data sharing

between local and national government.Lewisham has also used new technologyto transform its approach to serving thecitizen. It has moved from a traditionalsystem of junior staff facing the customerwith managers in the back office to moresenior staff in customer-facing roles,supported by junior staff and electronicsystems. ‘‘Front line staff can championthe customers … they can quickly respondby chasing customers’ queries across thedifferent systems.’’10

• Newham Council is using technology tosupport one-stop Local Service Centresand a single call centre. The call centre isalready being heavily used for a variety ofservices. Requests for information make upthe bulk of calls, and the centres are used

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Example Area Internet Location Example of Enhancing Service

Citizens can plan a rail journey andpurchase the ticket for that journeyonline.

www.thetrainline.co.uk (transactional) Travel

Citizens can pay money from theiraccount into somebody else’s accountonline, without having to write andsign a cheque.

e.g. www.firstdirect.co.uk;www.smile.com (transactional)

Banking

Contains links to government sites,many of which offer information forfree which, for example GovernmentWhite Papers, would cost money ifpurchased physically.

www.open.gov.uk (published) Officialinformation

Citizens can request garbagecollection.

www1.maxi.com.au (interactive) Environmentalservices

Citizens can pay multiple bills (energyand water) in one go.

Citizens can pay parking fines online.

Citizens can fill in and send self-assessment forms online with a £10discount for doing so.

www1.maxi.com.au (transactional)

www.ci.boston.ma.us (transactional)

www.inlandrevenue.gov.uk/sa(transactional)

Taxation, billsand fines

Table 4.1: Examples of services enhanced through ESD – continued

9 Where it’s @: Lewisham’s strategy for getting connected. Dave Sullivan and Barry Quirk. 2000. p26.10 Lesley Burr, Head of Public Services in Lewisham, conversation with PIU. June 2000.

particularly by those seeking advice onbenefits or council tax.

4.8 ESD therefore presents a majoropportunity to enhance existing services, butperhaps even more significantly, it allowsnew services to be created, which could notbe delivered via traditional channels.

… and lead to the creation of wholly new services4.9 Government can use ESD to exceedcitizens’ expectations, but to do so, it mustsystematically create and develop newservices. At the moment this process is verymuch in its infancy, but examples include thefollowing types of service:

• Matching: services matching up citizenswith specific services and other citizensrelevant to them at a particular time andin a certain area;

• Personalising: services that areformulated for the needs of a singleindividual and no one else. The individualor the service provider can shape them;

• Pulling together: services that bringtogether in one place information onand services relevant to an issue or groupof citizens;

• Democratising: typically services thatallow citizens to express views. In theNetherlands, improved citizen participationin government is at the core of the e-government strategy.11 In the UK,Lewisham, for example, recognises ‘‘realprospects for substantive and short orderchange to enliven local civic life by usingweb-based technologies to enable swiftand effective connection, communicationand dialogue between local politicalgroups, community associations andrelevant actors.’’12

4.10 As an illustration, table 4.2 shows newservice ideas under each of these headings.

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Sort of Service Examples

Education opportunities matcher: matches up, for citizens, the educationalopportunities in their area and on the Internet (including, for example, onlinemock tests in anticipation of a child, for example, taking GCSEs).

Health opportunities matcher: uses the population’s health records to identify trendsand statistical correlations. Could then apply them to individuals to give advice onhow to prevent illnesses and conditions they might be more likely to get.

For citizens, matches the health care opportunities in their area and on theInternet relevant to them (perhaps on the grounds of age and medical history).

Enables citizens to send symptoms over the Internet when booking an appointment,so that a doctor can start thinking about diagnosis before appointment.

Consumer affairs infrastructure matcher: informs citizens about local companies. Itcould also provide a link between citizens with similar experiences or those whowant to learn from others. For instance, www.improveline.com recommendsbuilders and associated professionals in specific areas, having screened themthrough a four stage scrutiny process of credit history, legal history, years inbusiness (no less than two) and customer comments.

Matching

Table 4.2: Examples of innovative services

11 Interview with Daphne de Groot of Ministry of the Interior, Netherlands Government. The Hague. 15 May 2000.12 Where it’s @: Lewisham’s strategy for getting connected. Dave Sullivan and Barry Quirk. 2000. p15.

4.11 However, if government is to developideas in the best way for its client groups,then it must systematically understand theneeds and preferences of these groups, and

the impact on citizens of what it does offer.It could, for example, make use of thePeople’s Panel (a representative sample of5,000 people) to begin to do this.

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Sort of Service Examples

Tax/licences. Single Government Account: enables individual citizens to monitorwhat they have paid to government and what they still owe, and to pay it (forexample, income tax, Council Tax, TV licence, fines, etc).

Online voting: enables citizens to vote for their constituency MP from anywherein the country, or abroad, through the Internet. The tally is instantly countedby computer, allowing a longer time period in which citizens can vote. Forinstance, electronic voting was used in the Arizona Democratic primary in theUS in March 2000. It increased turnout by 600%.

Online policy units: involve citizen groups in policy formulation. This could, forexample, allow those with an expertise, not formally tapped by government, toget involved and influence better policy formulation.

Democratising

The personal Budget: informs citizens, comprehensively, how the Budget willaffect their core financial status.

Proactive information gathering and service delivery: Finland’s tax proposal servicedraws together all relevant information on the citizen (from banks andinsurance companies) then completes that citizen’s tax assessment form andpresents it to the citizen as a proposal, requesting signature.

Segmentation-centric data collection: A service that pulls together all governmentservices relevant to a group, such as older people, e.g. www.seniors.gov(Access America’s seniors’ site). Draws together information and transactionalgovernment services relevant to older people.

Pulling together

Location-specific information provider: informs citizens as they travel, for example, ofthe up-to-the-second integrated transport information relevant to their time andplace. This could, for instance, help the citizen choose between different modes oftransport. It could possibly be delivered through a mobile phone.

Portal personal profile: a personal profile held by the government but monitoredand updated by the individual citizen. This can be sent anywhere as a certifiedstatement of personal details, for instance when applying for a passport – savingthe citizen and the Passport Agency effort.

Personal government champion: an individual within government who could, as aresult of intranet capability, pursue a single citizen’s best interests through centraland/or local government. Through the Internet (as well as by phone) he/she couldinteract with the citizen and preside over the delivery of services to that citizen,being proactive as well as responsive in attending to the needs of the citizen.

Online monitoring capability: individual citizens can monitor data held on them bygovernment and can monitor progress made in delivering a service.

Personalising

Table 4.2: Examples of innovative services – continued

4.12 Government therefore has the chanceto increase citizen satisfaction and improveits reputation for service delivery. The natureand scale of this improvement could changethe relationship between government andthe citizen.

The relationship betweenthe citizen and state will bechanged fundamentally as a result4.13 Besides radically improving servicedelivery, ESD can have a fundamental effecton the relationship between government andcitizen. Some in consumer groups see this asa revolutionary opportunity:

‘‘There is a chance to create a positiveinequality in the relationship between citizenand government in this context – with powershifted to the citizen.’’13

4.14 Firstly, new technology can enablecitizens to monitor, access and even alterdata that government holds on them. ESDraises many questions about the use ofpersonal data by government but it alsoprovides an opportunity for unprecedentedtransparency and openness.

4.15 Secondly, ESD technology will also makepossible new democratising services (seeparagraph 3.10). These will enable citizens tobe consulted more frequently and effectivelyon a range of issues. Practical implementationwill require much thought, since citizen andgovernment alike could abuse the option forfrequent mass opinion gathering; and onlywith essentially universal access does electronicvoting become legitimate.

4.16 However, these benefits to theconsumer are only one part of the story.The second is the benefits to the taxpayerthat ESD can bring.

ESD will improve value for money for the taxpayer4.17 In two ways, digital technology canbe a key enabler of the UK Government’smodernising agenda, making governmentmore productive and reducing theadministrative costs of the state:

• by redefining delivery networks.If traditional physical networks can bescaled back, then substantial savings canbe generated;

• by benefiting from new partnerships.Opening up its information assets canreduce the workload of government inunilaterally handling information andmanaging risk on behalf of the citizen.Innovative partnerships between thepublic, private and voluntary sectors canthen be formed, reducing governmentdelivery costs further.

Transforming existing physical channels…4.18 Government has for a long time usedlarge physical networks to deliver its services.Some of these are formal, like benefit offices;others informal, like community pharmacies.The new technology changes the logic forsuch networks. Many of the services presentlydelivered via physical networks could bedelivered electronically, and as figure 4.3suggests, this could be very much cheaper.

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13 Anna Bradley, Director – National Consumer Council (NCC). 1st Advisory Group meeting of the ESD Project. 24 February 2000.

4.19 As a result of ESD, it will increasingly bepossible to create long-term cost savings byrationalising traditional networks. In somesectors, ESD-related rationalisation of physicalnetworks is already happening in the UK.

• Banks: Use of high street bank branches isdeclining. For example, the proportion ofBarclays customers using a branch for day today transactions fell from 56% in 1994 to36% in 1999. Banks are now examining thefuture of their networks: between December1989 and December 1999 the number ofbank branches in Britain fell from 17,100 to12,144.14 The impact of telephone andonline banking is a key factor.

• Local government: Newham hasdecided to replace existing physical outletswith six one-stop shops (scattered aroundthe borough) and one central call centre.15

4.20 All will benefit from changes to the faceof the state – whether these are channelledinto better, more efficient services or alightening of the tax burden.

… and opening newopportunities for partnership working4.21 An important function of governmenthas been to collate, analyse and applyinformation for a variety of purposes,including determining and pooling risk onbehalf of the citizen. By enabling low cost,immediate access to that information, newtechnology has reduced the need for thisrole. In a variety of areas, individuals areincreasingly able to carry out the taskthemselves, assisted by private sector playerswho can bundle and manage information.This increased access to better informationmeans that there are fewer market failuresrelating to individuals’ inability to assess riskon their own. There is therefore a reduced rolefor government, and hence reduced costs.

4.22 Successive governments have had tothink about the most effective way to paythe large and increasing cost of running theWelfare State. However, government’s

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Counter

ATM

Internet

$0.00

a) Cost of a typical banking transaction

$0.50 $1.00 $1.50

Travel agent

Internet

$0.00

b) Cost of a typical travel reservation

$5.00 $10.00

$1.07

$0.27

$0.01

$10.00

$2.00

Figure 4.3: Online transactions are very cheap

14 HM Treasury figures. June 2000.15 Interview with Simon Norbury, Assistant Chief Executive Officer (IT and Business Management) Newham Council. Newham.

3 March 2000.

Source: based on information from Lucent Technologies marketing costs; Help Desk Institute; Technical Assistance Research Program (TARP);

Purdue University Centre for Customer Driven Quality – analysis by TARP and Andersen Consulting.

non-physical assets (information andknowledge) have remained largelyuntouched by the changes of the 1980s and1990s. There is a real opportunity for thetaxpayer to obtain significant benefits fromnew kinds of public private partnership andthere are already several examples of howsuch partnerships might look.

4.23 The potential is widely acknowledged.‘‘Already leading governments around theworld are placing services online and forgingalliances with outside providers to acquirethe necessary technology and capability.’’16

For example, ‘‘all information produced bythe federal government [of the United States]is made freely available to the private sector –to repackage and sell on in innovative ways,which could add value for the customer.’’17

4.24 Companies can profit from playingvarious roles. Table 4.3 sets out someexamples internationally, which include:taking on non-core back-office services;reformatting information for the government;and relieving demand on public services.

4.25 There are opportunities for cost savingsand extra revenue for government as well.For example, it can make savings fromoutsourcing work; it can sell its information;and it can allow advertising on its web-sites.These are sometimes contentious options,but they highlight the potential that ESD hasfor providing government with new fundingstreams.

4.26 Whatever form it takes, such aredefinition of the role of government couldmake it possible for government to savemoney in the long term while dramaticallyimproving services. Furthermore, such atransformation of government could affectthe performance of the UK economy,especially in e-commerce.

ESD will support improved economic performance4.27 The overall impact of the Internet oneconomic performance is still being debated,but it is clear that the greater transparency inmarkets that it brings and the reductions insearch, transmission and inventory costs arefacilitating competition, stimulating innovationand driving down prices. It is also clear thatinnovation and research and development, asexemplified in the ICT sectors, are key driversof long-term growth.

4.28 While these are processes essentiallyof the private commercial sector, thegovernment also has a role. The Internetwas created and developed in public sectorsaround the world and the British governmentcan continue to provide impetus to itsdevelopment. Through implementing its e-strategy, government can make a majorcontribution to raising productivity in theentire British economy.

By helping to raise investment levels…4.29 Closing the UK’s investment gap withEurope and the US is an important driver ofgovernment economic policy. It can do thisthrough public investment and by creatingnew investment possibilities for the privatesector. While much new public investmentwill be in traditional public infrastructure, ICTinvestments will also be significant. Throughpublic private partnerships, government canshare its investment opportunities.

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16 Vision 2010. Forging tomorrow’s public-private partnerships. Economist Intelligence Unit and Andersen Consulting. 1999. p2.17 E-commerce@its.best.uk. Report by PIU. September 1999. p95, paragraph 11.21.

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Example Comment Financing/revenue

Revenue is secured bywinning bids forgovernment portals,through standardtendering process. It thenuses ‘‘fixed price,transaction-based and gainsharing contracts.’’21

NIC, formed in 1991, is one of the older e-government companies. The company buildsenterprise portals for a range of US states. It offersbusiness-serving applications, as well as services forthe citizen, including:

• car registration;

• income tax filing;

• legislative tracking systems;

• election results monitoring;

• public meeting calendar;

• state court information systems.20

NationalInformationConsortium (NIC)

Main revenue to comefrom selling software.

Convenience chargeslevied on citizen orgovernment, when agreedby Ezgov and thegovernment in question.

Monthly subscription feescharged to government forweb-hosting.

Ezgov.com, founded in early 1999, is essentiallya software company. It ‘‘develops and supportstransactional Web applications for local and stategovernment agencies’’19 and through its web-site,gives information on all aspects of government.It does also host clients’ web-sites, processingpayments and reporting transactions. It allowscitizens to:

• pay parking and traffic tickets;

• renew car registration;

• renew and pay drivers licence;

• contribute to political candidates;

• obtain building permits.

Ezgov

The system was built at atotal cost of A$10m, butno cost to thegovernment.

However, for each serviceaction carried out via Maxithe government is charged80 cents to A$2 by NEC.

Maxi was launched in December 1998 as a one-stop shop delivery system, bringing togethergovernment services through telephone (interactivevoice recognition), Internet and public kiosks.It offers seven types of service:

• making a payment;

• acquiring a product;

• booking a service;

• changing customer details;

• monitoring progress;

• providing customer feedback.

In procurement, the tender required ‘‘a system[that] could support multiple agencies at differentlevels of government, as well as multiple deliverychannels.’’18

MAXI

Table 4.3: International examples of private sector involvement

18 E-Government – an international study of online government. Kate Oakley, commissioned by Cable and Wireless Communications.

February 2000. p14.19 www.ezgov.com20 Citizen-facing government portals: profiles of an emerging provider class. Dataquest. 10 January 2000. p8.21 Ibid.

…encouraging enterpriseand innovation…4.30 By opening up markets for newelectronic services, government can stimulateinnovation. By improving its capacity to workwith smaller businesses it can ensure thatindustry incumbents are challenged to remaincompetitive. Recent work by the OECD(1997) highlights the impact on productivitygrowth that the entry of new innovative firmscan have. Evidence from Italy in the 1980sand the US in the 1990s suggests that it isnew, high technology businesses thatgenerate growth in high quality employmentand output. Moreover, a combination ofappropriately priced access to governmentinformation and electronic access togovernment will provide the demand for ahuge range of potential new services whichwill generate employment, income andinternational demand.

…improving skills…4.31 Electronic government service deliveryhas to be accompanied by a universal policythat ensures that all members of society havethe skills and the equipment to participateequally. This nation-wide stimulation of ICTskills, already beginning through IT learningcentres, libraries and subsidies for equipment,will enable the country to access all Internetservices. Direct government demand for ICTservices, to develop intranets and web-sitesand transform its databases, is helping todevelop skills in a sector which has hugeexport potential. The greatly enhancedpotential for collaboration between publicand private sectors presented by ESD canhelp diffuse skills and technology throughoutthe economy – from private to public sectorand vice versa.

…promoting competition and cleartechnical standards…4.32 By creating market opportunities innew government services in such a waythat incumbent firms do not have an unfairadvantage, government can ensure a soundlycompetitive basis for this important newsector. Clear technical standards (e.g. forsecurity and data protection) for its ownservices will be an important contributionto promoting that competition and mayinfluence the setting of standardsinternationally.

…and so raising public sectorproductivity and the sustainable rateof UK economic growth4.33 The introduction of new ICT will be thevehicle for comprehensive modernisation ofgovernment, with the potential to improvepolicy-making and reduce administrativeinefficiencies. Public private partnerships forESD will enable government to learn andbenefit from the skills and managementmethods of the private sector. And togetherthey can work not only to reduce costs butalso to improve outcomes. Ultimately, ifpublic sector productivity is increased, thisraises national productivity. The result – ahigher sustainable, non-inflationary rate ofeconomic growth.

4.34 In summary, this chapter has shownsome of the ways that ESD can benefit thewhole of the United Kingdom. It can delivernew and improved services to the citizen.It can drive forward a major and innovativemodernisation of government and,consequently, it can help the UK’s economicperformance. Realising these benefits will notbe easy. Barriers exist that will have to beovercome, within government and amongstcitizens. It is to these, and the options forbreaking them down, that we now turn.

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5.1 There are many possible concerns aboutthe vision that we have set out. Ifgovernment follows the principles set out inthe vision, then both service improvementsand cost savings are genuinely achievable.However, poor implementation could leadto the very opposite: services that are nobetter, and no more efficient, despite theheavy investment made. This chapter setsout concerns about the current positionand about the vision and its achievability.It explains the challenges that thisreport addresses.

Government services are complex…5.2 The public sector has a significant rangeof very different services provided to verydifferent client groups. On one analysis bythe IDeA, from an information managementperspective a typical unitary local authorityhas 706 functional areas, compared toaround 12 in a typical bank. Not only is there

a large number of services, but these forma very diverse collection.

5.3 The previous chapter outlined a basictypology of published, interactive andtransactional services. A simple split of themore interactive part of this spectrum showsthat major areas of government service are:

• collecting tax and revenue – such asincome tax, council tax, and parking fines;

• paying benefits and allowances – such ascouncil tax benefit, job seeker’s allowance;

• issuing permits, passes and licences – suchas driving licences and passports; and

• providing ‘content rich’ services – such aseducation, health, personal advice.

Within each of these categories, there maybe a significant number of very differentactions. For example, obtaining health caremay involve arranging an appointment,visiting a doctor in person, obtaining aprescription and obtaining a drug. The

5. MEETING THE CHALLENGE OF ELECTRONICSERVICE DELIVERY

Summary

The benefits of ESD are real and achievable. However, there are majorchallenges to be overcome by government if it is to realise these benefitsfor the citizen and the taxpayer.

These challenges fall under three headings:

• reaching the citizen;

• involving the private and voluntary sectors; and

• organising government to deliver.

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potential uses of ESD at each stage may bevery different.

5.4 The implications of this number andrange of services are profound. Bringingdifferent types of services online may presentvery different challenges. For benefitpayment, security considerations are critical,and there is a need for strong authenticationthat the applicant is not posing as anotherperson. For services where human interactionis crucial, a greater difficulty may be toestablish how ESD can best be used in support.

5.5 Government therefore faces a verydifficult challenge in bringing such a widerange of complex services online. It istherefore perhaps not surprising thatprogress has been patchy.

… Government online is at anearly stage …5.6 Government remains some way fromrealising the potential of ESD. At the end of1999, the NAO report, Government on theWeb found ‘‘the provision of [web] sitefacilities still in its infancy’’, and thatgovernment web-sites are information giving‘‘but have few more advanced features orinteractive capabilities’’. It noted that‘‘responses … to the development of theInternet and the Web have been patchy andrelatively slow’’.22

5.7 Truly transactional citizen services haveonly begun to be developed with theintroduction by the Inland Revenue of self-assessment tax returns. The latest monitoringreport on electronic service delivery showsthat 152 of the 457 services detailed incentral government departments’ servicedelivery agreements were availableelectronically.23 Around 50 of the 152 are

services direct to the citizen and at most fourof those 50 transactional.

5.8 In local government, a number ofauthorities have developed sophisticated,attractive and useful sites. Even so, fullytransactional services are few and far betweenand progress remains mixed, with a numberof authorities continuing to have no onlinecapability at all. Of the 467 local authoritiesin the UK, 401 (86%) have web-sites.

• 58% are promotional

• 34% are content (some interaction)

• 8% are content plus (advancedinteraction)

• 0% are transactional24

… and government is not wellplaced to take advantage of new technology5.9 Government is not well placed to takeadvantage of the current wave oftechnological innovation, nor to realise thebenefits that it might bring:

• parts of government still see ESD asan optional extra, not as central to itsbusiness. Many senior managers stillsee it as ‘about IT’ rather than abouttransforming the service that citizensreceive from government. This makesfundamental change difficult to achieve;

• some key services to businesses (rightlyidentified as demanding ESD earlier thancitizens) are now online, but comparativelylittle effort has been made to improveoutcomes for the citizen. According to thelatest returns, some 32% of services areonline, but this includes no transactionalservices and (with very rare exceptions,such as NHS Direct) few of government’skey citizen services are available as yet;

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22 Government on the Web. NAO. December 1999. p3.23 However, note that this list of 457 services is still believed to be incomplete.24 Better Connected? A year 2000 snapshot of local authority websites. SOCITM and MAPIT. Spring 2000. p3.

• government finds it almost impossible toact at the speed that would allow it tomatch the best of the private sector. Thatmatters because it opens up a huge gapbetween what the consumer expects andwhat the government delivers;

• the scale and complexity of government,together with its multiple accountabilitiesmean that a coherent whole is difficult toachieve. Service providers have typicallybegun by working alone. The result isconfusing to the user, and missessignificant economies of scale and networkbenefits. There is currently a danger thatthe government’s web presence will largelyreflect its silos, rather than customer needs;

• government is not used to developingInternet services. Beginning with rapidprototype development rather than majorprocurement exercises is essential. So isthe spirit of making rapid progress despiteuncertainty, learning from experience andmodifying the service as a result. There arecurrent examples where uncertaintiesabout technology, or identifiable futurechallenges (like the need for strongauthentication) have blocked actionaltogether;

• government is used to working with large,established companies, but not with thesmall, newly formed dot.com start-ups.It needs new ways of working if it is toobtain the benefits of involving the newprivate sector companies that lead the wayon the Internet; and

• there is as yet no coherent programmethat will promote use of electronicservices. There are many valuableinitiatives under way, but it is not clearthat together these will deliver the highuse of ESD necessary to achieve thepossible benefits.

5.10 Moving from this position to thatoutlined in the vision will be problematic.

The challenges that government faces are thesubject of the next section.

Government must address anumber of challenges if ESDis to be a success5.11 If government is to achieve the visionof improved services more efficientlydelivered, then it must take steps toovercome a number of barriers. Otherwisethe nightmare scenario of high investmentwithout improved services will not beavoided. We have grouped the concernsas follows:

• concerns from the citizen’s perspective –such as equity, quality of service, access;

• concerns about the involvement of theprivate and voluntary sectors;

• concerns about government’s capacityto deliver.

We take each of these in turn.

Citizens must want and be able to useelectronic government services …5.12 Government would achieve neither costsavings nor service improvements if peopledid not choose to use its electronic services.Additional electronic channels are simplyadded cost if existing physical channels arenot scaled back. And whilst high qualityelectronic public services may be a huge stepforward for government, people will notexperience these improvements unless theyuse the electronic services.

5.13 Confidence in government’s ability todeliver is very low. There is a real prospectof low service use unless specific measuresare taken to generate use. Not only are thereconsiderable divisions in levels of access totechnology between social groups, but alsothe highest users of government services are

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often less likely to possess digital technologyand the skills to use it. There are several keyobstacles to be addressed before people willchoose to use government services. These arediscussed more fully in the next chapter.

… private and voluntary sectorservice providers must play anintegral part …5.14 There may be concerns about theinvolvement of private and voluntary sectororganisations in acting as delivery channelsfor government services. Some of theseconcerns are clearly valid: people will wantchoice about the use to which personal datais put, for example. Equally, there must beclear rules about what is a legitimate site forthe delivery of government services, the useof advertising, how the government serviceis presented and so on. However, we do notbelieve that a general concern about theinvolvement of third parties is justified, ifthese other concerns are met.

5.15 What matters is what most effectivelyand efficiently delivers the government’sobjectives. On a case by case basis,government should choose between public,private and voluntary sector solutions on thebasis of benefit to the client group and coststo the taxpayer. There is a clear benefit to thegovernment if it can avoid some or all of thecosts normally associated with its deliverynetworks. If non-governmental providers willcompete to provide a channel between thecitizen and the state for government services,then the taxpayer will benefit from lowercosts, and the service user from higherquality, driven by competition.

5.16 ESD offers the opportunity for a newand potentially more beneficial relationshipwith third parties. Firstly, as the private andvoluntary sectors act as intermediariesbetween the citizen and the state,

government can reduce expenditure on itsdelivery channels. Secondly, there will be realcompetition as soon as government allowsaccess to its information, with the expectedbenefits to the citizen.

5.17 Government will not withdraw fromcertain functions, as has tended to be thecase in privatisation and outsourcingarrangements. It will simply scale backphysical delivery networks, whilst retainingownership of its information assets andcontrol of its services. It will retainresponsibility for the key ‘back office’functions for each service.

5.18 Finally, government must take steps toensure that a marketplace does develop. If itdoes not, then government faces potentialproblems of slowed progress, with reducedbenefits to the citizen and reduced costsavings. Problems would arise if, for example,third parties were unable to gain access togovernment information. Equally, a failure toregulate the emerging market adequatelymight mean that citizens did not trust thirdparty providers, or lost confidence ingovernment services. The government needsto take steps now to prevent either scenariofrom taking place. These issues areconsidered further in chapter 7.

… and government departments andagencies need the incentives andorganisational structures to deliver5.19 A further set of concerns relates to thegovernment’s ability to deliver. We havegrouped concerns about government’scapacity to deliver under two headings:

• technological concerns; and

• other concerns about government.

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There are concerns about government’sability to manage IT projects ...

5.20 Government’s poor record of managingmajor IT projects means that the need foressential changes to the back office presentsa very real threat. The recent review ofgovernment IT projects25 has set out keyfailures in the past, and produced detailedrecommendations setting out whatgovernment must do to avoid comparableproblems in future. We strongly endorsethese recommendations. They need to beembedded in all the projects that arebrought into being to implement ESD.

5.21 One important lesson is thatgovernment must not regard these projectsas essentially technological. If ESD is seen asprimarily an IT issue (as appears to be thecase in some service providers), then there isa risk that these problems could re-emerge.The same is true if the task is thought to bethe mechanistic achievement of the targetsfor availability, rather than the delivery of realbenefits to the citizen.

5.22 The resolution of the technical and ITissues facing government is not the focus ofthis report, which instead concentrates onthe wider challenges that government faces.Nonetheless, these issues are critical to thesuccess of ESD, and government must ensurethat it learns the lessons of the Review ofmajor IT projects if it is to be successful.

... and to cope with theorganisational challenge

5.23 Difficult though the technicalchallenges are, perhaps an even moreimportant concern is the enormousorganisational challenge for government.The scale of organisational change requiredmay be beyond anything government haspreviously experienced. This issue isaddressed in chapter 8.

5.24 This report considers specific problemsin all of these areas, taking as its themes:

• reaching the citizen: the actions neededto promote use of ESD;

• establishing a mixed economy deliverymarket: the actions needed to create themarket to implement the vision;

• organising to deliver: the actions neededinside government so that public sectororganisations can make the changesneeded to deliver.

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25 Review of major IT projects. CITU. May 2000.

6. REACHING THE CITIZEN

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Summary

None of the benefits of government ESD will be achieved unless allsections of the population use the services. The largest cost savings willcome from migration to ESD by high users of government services – butthese are often among the least able to access government electronically.

This chapter focuses on what government needs to do in order togenerate use of its services:

• enabling people to use electronic channels – many either do not haveaccess to the technology or do not have the skills to use it;

• putting services on channels that encourage use – at present, there isno clear strategy for deciding which services should be put on whichchannels;

• making government electronic services easy to find and use – manypeople are not aware of government services, cannot find them online,or find them difficult to use;

• making people want to use government electronic services –government needs to create trusted services that people want to use.

Key parts of the solution are:

• developing a strategy for prioritising channels;

• developing a strategy for the use of a variety of portals;

• generating trust in government services.

6.1 This chapter is about reaching the citizen– the challenges government must overcomeand the actions it must take so that peoplechoose to use its services electronically. Firstwe set the scene by looking at theimportance of reaching the citizen.

Reaching the citizen is crucialfor delivering government services electronically6.2 Electronic service delivery will onlysucceed if electronic services are widely usedby the citizen. For reasons of equity, thegovernment cannot allow disadvantagedgroups to experience less good governmentservices than advantaged ones. However, it isoften the disadvantaged who have the lowestlevels of access to electronic channels, andthe most need of government services.Government must ensure that this groupreceives the benefits of ESD.

6.3 Moreover, the potential efficiency gainsto government of ESD will only be achievedif take-up is high. Providing services throughadditional channels increases costs. Potentialefficiency gains will be realised only if it ispossible to some extent to rationalise otherchannels. That will require high uptake ofelectronic services.

6.4 However, government must overcomeobstacles to reaching the citizen. In thefollowing sections we consider the challengesthat government faces in generating use ofits online services. In summary, the keyones are:

• enabling people to use electronic channels– many either do not have access to thetechnology or do not have the skills to use it;

• putting services on channels thatencourage use – at present, there is noclear strategy for deciding which servicesshould be put on which channels;

• making government electronic serviceseasy to find and use – many people are notaware of government services, cannot findthem online, or find them difficult to use;

• making people want to use governmentelectronic services – government needs tocreate and market trusted services thatpeople want to use.

6.5 We consider these challenges in order,beginning with access.

People need the skills andequipment to access and use electronic delivery channels6.6 Achieving universal access to digitalchannels and to the Internet in particularis clearly essential to achieving high use ofelectronic government services. The first partof this section sets out the actions alreadyin hand to deliver universal access, whichalready form a coherent universal accessstrategy. The second part of the section setsout recommendations from the PIU teamfor building on this sound base.

6.7 The Prime Minister announced on7 March 2000 the goal of achieving universalaccess to the Internet by 2005.26 That targetwill be met through a wide range of measuresto promote the use of a number of channels,including, for example, PC, digital TV andmobile devices. Government is already takingaction to make it possible for people to usethe Internet through all these routes.

6.8 There is a significant number of accessinitiatives already under way (including, forexample, actions flowing from the Closing

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26 Prime Minister’s speech at the Knowledge 2000 Conference. 7 March 2000.

the Digital Divide28 and Achieving UniversalAccess29 reports). Moreover, the cross-cuttingreview of the knowledge economy, whichwas part of the 2000 Spending Review, wastasked with considering universal access(see table 6.1). The PIU team carrying outthis study was therefore asked not to focuson this issue.

6.9 These new proposals and the additionalfunding form part of a wider package ofmeasures designed to achieve theGovernment’s target of universal access tothe Internet by 2005. The UK online report,published in tandem with this one, sets outa full account of ongoing and plannedgovernment actions, showing a widerange of activity across central and localgovernment, to promote use of the Internetthrough the full range of channels.

6.10 Building on the PIU report e-commerce@its.best.uk, the strategy setout in the UK online report tackles the keybarriers to use of the Internet, which are:

• easy, affordable access to channels;

• the skills to use the technology;

• the motivation to use the Internet; and

• trust in it.

In each of these areas, government has putin place a range of measures, which are setout fully in the UK online report, andsummarised in table 6.2.

6.11 This wide-ranging set of measures willpromote access to the Internet across a rangeof channels, and it is critical that the strategyis driven forward effectively. In consideringthe actions necessary to deliver high use ofgovernment services, the PIU team hasidentified three areas within the strategywhich deserve further attention:

• given the large number of initiatives underway, there is a need to ensure that theyare well co-ordinated so that they deliverthe target of universal access tothe Internet by 2005;

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Universal access was a key theme of the cross-cutting spending review of the knowledgeeconomy, to which the PIU team contributed. Specific proposals to achieve access weregiven new funding. These are:

• piloting of initiatives for post offices to provide people with new opportunities to usethe Internet (Internet learning and access points), as proposed by the PIU reportCounter Revolution: Modernising the Post Office Network;27

• promotion of ICT skills through DfEE programmes: target of 75% proficiency at age14, and further rise in the PC:pupil ratio; wiring up communities to build ICT skills;progressing Individual Learning Accounts to provide discounts on ICT training; launchof the University for Industry. A DTI programme to promote ICT skills in small- andmedium-sized enterprises also funded;

• a new DTI team to plan work on building consumer trust and developing cross-borderhallmarking;

• DfEE’s online learning programme, to promote more social content on the web.

27 http://www.cabinet-office.gov.uk/innovation/2000/postoffice/postindex.htm28 Closing the Digital Divide: ICT in Deprived Areas. Policy Action Team 15, DTI. November 1999.29 Achieving Universal Access. Booz-Allen and Hamilton. March 2000.

Table 6.1: Universal access in the knowledge economy spending review

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Access to channels – from home, from work, in the community

Access from home

• Government is working with industry to open up a full range of access channels,including digital TV and mobile communications.

• The Government is using tax incentives to encourage employers to provide PCs andInternet access for their employees at home.

• Government departments are looking closely at the costs and benefits of low cost PCleasing schemes for public sector employees.

• Government is providing low cost recycled computers for 100,000 low income families.

Access at work

• Government is actively promoting the benefits to employers of providing all employeeswith Internet access at work.

• All government departments are addressing the question of full Internet access for allpublic sector staff as part of their e-business strategies.

Access in the community

• Government is establishing a network of UK online centres in three phases, with around700 open by March 2001.

• All public libraries will offer Internet access supported by trained staff by 2002.

• Government is investing in piloting new initiatives for post offices to help people toaccess and use the Internet.

Skills to use the technology – in the education system and throughlifelong learning

In the education system

• The Government is investing to give 14 year olds a high standard of basic IT skills.

• In schools and further and higher education the Government will be investing in ICTinfrastructure including almost £250 million on the National Grid for Learning in2001–02; and there will be a substantial increase in future years.

• £230 million will be invested over several years to improve ICT skill levels amongeducators.

• Government will stimulate high-quality online educational content.

In lifelong learning

• £84 million will be invested in the development of the University for Industry (Ufi) in2000–01. By 2002, Ufi will have 2.5 million users of its learndirect service per annum.

• The Government will offer free ICT taster courses to unemployed people.

• By September 2000, there will be 80% discounts for computer literacy training for thosewith Individual Learning Accounts.

Table 6.2: The access strategy

• digital television will be an importantaccess channel, particularly for users ofgovernment services, and it is critical thatgovernment takes action to ensure thatthis is used as effectively as possible; and

• there is an identifiable group of peoplewho will probably never use online servicesthemselves. It is critical that measures areput in place to enable them to benefitfrom government ESD.

These three areas are the subjects of theremainder of this section.

Existing initiatives to promote accessmust be better co-ordinated6.12 It is easy to identify the problems thatmust be overcome to achieve universalaccess. Technology must be made availableand affordable, people must be able toacquire the skills to use it and must feel thatthe channels are relevant and trustworthy.More specific barriers affect certain groupsdisproportionately, e.g. absence of a hometelephone connection (between 5% and 10%of households30); lack of a bank account(2.5 to 3.5 million people31); basic literacy

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• The New Opportunities Fund will fund high-quality lifelong learning content throughUK online public libraries.

Motivation to use the Internet – by driving up the amount and quality ofsocial content

• Government is emphasising the importance of strong plans for developing local contentwhen assessing bids from local partnerships bidding to run UK online centres.

• Government is considering how best to work with creative industries to explore newways to stimulate the development and availability of high-quality cultural content fora range of audiences.

Trust in the Internet

Government is promoting trust in the Internet by:

• working as part of the Internet Watch Foundation to protect children from unsuitablecontent on the Internet, and building on its work by agreeing with others andpublicising a set of best practice self-protection tips for parents and children;

• endorsing Trust UK as a means for fostering consumer trust and confidence in Internettrading, publicising its work and developing with it a consumer trust standard for useby government departments transacting online;

• reducing the scope for online fraud, by working with the credit card industry to establishan address verification scheme applicable for online credit card transactions by the endof 2000. Government is also continuing to work to develop the t-scheme, as a means ofensuring privacy, security and authentication on the Internet;

• combating the use of the Internet for criminal activity by the introduction of theRegulation of Investigatory Powers Bill.

30 Closing the Digital Divide: ICT in Deprived Areas. Policy Action Team 15, Department for Trade and Industry (DTI). November 1999.

Section 5 on web-site.31 Access to Financial Services. Report of Policy Action Team 14. HM Treasury. November 1999. p42.

Table 6.2: The access strategy – continued

problems (up to 20% of people32); and theneed for people to be able to interact in theirown first language.

6.13 Government must tackle this set ofbarriers. Research by Booz-Allen,33 broadlyin line with other projections, forecasts thatwith no government intervention, marketgrowth will result in some 60% of the adultpopulation using the Internet by 2003. Thismeans that considerable intervention isrequired to meet the 2005 access target.The initiatives identified above cover someof the key questions of skills and access totechnology. However, government does notyet have a coherent programme forsystematically identifying and addressingeach problem as it affects each citizen group.

6.14 As recommended inE-commerce@its.best.uk,34 government isdeveloping such a programme moreexplicitly, to ensure that it is addressing thechallenges in full and as efficiently as possibleto meet the 2005 target. The UK onlinereport sets this out more fully. In centralgovernment, co-ordination should be led byone of the key players, who would be taskedwith ensuring that a coherent programmeexists to deliver the target and achieveeconomies of scale across government.The role of local government will also beimportant, and there would be merit ingiving the Government Offices in the Regionsan enhanced role to ensure that local andnational initiatives join together effectively,and that local authorities achieve economiesof scale by working together.

6.15 Co-ordination should be light touchto avoid additional bureaucracy, and focusedon drawing together existing and plannedprogrammes to form a coherent programme.

Conclusion 1: DfEE, working closely withthe Office of the e-Envoy and otherDepartments, should take the lead inco-ordinating all community-basedaccess initiatives to ensure they form acoherent programme, as part of theoverall strategy to deliver universalaccess to the Internet by 2005. DfEEshould appoint a senior official to leadthis co-ordination function by autumn2000, and have a responsible ministerto oversee this work.

Conclusion 2: Government Offices in theRegions, working closely with DfEE,should take the lead in co-ordinatingpolicies on access at the regional andlocal level and integrating localgovernment policies with centraldepartmental programmes. Directorsof GORs should report on progressevery six months to the responsibleminister at DfEE, beginning March 2001.

The potential of digital TV to be a keychannel needs to be fully exploited6.16 Government has rightly identifieddigital TV as an important driver of access.Given the extensive penetration of television,DTV is likely to be a key digital channel inhomes. Market research suggests that peopleare more comfortable and need less trainingto use a television than a PC to accessinformation. This is in part reflected in thefact that a higher proportion of older peopleand lower income groups use DTV than usePC-based Internet. The total subscribernumbers are shown in figure 6.1.

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32 Fresh Start: Basic Skills for Adults. Report for the DfEE by Sir Claus Moser. March 2000.33 Achieving Universal Access. Booz-Allen and Hamilton. March 2000. p14.34 E-commerce@its.best.uk PIU. September 1999.

6.17 However, the benefits of extensive DTVpenetration in homes are only fully realised ifDTV offers full Internet access. As Chris Smithsaid:

‘‘Wouldn’t it be wonderful if, after switchover,we could guarantee … that every home inthe country with a television and a telephonecould have access to the Internet?’’

There are some encouraging signs that themarket will deliver this as competition forsubscribers increases. However, there areintricate competitive dynamics between thecommercial players. Some DTV suppliersalready offer Internet access through set-topboxes or have announced that they will doso. However, others do not and offer only alimited number of suppliers in a closed site.

6.18 Government has announced its plan toswitch off the analogue television signalbetween 2006 and 2010. Analogue to digitalswitchover and its precise timing will clearlyaffect the evolution of the DTV market.Against this background, government hasthree key objectives:

• Equity. Government will need to ensurethat current analogue viewers are notdisadvantaged by switchover. Given itsaccess objectives, government also wantsto achieve full Internet access throughDTV as soon as possible;

• Competitive markets. Governmentneeds to ensure that there are no anti-competitive outcomes in the DTV marketas a result of switchover;

• Economic benefits. Government shouldbalance the potential economic benefitsfrom the possible redeployment of releasedanalogue spectrum against the costsof switchover.

6.19 Government is keen to promote digitalTV for two reasons. First, it is likely to be animportant method for achieving the goal ofuniversal Internet access. Second, promotionof digital television will facilitate the eventualswitchover from analogue to digital. Furtheranalysis is needed on the degree to which it would be beneficial to link these two goals positively.

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4,000,000

3,500,000

3,000,000

2,500,000

2,000,000

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1,000,000

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0

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99

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99

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Jul 9

9

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Sky Digital OnDigital Digital Cable

Figure 6.1: UK digital TV subscribers

Conclusion 3: Government should workwith the private sector to encouragewidespread uptake of DTV and ofInternet access via DTV as animportant contributor to achievingthe goal 5 of universal Internet accessby 2005. This should be taken intoaccount in the work to prepare foranalogue switchover.

Innovative approaches are needed toensure access for those who can’t orchoose not to use electronic channelsthemselves6.20 Research suggests that there is anidentifiable group of people who willprobably never choose to interact withgovernment across electronic channels.Research35 suggests that in their attitudesto technology, citizens broadly divide intothree groups:

• firstly, two-fifths of adults, who arefavourably inclined to new technology,largely based on their general use andacceptance of it in their work, educationor leisure;

• secondly, a further two-fifths could bepersuaded, although about half of thisgroup would require incentives or activesupport and encouragement; and

• finally, just under a fifth, who generallyavoid new methods and are antagonistictowards them. The old and those in socialgroups D and E are disproportionatelyrepresented in this group.

6.21 It would be unacceptable if thosegroups who cannot or choose not to interactelectronically were unable to obtain thebenefits that government electronic serviceswill bring. There are two ways for this groupto benefit from ESD, without being requiredto use new technology themselves:

• firstly, some of the group will findtelephone contact convenient, and thisshould be developed to enable access togovernment services;

• secondly, others will prefer to deal withintermediaries face to face, as they tend todo now, and there needs to be a means ofenabling this group to benefit as well.

We take each of these in turn.

The telephone has a key role to playin supporting access…

6.22 The telephone remains a very popularchannel with citizens for communicating withgovernment (see figure 6.2). It can be usedas a channel in its own right, as a steppingstone for citizens between face to face andfull digital access, and as a support for otherchannels. It is likely to remain a key channelfor the foreseeable future.

6.23 There is a strong case for establishing across-government approach to dealing withthe citizen by telephone. There are alreadycall centre guidelines, but more generally, across-government approach would ensurethat call centres take account of citizens’preferences for joined-up services and thatthere is a mechanism for identifyingeconomies of scale, where they can beachieved. For example, there is considerableevidence at present that many localauthorities are proposing to establish theirown call centres, where (as even major callcentre providers recognise) economies ofscale might flow from working together to establish common call centres for generic services.

6.24 The Netherlands, with its ‘PublicCounters 2000’ project has established asingle telephone number for all governmentservices. The project provides a singleInternet portal as a route to all services, one-stop shops where all services can be accessed

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35 For example: Electronic government: the view from the queue. CITU. October 1998. p13.

The Henley Centre highlights similar groups in E-government. Ready or Not. July 2000.

through human interface, and a singletelephone number. Such an approach neednot mean, of course, that there would beonly one route for telephone access.

Conclusion 4: The Modernising PublicServices Group in the Cabinet Officeshould develop a cross-governmentstrategy for dealing with the citizenover the telephone by March 2001.

In developing business plans for onlineservices, departments, agencies andlocal authorities should ensure that:

• key online government services aresupported by a web-enabled callcentre facility where appropriate;and

• call centres are capable of dealingwith a range of related enquiries,rather than being based on single‘silo’ services.

6.25 Similarly, there would be advantagesin regionally helping local authorities to co-ordinate their investments in call centres toachieve economies of scale. This role wouldnaturally fall to Government Regional Offices.

Conclusion 5: Government Offices in theRegions should support localgovernment to realise economies ofscale by helping to co-ordinate callcentre investments. DETR shouldpromote bids for joined-up call centres,for example between county anddistrict councils, where this wouldlead to economies of scale.

… but other forms of mediated accessneed urgently to be piloted…

6.26 A further group may require faceto face support in accessing governmentservices. There is a significant role forfacilitators, supported by digital technology,to help those who prefer direct humancontact to gain the benefits of ESD. Thesemay either be at fixed sites, or mobile.

• Mediated Response – fixed. As now,there will continue to be networks ofphysical outlets for government services,but in future staff in these locations willoffer a wider range of services in oneplace, supported by electronic channels.People will benefit from ESD whilstcontinuing to deal with an official or

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Writtencorrespondence

0

Face to face

Telephone

Internet via PC

Internet via digital TV

Internet via gamesconsole

Internet via mobilephone

Internet viapublic kiosk

5 10 15 20 25 30

Which of the following means would you most like to use for interacting with the government? % agreeing

Source: The Henley Centre 2000

Figure 6.2: Preferred channel for interacting with government

trusted intermediary. The recent PIU reporton the Post Office network suggested thatthe Post Office could take on the role oftrusted intermediary, and other networkswill also be capable of doing this.

• Mediated Response – mobile. Internet-enabled laptops can be used to support anoutreach service similar to the fixed one-stop shops. Trained local officials canprovide support and access to governmentservices for groups with access problemsdirect from their homes. The trained andtrusted mediator will provide support inthe same way as officials in fixed locations.

Newham is already providing local staffvisiting homes with mobile telephones,which can be used to access local servicesthrough Internet-supported call sites.

Conclusion 6: Alongside the‘Government General Practitioner’pilots to be carried out following thePIU report on modernising the PostOffice network, the Modernising PublicServices group in the Cabinet Officeshould pilot mobile as well as fixedfacilitators.

6.27 All of these actions are vital to provideaccess. However, it is clear that they are verymuch a first step towards generating use ofgovernment services. The next step is usingchannels that meet customer needs.

The channels through whichservices are deliveredelectronically must reflect customer preferences6.28 The range of platforms for electronicservice delivery is proliferating (PC, DTV,WAP-enabled mobile telephones, gamesconsoles and kiosks may all have a place).There is general agreement, however, thatthe Internet will be pervasive, many

households will make use of DTV to accesselectronic services and mobile access will beof growing importance. But there is also agreat deal of uncertainty.

6.29 For example, it is not clear whetheropen standards will be ubiquitous or whetherclosed, proprietary systems will continue tohave a role; nor whether broadband serviceswill be cheap enough for universal access.In the face of this uncertainty, governmentmust develop an approach to selecting theplatforms through which to deliver itsservices which is capable of coping with arange of possible technological outcomes.

6.30 Choice of channel must reflect theabilities and preferences of the users of aservice. In this section we suggest howgovernment should tackle the channelsproblem with a strategy for selectingplatforms. The government’s aim must be tochoose channels to optimise use, and it mustbe clear how it is going to use key channels insupport of its service delivery, including digitalTV, the telephone and public access kiosks.

A strategy for selecting channels todeliver electronic government servicesneeds to be developed6.31 At present, although government isclear that it should deliver its services onplatforms that people want to use, there areno clear and consistent selection criteria forchoosing the most appropriate platforms.ESD from central departments hasconcentrated on delivery via the Internet toPCs. Some local authorities have developedservices for different channels, includingDigital TV and WAP telephones (see table 6.3 below).

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6.32 A balance needs to be found betweenachieving universal access for the citizen andallocating resources efficiently. We believethat this balance is best struck by making theInternet the backbone of government ESD.By this, we mean that Internet standards andprotocols should underlie the delivery ofservices, and not that service delivery shouldfocus on delivery to the PC – which shouldnot be equated to the Internet. This is in linewith stated existing policy but not alwayswith current practice.

6.33 Internet delivery means that citizens willbe able to access services through a variety ofdevices. Since trends in technology indicatethat emerging platforms will base theircontent standards on those used on theInternet (such as HTML, and particularly XML),Internet technology can support delivery tomany platforms, including for example DTV.Furthermore, kiosks and call centres should beweb-enabled, using the systems that underliedelivery direct to the home; and fixed andmobile facilitators should be supported bythe same systems. Even though content willbe built using common Internet standards,there will still be issues in redesigningcontent for different devices.

6.34 There will be cases where content-richservices cannot now reasonably be deliveredover narrow band Internet. This may be trueof some services currently being developedfor DTV, such as the education service pilots.In these cases, the government must still

adopt open standards, so that the service canin the future be delivered over otherchannels, such as broadband Internet.

6.35 Government should consider on a caseby case basis whether a service should alsobe delivered on non-Internet based channels,using the prioritisation framework at Annex F.Content should then be constructed to beeasily re-purposed, if necessary.

Conclusion 7: Government should adoptthe Internet as the backbone of ESDand put services on it as the defaultoption. Content should be constructedso that it can easily be re-purposed fordifferent platforms.

The telephone should be used tosupport ESD6.36 The telephone has two key functions inESD. The first, of providing access for thoseunwilling to use new technology, is describedin section 5.3.3 above. This is likely to beparticularly important in the short term forservices where currently customers are lowusers of technology. The second importantfunction is as a support channel for fullyautomated ESD.

6.37 Government should recognise thepopularity of the telephone as a means ofaccess even amongst willing users oftechnology (see paragraph 5.20), but alsothe convenience and lower cost of fullyautomated ESD. It is likely that for some time

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Brighton is developing a community portal in partnership with Cable and Wireless andntl, to deliver local services through interactive digital TV, WAP phones and Internet PCs.

The London Borough of Newham is intending to close down all existing physical outlets,replacing them with six one-stop shops or service centres, and a single call centre.

Hampshire County Council's libraries have developed a service for WAP-enabled mobilephones to enable users to find contact details and opening times of Hampshire libraries.

Table 6.3: Uses of different channels by local authorities

to come, people will use fully automatedchannels for simple queries, but will wantsome human help with more complicatedinteractions. It is therefore important thatthere should be continued investment in callcentres, to provide access for those who willnot use technology and support for web-based interaction.

6.38 However, when making investments incall centres, government needs to be clearabout how over time it will encourage use offully automated channels, and about how thecall centres will support this. Serviceproviders should not plan to use call centresas a prime delivery channel where fullautomation is possible and would be used bycitizens. A fully automated service is the mostefficient form of delivery, and investmentsshould promote this.

6.39 Many private sector firms (such as thegrowing range of online banks) use a modelin which call centres are available, but areused as secondary channels. An equivalentmodel for government is shown in figure6.3 below:

6.40 As described above, there is also a needto co-ordinate investments in call centres, sothat call centres support customer-focusedservices. The co-ordination function needs tobe brought together with the decisions aboutinvestments.

Conclusion 8: Departments, agenciesand local authorities should promotefully automated channels and onlineservices as the primary means of ESDto citizens. Telephone access to web-enabled services should also be a keycomponent of delivery plans, butshould be used for access and support,rather than as the main channel,wherever possible.

The e-Envoy should support thisapproach in making fundingrecommendations.

Co-ordinated arrangements forinvestment in public access kiosks forESD are needed6.41 Public access kiosks have been proposedas a key channel for government services, butthere are several problems with them in the

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To maximise conveniencefor citizens and reducecosts, government wantscitizens to choose first tier

First tierchannels

PC

CitizenInteractive

TV

WAPphone

KioskOutreachservices

Callcentres

Visit togovt

offices

Letter todepts

Phonedepts

directly

Second tierchannels

Third tierchannels

Government

Increasinghuman

interactionand cost Increasing

convenience/availability

Figure 6.3: Channels for interacting with government

eyes of the citizen. Many people are reluctantto use them for transactional services, andhave a fear of being overseen. However,research shows that for certain services, andin the right environment, kiosks have a place.

6.42 At present, there are many proposalsfor new kiosks to be provided in a variety ofgovernment networks and there is a dangerthat investments will be unco-ordinated. Ifkiosks are capable of providing only oneproducer’s services and if each producerinvests separately, then government will belosing major economies of scale and networkbenefits. There is therefore an extremelystrong case for co-ordination, not only ofpublic provision but of close working withprivate sector providers.

Conclusion 9: The Office of the e-Envoyand DfEE should work together toestablish co-ordinated arrangementsfor investments in kiosk services.These should ensure that governmentachieves value for money indistributing its content widely, whilstpresenting a coherent and joined-upface to the citizen.

Services should be easy to find and use6.43 At present, there is a confusion ofproducer-focused web-sites, with difficult-to-discover addresses and no elements ofcommon look and feel. Government needs toaddress these problems, so that whicheverchannel it uses to deliver its services, peoplewill be able to locate and then know how touse them. The recommendations belowamount to the need for government to

create a portal36 strategy, beginning with theneed to create a range of easy to find portals.

Government electronic services shouldbe easy to find6.44 User research has already highlighteddifficulties in finding some governmentsites.37 There are two key problems, whichwe consider in turn:

• firstly, entry points to government servicescurrently reflect the silo structures ofgovernment, rather than the needs ofcitizens; and

• secondly, government is not making gooduse of non-governmental portals todistribute its content.

Sites should be made easier to find…6.45 Few departments create web-sitenames from the user’s point of view; insteadaddresses (URLs) reflect departmentalstructures. There is no site ‘tax.gov.uk’, forexample. Web users often find web-sites byguessing the URL,38 but users would need toknow the department offering a service inorder to do this. Furthermore, there iscurrently no URL system for government ESD.There is a range of domain names and noconsistent naming convention (NHS Direct isat www.nhsdirect.nhs.uk but the InlandRevenue is www.inlandrevenue.gov.uk andthe Department of Health www.doh.gov.uk).This contrasts with the approach used, forexample, by the BBC where every site URL isof the form www.bbc.co.uk/theme where‘theme’ is what the user is searching for.

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36 The National Audit Office’s Government on the Web report defined a portal as: ‘‘any well-used gateway to the Internet … Portals

typically provide large catalogues of other sites, powerful search engines for locating information, and ... other attractive Web

services’’. December 1999. p91.37 Government on the Web. National Audit Office (NAO). December 1999. p50.38 22% find consumer commerce sites in search engines. More than 50% simply type in the brand name as the URL (for example,

www.nike.com). BrandForward Inc.’s Cyberbranding 2000 Study. March 2000.

6.46 Given its complexity, effective searchfacilities are particularly important forgovernment. Public sector organisations canalso increase discoverability by registeringmultiple domain names, all of which canpoint to the same site. These points can betackled as part of the brand strategy forgovernment, which we discuss below.

… there should be amultiplicity of entry points to government services…6.47 Government has already announcedthat it will create a personalisable portal siteas an entry point for all governmentelectronic services to the citizen.39 Thisconcept has tested well (see figure 6.4) butresearch shows that not everyone will chooseto use the portal.40 Citizens will not use it onevery visit and may go directly to a servicethey know well.

6.48 Government has also recognised theneed to provide services in different ways andto increase the discoverability of its services

by offering a range of portals. For example,the NHS has a comprehensive portal toservices in people’s local areas atwww.nhs.uk. The Local GovernmentAssociation has launched a portal for localgovernment and public sector news andinformation at www.local-government.net.

6.49 The key point is that sites should bebuilt to serve customer needs, and this willalmost certainly mean a diversity of entrypoints. Providing all services through the UKonline portal has great merit in offering arounded, personalised service to theindividual. There is also a strong case forportal sites that provide a focused service forone group (such as students) by packaginggovernment services for them. Services canbe bundled in many ways, including by age,life event or interest and it is unlikely thatone portal site can provide for all suchgroups. There may also be users who wish tocontinue to obtain specialist informationfrom a departmental site as they do now.

6.50 As the vision makes clear, many suchportal sites aimed at specific customer groups

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All

Don’tknow

Certainto

Verylikely to

Fairlylikely to

Fairlyunlikely to

Veryunlikely to

Certainnot to

Internet Access

Don’tknow Certain

to

Verylikely to

Fairlylikely to

Fairlyunlikely to

Veryunlikely to

Certainnot to

Q On balance, how likely or unlikely do you think you would be to use the Government Portal on the Internet?

Base: 2,147 GB adults, MORI Omnibus 4th – 8th May 2000

Figure 6.4: Expected take-up of e-portal to government

39 E-government. A strategic framework for public services in the Information Age. CITU. April 2000. p17.40 What’s in IT for the Citizen? Research conducted for PIU. MORI. April 2000. p28. (see Annex D).

should be provided by the private andvoluntary sectors in a competitive market.This will benefit service users, not only in theincentives it provides for improvement butalso in the content of the sites. For example,a student site which brings public sectorinformation from central government, localauthorities and universities together in oneplace has considerable merit. However, it willbe far more useful and more widely used if itcombines this content with information andservices from the private and voluntarysectors, concerned for example with the localhousing market, vacation work and careers.

6.51 Figure 6.5 below shows schematicallyhow a mixed economy of portals providinggovernment services might look.

6.52 Government needs to take care toavoid crowding out the private and voluntarysectors. It should not, therefore, seek tocreate large numbers of joined-up portals ofits own. However, there would be a powerfuldemonstrator effect from the creation of asmall number of them to provide services tokey customer groups. Government should

therefore invite bids from the public, privateand voluntary sectors to act as ‘productmangers’ responsible for creating portal sitesproviding integrated services to these groups.These ‘product managers’ are introduced byrecommendation 34 in section 7.3.2.

6.53 Except in unusual cases, all governmentservices, local and national, and includinglocal portals and the ‘joined-up’ portalsdescribed above, should be accessiblethrough the UK online portal. At a minimum,this will mean that there is a link through tothe appropriate service (which may be thecorrect way of dealing with local portal sites,for example). There may be some caseswhere this will not be sensible, and in thesecases, the Office of the e-Envoy shouldprovide a specific exemption.

Conclusion 10: All government servicesto the citizen should be availablethrough the UK online portal, unlessgiven specific exemption by the Officeof the e-Envoy. However, accessthrough multiple citizen-focusedportals should be the norm.

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Govtsite 1

Govtsite 2

Govtsite 3

Govt site 4(NHS Direct)

Local govtsite

Government

Private sectorgovt portal

(ezgov,govworks)

Old peoplegovt portal

UKonline

Schoolleaver

govt portalPrivate sector

horizontalportal (yahoo,

MSN)

Privatesector vertical

portal(thinknatural,

sportal)

Localcommunity

portal(Local govt)

Citizen

Figure 6.5: A mixed economy of portals providing government services

… and links with privatesector portals should be fully exploited6.54 When considering its portal strategy,government needs to consider the questionof how to distribute its content electronicallyrather than simply what to do about a singlepreferred site. A key part of the question ishow government can best use relationshipswith private sector sites. However, the privatesector currently has very little guidance fromgovernment on how to enter portalrelationships.

6.55 Government has not so far pursuedpotentially useful relationships with:

• existing private sector horizontaland vertical portal sites. Horizontalportal sites (like www.msn.com) attract ageneral Internet audience. Fifteen per centof all web traffic passes through the topfour portal sites.41 The top UK portals have a reach of over 40% of the UK webaudience.42 Vertical portal sites attract amore specialised audience with a particularinterest (for example, www.sportal.comcaters to sports fans);

• private sector firms which offergovernment services. In the US firmssuch as www.govworks.com andwww.ezgov.com provide an entry point toservices such as parking fine payment.Such sites can also provide innovativebundles of private and public sectorservices.

6.56 An important means of makinggovernment ESD easy to find will be toestablish relationships with high traffic privatesector portal sites. The issues of building a

market place for government services arediscussed in detail in chapter 6.

Electronic government services shouldbe easy to use6.57 Government has no consistent style ofpresenting itself to the citizen and emergingweb standards are not consistently applied.This contrasts sharply with the private sector,where firms now generally have strongcentral control over access to their sites.Private sector firms usually have the sameinterface ‘look and feel’ across their differentsites and co-ordinated branding.

6.58 There are many government serviceswhich people use only occasionally. Forexample, parents apply for child benefit onlyat the birth of a child, motorists pay theirroad tax only annually. The fact that peopledo not use most services frequently makes itall the more important that sites are easy touse and navigate, and that citizens do notneed to devote significant amounts of timeto learning how to use them.43

6.59 The evidence shows that citizens simplywill not continue to use a site if it is not easyto navigate,44 and the more that sites complywith emerging Internet standards, the morestraightforward they are to use. There is alsoa considerable body of work on what makessites easy to use,45 and the lessons of thisshould be applied across government. Theweb guidelines already begin to do this, butare not fully applied to all sites. They needenforcement, but also continuous updating toreflect Internet norms, and some extension toreinforce elements of common look and feel.

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41 The portal race is over. Forrester Research. 28 January 2000.42 UK’s Internet population increases by almost a fifth in six months. MMXI Europe. 2 May 2000.43 A point highlighted by commentary on government sites. See, for example, Web Watch. The Observer. 9 July 2000.44 For example: Usability On The Web Isn’t A Luxury. Information Week. 14 January 2000.45 For example, Designing Web Usability: The Practice of Simplicity. Jakob Nielsen. New Riders.1999.

6.60 Other international governments,including the Netherlands and Australia havedeveloped standard components, which canbe reused by different agencies in differentservices.46 The costs of doing this are small,and the benefits significant. The area ofstandardisation need not be large, and thestandards should reflect emerging Internetnorms. There would be clear benefits to theuser if the UK adopted a similar approach ofreusing interface (particularly navigation)elements conforming to Internet norms.

6.61 The Office of the e-Envoy shouldestablish standards for usability that will workacross multiple electronic platforms. Theyshould not aim to specify service designdown to the ‘pixel’ level but should beflexible. They will need to:

• draw up and disseminate further standardsfor usability, navigation and transactionsto generate elements of common lookand feel;

• monitor government sites and work withproviders to ensure usability; and

• work closely with the Central LocalInformation Age Partnership to ensure thatstandards are appropriate for both centraland local government.

Conclusion 11: The Office of thee-Envoy should build on existing webguidelines to establish mandatorystandards for the usability ofgovernment services, includingnavigation and transactions. Thesestandards should be thoroughly testedwith the target audience.

6.62 Important as it is, however, usabilityalone will not drive up service use, and it isto the question of what more governmentmust do to generate use that we now turn.

Services that people want to use6.63 People’s awareness of and attitude toa service is a crucial factor in determiningwhether or not they will use it. In this sectionwe make recommendations about makinggovernment services desirable in thefollowing areas:

• generating confidence in governmentservices; and

• building use.

Government needs to build confidencein the electronic delivery of its services6.64 There are three elements to buildingconfidence in government services. The firstis confidence that data transmitted togovernment is secure: that eavesdropperscannot read it and that no one else is capableof impersonating another to gain access tothe data. Secondly, people need assurance oftheir privacy: that personal data will not bemisused. Finally, government needs to makesure that its sites generate trust, for exampleby the way they present government, bytheir display practices and by their use ofadvertising. We take these points in order.

… by addressing concerns about security…

6.65 If the public is to use governmentservices, then there must be genuinely securecommunication between the citizen andgovernment, even though use is made ofpublic channels. The Office of the e-Envoy hasdeveloped a security framework, which setsout a staged approach so that security levelsreflect the real risks associated with a service.The issues for providing a suitable mechanismfor a service include not only the need for asecure channel but also transparency for theuser and authentication that parties at bothends of the communication are who theypurport to be.

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46 Interviews with Netherlands Overheid team and Australian Office of Government Online. 15 May and 26 May 2000 respectively.

6.66 Transactional services being launchednow, such as tax return filing, will employsimple password/PIN protection. Thisapproach is widely used in online bankingfor transactions, but will not be adequate forservices where strong authentication is needed.The PIU report E-commerce@its.best.ukrecommended that the UK introduce a securecommunications system known as a public keyinfrastructure (PKI). PKI provides a high level ofcryptographic security for communication andallows a user to authorise a transaction usingan electronic signature. The same mechanismis being developed across the world.

6.67 In the UK much effort has beenexpended in investigating the workability ofPKI. This has provided confidence that analliance of private companies can establishthe infrastructure under a self-regulatoryframework. This alliance is known as the ‘t-scheme’ and is due to be launched latein 2000. Government rightly expects thisalliance to be successful, and should continueto monitor progress to ensure that there isno need to activate a contingency plan.

… assuring people of their privacy…

6.68 Citizens’ concerns do not cease whentheir personal information is safely heldwithin a secure government database. Peopleare increasingly expressing concern about theuses to which their personal data is put.With increasing attention focused on themarket value of consumer behaviour data,and widespread concerns about how errorsin stored personal information can affect suchthings as creditworthiness, many people arebecoming cautious about supplying personaldetails, especially in electronic form (seefigure 6.6 below).

6.69 People need assurance that theirpersonal details will not be distributed tothird parties, or used for purposes other thanthose for which they have explicitly giventheir permission. People will also beconcerned if their browsing behaviour ismonitored and recorded, if they are sentunsolicited material or if unnecessarypersonal information is collected. There isneither need nor desire for government todo these things.

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40

30

20

10

0Agree

stronglyAgreeslightly

Neitheragree nordisagree

Disagreeslightly

Disagreestrongly

‘I am worried about how my personal information travelling over new technologies might be used’ (%)

Source: Consumers’ Association/IPSOS – RSL, May 1999

Figure 6.6: Concerns about privacy

6.70 However, for e-government to operatein a coherent and efficient manner, there willneed to be improved data sharing betweengovernment departments.47 Although thebenefits to taxpayers and service users of newand enhanced electronic services are obvious,increased data sharing does give rise toconcerns about privacy in this country.

6.71 Sweden, Finland and the Netherlandshave powerful advantages over the UK, notonly in their integrated databases andpopulation registers, but also in having aculture of openness in which citizens areaccustomed to having much personalinformation in the public domain. Studiesconfirm that distributed, departmental datastorage and processing will handicap UKe-government.

6.72 Informing the citizen about, and whereappropriate obtaining consent for, sharingdata within government is therefore vital.The Data Protection Act 1998 alreadyprotects citizens and its provisions should bepublicised with clear explanations of how itapplies to personal data obtained throughelectronic interaction with government. To this end, government should develop aTrust Charter which explains the protectionprovided by the Data Protection Act clearlyand provides assurance in the key areas ofcitizen concern:

• notice of data collection;

• citizen choice about how the data is used;

• citizen access to their own data;

• security of the data.

6.73 This Charter will be a document,applied on all sites where the governmentdelivers electronic services. It should alsospecify mechanisms for allowing easy andimmediate access to data held about anauthenticated individual, the system forefficiently and rapidly correcting incorrect

data, and the procedure for handlingcomplaints. This can be developed throughthe working group that has already beenformed within the e-Envoy’s office to developguidelines for the collection, protection,processing and erasing of personal data.

Conclusion 12: The Office of the e-Envoyshould develop a Trust Charter forgovernment ESD in co-operation withthe Data Protection Commissioner.

6.74 The case for increased sharing of databetween government departments so thate-government can operate far moreefficiently and effectively is very strong. It is akey enabler of the proactive joined-up servicedelivery described in the vision. However, asdescribed above, it also raises concerns aboutcivil liberties, and there is a need to considerthis whole set of issues together in moredetail. A separate PIU project reporting earlyin 2001 will examine privacy and datasharing issues and is the ideal vehicle fortaking this analysis forward.

… and building trust through policieson branding

6.75 Partly because so few people possessa comprehensive understanding of thetechnology, security systems and potentialrisks to be able to make an entirely accuratejudgement about the safety of supplyingpersonal information through an electronicchannel, a number of other factors influencefeelings of trust. These include: servicebranding, which can influence perceptionsof trustworthiness; and advertising, which canawaken concerns, particularly if productsadvertised are not appropriate or if governmentis thought to be endorsing a product. Severaloverseas governments have adopted an over-arching online government brand (see forexample, www.servicecanada.gc.ca).

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47 See, for example, Privacy and Data-sharing, Information Age Champions Guidelines.

6.76 Serious attention should be paid tomanaging the reputation and trustworthinessof e-government services and to the brandvalues that they convey. These values shouldinclude reliability, confidence, professionalismand a citizen-focus and should be theresponsibility of the Office of the e-Envoy.

6.77 The production of content should feelprofessional and efficient and employ designmetaphors appropriate to this. Departmentor agency branding must not conflict withthe overall message. Local authorities whosebranding is used to convey a sense of localityand community should not, however, beconstrained to carry central governmentbranding.

Conclusion 13: The Office of the e-Envoyshould publish a code by December2000 setting out standards for displaypractices appropriate for governmentservices delivered electronically.

Take-up of electronic governmentservices needs to be promoted6.78 With all of these building blocks inplace, the final requirement of achieving highuse of government services is to generate areal preference for using the service online.There are two key components of this. Thefirst is to provide clear incentives for use; thesecond is to market the services so thatpeople are aware of them and know aboutthe benefits that they can offer.

… through incentives for usinggovernment online services…

6.79 Citizens should have clear incentives touse ESD, but it is important to realise thatthese do not have to be financial in nature.The benefits of ESD, including convenience,time saved and faster service may all becompelling reasons for citizens to switch toESD. There is already a small but growingnumber of people who want to interactelectronically with government (see figure6.7). Government needs to understand thebenefits that this group perceives, and theirchanging preferences.

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The Internet

49% of people are expected to access government electronically by 2003.Preferred medium of access to government services in 3 years’ time

By post

Local library

In person

Physical one-stop shops

Call centres

0 105 25 3015 20

Digital TV

Don’t know

Source: KPMG Consulting, Britain ready for online public services. The implementation of e-government, 2000, p2. Sample: 2, 115

per cent

ESD medium

Figure 6.7: Preferences for interacting with government

6.80 There are many factors affecting whatcitizens see as the main benefits of ESD and,indeed, whether they see any benefits at all.There are, however, some major widely

6.81 It is important that governmentunderstands the relative importance of thesebenefits to different citizen groups. The InlandRevenue has launched a £10 rebate as anincentive for citizens to submit their self-assessment tax returns online, but there is noresearch to back up whether this is anadequate amount or whether a rebate is theright type of incentive. Customer research intoappropriate incentives should be part of themarketing strategy for ESD discussed below.

recognised benefits as recent qualitativeresearch shows (see table 6.3). ESD will bemore convenient, faster, more personalisedand empowering to the citizen.

… and by developing and marketinga government online brand

6.82 Experience from the Australian MAXIproject shows the positive effect marketingcan have on service reach: usage figures wereinitially disappointing, but soon exceededexpectations with the introduction of amarketing campaign.48 Marketing campaignswill be particularly important for high profileportal sites.

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‘‘Email’s more instantaneous, whereas if you post somethingit’s two or three days and you don’t know if it’s got there.’’

MORI report.

‘‘I do like the idea that it saves time…time is so precious.’’ BT report.

Faster service

‘‘It will put an end to the confines of normal switchboardor opening hours of public bodies.’’ MORI report.

‘‘I could send the email in my own time…rather than runninghome…hoping that I might catch someone before they pack up.’’

BT report.

Convenient:

When and where you want

‘‘It will cut down on travel costs.’’ MORI report.

‘‘As a driver of e-government, [citizens] identified the potentialsavings of money and time by using email.’’ BT report.

Affordable

‘‘In getting information this is better than traditional methods.’’ MORI report.

Easier to use, includingunderstand

‘‘For some the Internet may be empowering… allowing themto take over processes that would previously have been handledby third parties…’’ E-Government: Ready or not? British Telecom. July 2000.

‘‘Being able to access information and services quickly withouthaving to depend on an intermediary…is seen as an advantage.’’ What’s in IT for the Citizen? Delivering Public Services throughElectronic Channels. Research conducted for PIU. MORI. April 2000.

Open and empowering:

The opportunity to have a sayin, and more control over, thedecision making processaffecting you

Table 6.4: Recognised benefits of ESD

Elements by which Recognised benefits (from qualitative research)services are judged

48 Information Age Government: Benchmarking Electronic Service Delivery. CITU. June 2000. p24.

6.83 It is not possible to identify all thethings that government should do to marketits services. However, it does need to developa strategy which is focused on the needs ofthe citizens rather than those of theproducer. This should be co-ordinated bythe e-Envoy’s office, working with theGovernment Information and CommunicationsService and should have a clear focus ongenerating use of government ESD.

6.84 This approach should provide aframework within which marketing activitycan be more effective across government.Though there is no case for total uniformityof brand or marketing across the publicsector, some common branding offerseconomies of scale for governmentmarketing and greater certainties for citizensin knowing whether or not they are dealingwith government. The strategy must notdetract from the ability of individual serviceproviders to promote their services to theirclients in the most effective way, but shouldresolve current issues of brand confusion in acoherent way. As already identified, issues ofbrand and marketing also have an impact onlevels of trust.

6.85 Key aspects of the marketing and brandstrategies will be:

• branding, which starts with the UK onlineportal and extends to all other onlineservices; has the flexibility to cover a widerange of services; works across differentelectronic platforms; and helps engendertrust in government ESD;

• making citizens aware of electronic servicesas they become available;

• a cross media campaign paying attentionto new media advertising;

• ensuring that every piece of governmentinformation carries a web-site address andactively encourages citizens to use theweb-site;

• considering rationalising the web-siteaddresses (URLs) as discussed above.

Conclusion 14: The Office of the e-Envoyshould develop a marketing and brandstrategy for government ESD.

6.86 However, the role of service providersin driving up use of services is critical. A keymessage for departments, agencies and localauthorities investing in ESD is that theirinvestment must be driven by use of theservice, since this is the key driver of benefitsto the citizen. In their business and marketingplans departments and agencies need to beclear about the levels of use they areexpecting and how they will go aboutachieving this. This must be backed by astaged funding process, as set out in thebusiness planning annex to this report, andan expectation that investment will stop ifservices are not taken up. Service providersshould be prepared to experiment, but withclear break points at which to look at whatis working.

Conclusion 15: Each business case for anonline service should include a clearprojection for use of the service, and aclear strategy for achieving that levelof use. Business plans should be basedaround a staged funding approach,with clear break points to review thesuccess of the service and to makedecisions about the direction of theservice, whether to invest further andif so how this should be targeted.

In line with this approach, early movingdepartments have published targets foruptake.

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7.1 Government will inevitably have amajor role in the delivery of its own services.At the same time, the private sector willhave an important role in helping to buildgovernment infrastructure to deliver theseservices. However, as the vision describes,digital technology makes possible a newmixed economy of government servicedelivery. We begin with a discussion of whythis is important.

A mixed economy market inthe electronic delivery of government services is crucial7.2 Earlier chapters have described a mixedeconomy marketplace in which government,private sector and voluntary sector informationand services are bundled together to maximisevalue to the consumer. In the Internet style,this is the emerging G2C (Government toCitizen) market.

7. CREATING A MIXED ECONOMY DELIVERY MARKET

Summary

A new market needs to be created in electronic government serviceswhich is open to the private and voluntary sectors, as well as existingpublic sector providers.

This new ‘mixed economy’ market will:

• promote competition in the supply of electronic government services,improving service quality and bringing down costs; and

• stimulate innovation, bringing new, joined-up and customer-focusedservices to the citizen.

For this market to thrive, policy changes are required to ensure:

• the role of the private and voluntary sectors is championed effectivelywithin government and barriers to their involvement removed;

• government policy on advertising and other issues of probity isclarified; and

• open, competitive markets are promoted, and mechanisms are put inplace to ensure innovative ideas for the electronic delivery of governmentservices by the private and voluntary sectors are not crowded out by thepublic sector.

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7.3 The information ‘raw material’ in thismarketplace comes in two forms:

• information which is published – whichcan be repackaged/resold and bundled.This information is not specific to anindividual citizen, such as market surveys,generic advice and so on, published by thepublic sector. The market is reasonably welldeveloped. It has been the subject ofrecent work in the Cross-cutting SpendingReview of the Knowledge Economy(SR2000) with which the PIU workedclosely; and

• services which involve interactions andtransactions, such as an application fora licence or the payment of fines or taxes.This type of information is specific to theindividual concerned. An example of privatesector involvement in delivering theseservices is the Government’s Change ofAddress project.

7.4 Both these types of information will beinvolved in the new electronic governmentservices marketplace. This vision of a mixedeconomy delivery market offers significantbenefits to the consumer. These arise for twokey reasons:

• it will create competition to drive upquality for the citizen and reduce costs;and

• new value-added intermediaries willprovide more customer-focused services.

Competition between public, privateand voluntary sector providers willdrive up quality…7.5 The Internet changes the economics ofservice delivery. It means that governmentcan deliver services more cheaply itself andthe barriers to entry for potential newentrants are reduced. As a result we shouldsee private and voluntary sector entities

offering services which were previouslylargely the preserve of the public sector.

7.6 For example, www.upmystreet.com takesaggregated government information andrepackages it so that, using a postcodeidentifier, you can find information, forexample on local schools and hospitals.Companies like www.ihavemoved.cominform various bodies, soon to include partsof government, when an individual haschanged address. In both cases, a singleinteraction with government is required,whereas before the advent of the Internet,various interactions were required.

7.7 The competition already emerging inthis marketplace is delivering benefits to theconsumer because it provides incentives forinnovation, service improvements and costreductions. The further expansion of thismarket would extend these benefits morewidely across government services. Onecritical outcome is that services can be muchmore tailored to individual needs. Newprivate sector intermediaries are beginning toappear, bundling sets of services in novelways, to make life easier for the citizen.

…and offer new customer-focusedservices to citizens7.8 This new market is furthest developedin the US, with new companies such aswww.ezgov.com, www.govworks.com,www.netgov.com and www.nicusa.com.These have slightly different business models,but all are innovating as intermediariesbetween government and the citizen andbusiness. These companies are alreadyplanning to move across the Atlantic, seeingthe UK as a good starting point for tacklingthe European market. Meanwhile in the UKthe sector is just taking off. Recent launchesin the UK include www.impower.co.uk andwww.yougov.com.

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7.9 These companies are starting to bundleinformation and services provided bydifferent government departments andagencies, and combine this with privatesector services. Such combinations are betterable to meet the needs of citizens, partlybecause they cut across traditionaldepartmental boundaries. It is also possibleto envisage the bundling of public, privateand voluntary sector content (such ascharities for the elderly providing pensionadvice and payment covering both state andprivate pensions). It also seems likely thataggregators or wholesalers of information willemerge to bundle information from differentsources and then resell it on to third parties.

7.10 As Box 7.1 demonstrates, the voluntary,as well as the private sector will play a role inthis emerging market.

7.11 Although this emerging market offersopportunities for private and voluntary

sectors, there are challenges to ensuring itssuccessful development.

A clear framework for thisnew market needs to be put in place7.12 The challenge that lies ahead is tocreate a successful and competitivemarketplace which delivers both innovationand private investment in customer service,but at the same time meets public policyobjectives. However, creating such amarketplace will not be a simple process.

7.13 Although it is evolving rapidly, thismarket is still at a very early stage ofdevelopment. At present, government is in acomplex position: potentially it is a buyer, asupplier, a policy maker, a regulator and apartner. Clarity of these differing roles isparamount, particularly as the marketplace

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There are over 180,000 registered charities in England and Wales. There are many more ‘non-governmental organisations’ which are not registered but which are active in similar ways,particularly on the Internet. Their number and the scope of their activities continue to rise. NGOssupport the growth of the market economy by fostering social stability and trust and promotedemocracy by encouraging and enabling citizen engagement. Their strong advocacy role hashistorically been the source of many important social and economic policies.

During the last few decades NGOs and charities have also begun to participate explicitly in thedelivery of government services. Many now have service contracts, for instance, with local authoritiesto deliver home and special health care services; others work on a less formal basis with police forces,prisons and hospitals; and many are key participants in multi-million pound regeneration partnerships.

Like the private commercial sector, the voluntary sector is well placed to participate in, and support,the development of electronic government service delivery. In areas like social security, for example,voluntary agencies are adept at articulating the conditions for entitlement in plain English and in auser-friendly format. Their function of identifying and promoting special groups, and the trust thatmany of the longer-standing charities and voluntary bodies have with the public, means that NGOscan help government target its services in an increasingly fragmented marketplace. NGOs, beingnon-profit making organisations, may be able to take the opportunity to do this rather more quicklythan the private sector, for whom the commercial incentives to serve special needs may be weak orunclear. Already there are examples such as taxaid.co.uk, which provides tax advice and a tax readyreckoner aimed at those who lack confidence in dealing directly with the Inland Revenue, andadviceguide.org.uk, run by the National Association of Citizens Advice Bureaux, which providesadvice across a wide range of consumer, legal and welfare issues.

The voluntary sector will play an important part in filling that space between the state and the citizenand supporting the government’s aim of universal access and personalisation of services.

Box 7.1: The voluntary sector and electronic service delivery

for service delivery develops. Governmentfaces three key challenges if the marketplaceis to function as it should:

• championing. Ensuring that departments,agencies and Local Authorities make theirdata and systems (i.e. the key raw materials)open to third parties;

• clarifying policy. So that it dealsadequately with issues like advertisingand trust;

• providing the framework. Providing‘rules of the game’ for the marketplace toensure competition and that outcomes areefficient and equitable.

The interaction of these issues is shownschematically in figure 7.1.

7.14 Where the champion may be involvedin the provision of services, there is a needfor a clear separation between the roles ofchampion and regulator to avoid conflicts ofinterest. In the following sections we considerthe three challenges in turn.

The role of the private and voluntary sectors needs tobe championed within government7.15 The public sector organisations that

are the key suppliers of ‘information rawmaterials’ may not face market pressure tomake best use of these intangible assets.There is therefore a need to ensure thatwhere private and voluntary sectororganisations experience difficulties ininteracting with government, they have achampion within government who is ableto give them guidance, as well asencourage government bodies to providedata and services promptly and in commonformats. A champion could:

• encourage government bodies to establishwidely disseminated information assetsdatabases;

• agree any exclusions of information orservices from the marketplace – presuminginclusion in the marketplace unless there isa public policy case for an exemption; and

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Champion

Servicedelivery

Policy &regulation

Champion

Encouragesparticipation inmarketplace by

Acts as first portof call for

Ensuresconformity toguidelines by

Ensuresconformity toguidelines by

Technicalgateway Internet

Regulatesmarket on behalf

of

Dept/Agency/LA

Private/Voluntary Customer

Content owners Third parties End users

Policy andregulation

Figure 7.1: Framework for the new marketplace

• create a league table of serviceperformance by departments, agenciesand local authorities.

Box 7.2 sets out an example of the problemsthat companies have experienced in theabsence of a champion.

7.16 As discussed, much of the governmentinformation market is relatively immature.As it develops, so should policy andregulation towards it. Government shouldadopt an evolutionary approach to match thedevelopment of the market.

7.17 In terms of championing, we envisagedifferent champions for different parts of themarket in the short term:

• published information. TheInformation Review recommended thatHMSO should champion the developmentof new uses for non-personal governmentinformation assets. We support thisrecommendation;

• interactive service information. Thenatural home for this role is the Office ofthe e-Envoy. With that office’s overview ofgovernment electronic service delivery, it isbest placed to play the role of champion.

7.18 In the longer term, the role ofchampion as a cajoler of government maybecome redundant. Although there will stillneed to be a single point of contact and first

port of call for third parties with grievances,the role of champion may be reduced. Atthe same time the separation of regulatoryroles between published information andinteractions and transactions may disappear,as third parties bundle the two together.

Conclusion 16: The e-Envoy’s officeshould champion the development ofinteraction and transaction markets.In particular, they should press publicsector bodies to become ‘open forbusiness’ and support private andvoluntary sector organisations whoseek to deliver electronic governmentservices but experience difficulties.The e-Envoy and HM Treasury shouldreview this role in 2003.

Clear government policies areneeded for advertising and other issues of policy7.19 Clarity on relations with non-publicsector bodies is critical as the governmentelectronic information and services marketdevelops. There are significant new revenueopportunities for public sector bodies in themixed economy market, and in general thereis no reason to forego them. However, forthe public sector, there is a tension betweenincome and cost recovery on the one hand,and trust and probity on the other.

7.20 In the next sections we consider thespecific issues around advertising andsponsorship and the more general issuesof probity.

Advertising7.21 Advertising will increasingly become a potential source of revenue on high usegovernment sites. For example, the oldgovernment portal www.open.gov.ukreceived 14 million hits per week on average

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www.upmystreet.com collates, re-cuts andpresents disparate government data basedon postcodes. In the past, different parts ofgovernment struggled to deal effectively withupmystreet, who have faced threats of legalaction for breach of copyright. In addition, theprice that upmystreet has been charged forinformation has varied from free to thousandsof pounds, but not on the basis of a consistentand coherent pricing strategy.

Box 7.2: Upmystreet’s problems

in the first half of 2000. In the private sectorthis could generate advertising income ofaround £17 million p.a.49 By not acceptingadvertising government forgoes potentialrevenue, but maintains its reputationfor impartiality and probity. As theseopportunities proliferate it is clearly importantthat a consistent approach is adopted.

7.22 Public sector site owners are free toadvertise, providing that certain conditionsare met on the probity of material and theconsistency with wider policy objectives.Site owners should ensure that advertisers’branding does not detract from theeffectiveness of their own or widergovernment branding and the site shouldavoid any implication of endorsement ofproducts or services. As identified inchapter 6, one key issue is the impact ofadvertising on trust in government web-based information and services. Publicreaction will need to be closely monitoredas markets develop. Similar issues also applyto any sponsorship on public sector web-sites. There is general guidance given inthe Cabinet Office Guidance for Departmentson Sponsorship of Government Activities.50 Inaddition, the New Media Team within the Office of the e-Envoy have recently issuedguidance on web advertising and sponsorshipin the updated Web Guidelines.

7.23 Advertising revenues have the advantagethat they provide funding with which toimprove public services without constrainingthe development of the mixed economy,unlike charging third parties commercial ratesfor government information or services. Overtime, it is likely that advertising will become anincreasingly important way of funding theprovision of information and services anddeveloping web-sites. Guidelines will need tobe revised as the market develops.

7.24 There will also be cases where thegovernment wishes to advertise externally.To optimise traffic to its own sites governmentwill therefore need a co-ordinated marketingpolicy (Conclusion 14). In addition,government should place its own advertisingonly in locations that will maintain andenhance the public sector’s reputation.

Conclusion 17: The Office of the e-Envoy should contract ongoingresearch about advertising on publicsector web-sites and monitor incomeand appropriateness. This should beunderway before the end of 2000.

Other probity issues7.25 As advertising, content and service linksare mixed and matched on public, privateand voluntary sector sites it will becomeincreasingly difficult to manage the publicsector’s image and reputation. Of particularconcern is how data relating to individuals ishandled by third parties. Intermediarieshandling such data will need to meet certainminimum security and probity standards.

7.26 Policy should be put in place that dealswith these issues without stifling the market.Unnecessarily high standards can act as abarrier to entry, protecting incumbentoperators. As yet, there are few examples ofproblems. In different ways, the Change ofAddress project and tax self-assessment willuse third party providers, and in these andother emerging examples, there is a needfor providers to keep these issues underreview, to ensure that standards of probityare being observed.

7.27 As well as issues over trustworthinessof third parties in handling data, there aremore general issues surrounding probity.Internationally, many government bodies,such as Washington State, have developed

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49 Based on £23 per 1,000 hits; roughly the current UK market rate.50 http://www.gics.gov.uk/handbook/guidance/sponsorship.htm

and published clear policies about what isallowable on their sites. In the UK, publicsector sites should also have a consistentpolicy along these lines about what is andis not allowable.

A competitive marketin electronic government services should be promoted…7.28 The new government informationmarket will need a framework that ensuresthat government is open for business andavoids crowding out other providers, andthat the market is efficient (and in particularcompetitive) and equitable.

• Efficiency. In terms of efficiency thebest outcome is a competitive market.However, the issues of ensuring thesecurity and privacy of citizen-specificinformation are complex, as are thoseconcerning the monopolistic provision ofgovernment information and its pricing.The economic nature of information andthe position of government as a collatorand channel for it suggests that there is astrong role for pro-competitive regulationof this emerging market. Regulation willneed to ensure that pricing criteria for therelease of government information to themarket are established and adhered to,ensuring the most competitive outcomes.The presumption will be in favour of openaccess for all organisations unless a publicpolicy case can be made for a restricted market.

• Equity. As well as efficient outcomesgovernment also has equity goals. Equityissues such as universal access and avoidingthe ‘digital divide’ for government servicesare discussed in previous chapters. Justas OFTEL needs to consider such issuesin its deliberations over the telecomsmarket, so any new regulation in thismarketplace must also be conditionedby these considerations.

7.29 There should be a light regulatoryregime to achieve these outcomes and toavoid crowding out the private andvoluntary sectors.

… but regulated lightly …7.30 At this point in its evolution, the marketneeds a light regulatory touch to stimulatedevelopment. To ensure competitiveness thekey questions that need to be addressed arethe pricing of and access to governmentinformation assets. The Spending Reviewteam looked at these issues for publishedinformation. Regulation of pricing and accessfor interactive services and citizen-specificinformation is less developed.

• Published information. Working withPIU, the cross-cutting spending review onthe knowledge economy made severalrecommendations relating to ‘published’information. In summary, HMSO isresponsible for ensuring access to theseintangible assets through a new classlicence which will apply to most CrownCopyright material. Marginal cost pricing(i.e. often close to zero) will apply todigitised raw data produced bydepartments and agencies (other thantrading funds). HMSO will therefore loseits current licensing revenue. Delegationsof authority will be rescinded to centralisea simplified licensing regime via HMSO.HMSO and HMT will work with thetrading funds to improve their pricing anddissemination policies, but within theoverall rates of return set out in Treasuryguidance. All government bodies,including those to whom the rule for rawdata applies, should still be free to developvalue-added services charged at marketprices. Regulation of competition in thissector will continue to lie with the Officeof Fair Trading.

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These recommendations should beimplemented as quickly as possible.This will require strengthening existingfunctions within HMSO, who thenneed to complete and make available theInformation Asset Register as a priority.It needs to create mechanisms formonitoring the full and proper use ofinformation assets. Finally, HMSO needsto develop enforcement regimes such asleague tables.

• Interactive services. The market forinteractive government services is barelydeveloped. However, it is likely to evolvequickly. Indeed, the first deals are beingstruck now by government with thirdparties in this area (e.g. tax self-assessmentand change of address services). Thesemay set precedents for the future. In theshort term the existing rules forprocurement (the responsibility of theOffice of Government Commerce, OGC)and rates of return for government activity(HMT responsibility) should suffice.However, a more comprehensive policyand regulatory framework will need tobe developed in the near future.

Conclusion 18: Early examples of theprovision of government servicesby third parties (such as tax self-assessment and the change of addressservice) should be allowed to develop.HMT and Office of the e-Envoy shouldadopt a light touch, but monitor themto ensure that equitable and efficientoutcomes are achieved.

Conclusion 19: HMT should chaira working party of the relevantauthorities (OFT, DTI, HMT, HMSO, e-Envoy) to agree the longer-termframework for the interactivegovernment information market.

7.31 In the short term then, thechampioning, policy towards and regulationof this market can be summarised as set outin figure 7.2.

7.32 Whilst these actions should ensure anappropriate framework for the market,further steps need to be taken to ensure thatgovernment does not inadvertently stifle theprivate sector through its own actions.

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Publish Interact-Transact

Function Institution Function Institution

Third party champion HMSO Third party champion e-Envoy

Asset database HMSO Asset Database e-Envoy

Exemptions HMSO Exemptions e-Envoy

Service performance HMSO Service performance e-Envoy

Function Institution Function Institution

Advertising, branding, e-Envoy and DPR Advertising, Branding, e-Envoy and DPRethics Ethics

Function Institution Function Institution

Entry/access criteria HMSO Entry/access criteria HMT brief

Pricing HMT Pricing HMT brief

Competition OFT Competition OFT

Figure 7.2: Summary of roles

Regu

latio

nPo

licy

Cha

mp

ion

… and carefully overseen to ensurethat innovative private and voluntarysector services are not crowded out7.33 There is a multiplicity of services thatthe public sector can and should deliverelectronically. The government faces sternorganisational challenges in doing this, as wediscuss in subsequent chapters. However,there are many areas where the private andvoluntary sectors might deliver services inwhole or in part. Because this is a rapidlychanging market and because it is not clearhow it will evolve, government faces adilemma. If it acts now it may crowd outprivate sector entrants. If it does not act nowcitizens may be left with negligible or poorelectronic services.

7.34 In many cases, there will be strongreasons why government should act now,working in general with partners fromoutside government. In the first place, itwill secure delivery of the government’sobjectives. Secondly, it will act as a lever forgovernment to sort out its back office fully,which again it will generally do with partnersfrom the private sector. Finally, it is only bytrying to deliver service electronically thatgovernment will discover and work throughall the problems that it faces. However, thereis no reason why government should dothese things in isolation, or by using atraditional procurement model. The changeof address service is an example of usingprivate sector providers in innovative ways (incompetition and without payment) to securedelivery of a service.

7.35 Government needs to optimise the roleof the private and voluntary sectors now andin the future.

• Now: This requires careful appraisal ofwhether, and if so, how governmentintervenes on a case by case basis.Opportunities for partnerships with theprivate and voluntary sectors need fullyto be exploited.

• In the future: This requires reviewingwhether and when to transfer serviceprovision to the private and/or voluntarysectors if these sectors are not alreadyinvolved.

7.36 The potential for crowding out dependson the nature of the service. The threeexamples below show how this can differ.

• Content-rich services such as healthadvice and education are problematic. Forexample, the creation of NHS Direct Online– one of the most popular governmentweb-sites – may have dissuaded someprivate sector health portals from enteringor affected the business plans of existing UKplayers. In this case, there are good reasons– to do with independent advice – forcreating a public sector presence. However,in other circumstances one option might beto contract out such delivery with someform of public sector quality approval(a quality mark) instead of building fromscratch, or to work in partnership with theprivate and voluntary sectors.

• Bundling government transactions.There is an increasing number of examplesfrom the UK and abroad of the publicsector delivering a service to which theprivate sector adds value by bundling itwith other services or content. Forexample, filling in a tax form can bebundled with tax advice or applying fora fishing licence with angling content.Government provides the core service,but not the value-added content.

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• Low revenue services. Compared to theexamples above there may be other areaswhere the revenue model, and hence theincentive for private sector involvement, ismuch less clear. Arguably, social securitybenefits might be difficult to deliverelectronically on a stand-alone commercialbasis without some form of governmentpayment to providers. However, thevoluntary sector might have a key roleto play in partnership with government.This could help to build trust andpromote take-up.

7.37 There is clearly potential for governmentcrowding out of private and voluntary sectoractivity in this area. Action needs to betaken to ensure this effect is minimised. Theprioritisation framework and business planningannex (annex F) to this report provides onemechanism towards this end.

Conclusion 20: All future e-strategy andbusiness planning submissions shouldexplicitly and rigorously assess therationale for government interventionand funding, and demonstrate thatprivate and voluntary sectorinvolvement in publicly fundedprojects has been optimised. Thisneeds to be monitored by the e-Envoy’sOffice and HMT as part of the budgetallocation process.

7.38 The dynamic nature of the marketplacemeans that there is significant uncertainty ofoutcome. The public sector may start byproviding a wider range of electronic servicesnow, either on its own or in partnership withthe private and voluntary sectors. In someinstances, it is only after the event that it willbe clear whether or not service deliveryrequires a public, private or voluntary sectorsolution. So, by 2005 say, one could envisagea variety of outcomes for different services, asshown in figure 7.3.

7.39 Where there are strong third partyofferings in the marketplace, governmentshould consider its role and the possibility ofexiting. Where neither the public nor theprivate sector has delivered a strong serviceand there is demand, then the public sectorshould analyse why and invest, if thisimproves social welfare. Difficult decisionsarise where there is a strong public sectoroffering and a weak private sector service.This could either be because there is no rolefor the private sector or because of crowdingout. By the time these services are reasonablyestablished there should be a review of thecontinued role of the public sector.

Conclusion 21: The Office of the e-Envoy and HMT should carry out areview of all public sector electronicofferings in 2005 to determine whethercontinued public sector involvement isnecessary, and if so, what form itshould take.

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Strong public sector offering

Maintain current investment.Review rationale for governmentintervention and funding andseriousness of crowding out.

Review public sector role and exit options.

Limited public sector offering

Analyse reason for limited third party offering.Invest to develop strong public service if necessary.

Review public sector role and exit options.

Figure 7.3: Market outcomes 2005: government action

Lim

ited

th

ird

par

ty o

ffer

ing

Stro

ng

th

ird

Part

y o

ffer

ing

8 ORGANISING GOVERNMENT TO DELIVER

Summary

Perhaps the greatest challenge the government faces in delivering serviceselectronically is in developing the organisational capability to do so. Likeother governments and traditional private sector companies, UKgovernment lacks many of the skills, structures and systems to move easilyfrom traditional to electronic service delivery. Unlike the private sector,government faces no immediate competitive threat to drive thefundamental changes that will bring the potential benefits to the citizen.The fundamental organisational challenges that government faces are:

• motivating change in service delivery;

• co-ordinating these changes; and

• transforming its delivery structures to fit new patterns of service use.

Key themes in the recommendations include:

• greater strategic direction for government as a whole: together therecommendations amount to a requirement for a new e-Envoy groupto draw all of government’s ESD activity into a coherent whole;

• balancing this requirement with the need for more innovative processesthroughout government, including an ‘incubator’ to develop new ideasinto workable services rapidly;

• strong organisational and individual incentives and support fordepartments and agencies, given their key role, particularly in securingjoined-up delivery;

• developing similar incentive and support structures for localgovernment; and

• facing up to the need for very large-scale changes to government.

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8.1 This chapter considers the organisationalbarriers to ESD within government and thethings that government needs to change in order successfully to deliver serviceselectronically and to realise the benefits ofdoing so. ‘Organisation’ in this contextincludes all the internal functions ofgovernment. First we look at why thesequestions are important.

Putting the right incentivesand organisational structuresin place is crucial to ESD8.2 The organisational challenges facing theUK government are very similar to those thatface other large organisations, in the publicor private sector. Like those organisations,government lacks many of the skills,structures and systems to move easily fromtraditional to electronic service delivery.However, government’s scale and complexityexacerbate the problems. The size of clientgroups; the volume of transactions; thecomplexity and number of ‘back office’

systems; and the numbers of people andorganisations involved in service delivery allfar exceed those of most other organisations,except comparable national governments. Butwhilst the challenge is greater, the incentiveto change can be weaker: government doesnot face the immediate competitive threatthat has driven change in the private sector.

8.3 Organisational questions are central fortwo key reasons:

• establishing a good organisation is key toeffective delivery of electronic services;

• the full benefits of e-business for largeorganisations are realised only as theorganisation is transformed to takeadvantage of the possibilities ESD brings.

Organising to deliver electronicgovernment services8.4 Leaders in e-commerce in the privatesector have found that costs, risks and speed of change all depend crucially onorganisational factors. Fast-moving

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Country Organisational change Comment

New unit leads work on call centres,intranet and Internet. Works tointegrate e-government intomainstream business and otherinitiatives of the Council.

Improvement and DevelopmentDivision (headed by an AssistantDirector).

Brighton

(UK localgovernment)

Manages e-government services:handles database and technicaladministration (e.g. cybercash).

E-government unit withinManagement Information ServicesDepartment.

Boston City (US)

Formed to “operate as the peakministerial forum” on ESD.51 Essentialto provide continuing direction.

Makes sure “it all hangs together”.Facilitates and co-ordinatese-government.52

In 1997 the Online Council atministerial level was formed.

Office of Government Online wasformed in October 1998.

Australia

Table 8.1: Examples of government organisational change to deliver ESD

51 Information Age Government: Benchmarking Electronic Service Delivery. CITU. June 2000. 52 Interview with Office of Government Online by video-conference. 26 May 2000.

companies like Egg have been developed bymajor private sector concerns (in this case,the Prudential) by building them as separatestructures outside the existing organisation.As Jonathan Bloomer, CEO of Prudential, said:‘‘Egg would not have happened as it did ifwe had not made it a separate entity.’’

8.5 Likewise, central and local governmentswho have been successful leaders of publicsector ESD implementation have madeorganisational changes to deliver:

8.6 It would be facile to assume that one ofthese organisational models can be appliedwholesale across the UK. Different publicsector organisations in different countrieshave very different starting points, dependingon the attitudes of the public and the historyof government organisation. However, thelesson from all of them is that establishing theright organisation is key to the success of ESD.

Transforming to reap the benefitsof ESD8.7 Major organisations moving to delivere-commerce have found that real benefits arerealised only as the organisation embeds itse-commerce activities within the business andthen transforms its business processes arounde-commerce. This means that instead ofdelivering essentially the same services butthrough a new medium, the organisationuses the new technology to change its entireapproach to doing business.

8.8 Figure 8.1 illustrates how ESD can have asignificant effect on business processes, oncethe organisation is at the stage of transactingelectronically. If the UK government is to gainthe potential benefits of ESD, then it needsto make it a priority to bring its keytransactional services online. Only then canit begin to transform its operations to takeadvantage of the new channels. Thechallenges that it must overcome to dothis are set out in the next section.

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Figure 8.1: ESD transforming government

Transact

Interact

Publish

Degree of impact on business processes

Business as usual

Low

Integrate Transform

High

High

Low

Degree ofinteractivity

The challenge8.9 In the face of the complexity of the publicsector, there are a number of fundamentalorganisational challenges for government,which we have grouped as follows:

• motivating change in service delivery, so asto generate action on the government’skey priorities;

• obtaining the capability within serviceproviding departments and agencies todeliver change;

• co-ordinating these changes, so that actionacross government meets the needs of thecitizen coherently; and

• transforming public sector deliverystructures so that new patterns of serviceuse are catered for, access is assured andefficiency gains realised.

We consider each of these in turn.

Motivating change is essential8.10 Neither the financial rewards of successnor the competitive threat of failure exist tomotivate government ESD and throughoutthe public sector there is a need to providestronger incentives for change. The drive forchange is being led from the very heart ofgovernment, and yet the centre (CabinetOffice and Treasury) has had few levers withwhich to influence progress. Without centraldirection, there is a risk of unco-ordinatedinvestment, lost economies of scale andnetwork benefits, and a prioritisation thatfails to reflect the needs of the citizen.

8.11 A mixture of top-down and bottom-upapproaches is required. The centre will slowprogress and stifle innovation if it tries to takedetailed decisions about the best approach toindividual services. However, it is equallywrong to think that the diverse servicedelivery organisations that exist would

generate an optimal solution for governmentacting in isolation from one another. The keyis to get the balance of roles right, but forthe centre to be effective, it needs to be ableto incentivise departments.

8.12 The Government on the Web reportillustrated the current lack of central levers:

‘‘CITU’s look-ahead advice on futuredirections has often been listened to bydepartments and agencies, where staff withICT roles are understandably made anxiousby the current rapid change of pace … Butdepartments and agencies with large ICTbudgets do not see small-budget bodies likeCITU or CCTA as significant players with anyright to regulate operational decisions.’’ 53

8.13 There must be clear carrots and sticksfor service providers to get their existingservices online and to make them morecitizen-focused, following commonstandards. There must be mechanisms tofoster innovation, to prioritise effectivelybetween services and to join up wherepossible. First we consider mechanisms tosecure leadership from the top.

Top level leadership for ESD needs tobe put in place8.14 The major changes that will be requiredto implement ESD in the public sector willnot be possible without leadership from thehighest levels. For central government, thismeans that Cabinet Ministers and permanentheads of department need to be closelyinvolved in driving through change. RegularCabinet meetings are an important means ofsecuring this.

Conclusion 22: There should be six-monthly Cabinet meetings one-government, the first of whichshould be held in October 2000, to

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53 Government on the Web. NAO. December 1999. p50, paragraph 4.6.

fit alongside the e-businessstrategy process.

8.15 The effectiveness of top leaders inimplementing ESD should also be madea key measure of their performance. Theireffectiveness should be judged by theirsuccess in implementing their approvede-business strategy.

Conclusion 23: The responsibilities ofPermanent Secretaries and Ministersfor ESD should be set out in theirterms of appointment and should betaken into account in the assessmentof their performance.

8.16 Additionally, there would beconsiderable merit in stronger personalincentives for all those involved in thedelivery of the e-government agenda. Thenew Senior Civil Service pay scheme shouldbe used to encourage ESD.

Conclusion 24: Civil Service CorporateManagement Command should ensurethat new arrangements for CivilService pay encourage the deliveryof the e-government agenda.

There should be clearer strategicdirection for the electronic deliveryof government services8.17 The target of making all servicesavailable online by 2005 has helped to focusattention on bringing services online.However, it has also increased the perceptionthat electronic delivery is additional to workto modernise government, rather than its keyenabler. This perception is currentlyinstitutionalised by the separation betweenthe Information Age and other strands of‘Modernising Government’. The originalapproach to monitoring progress against thetargets (which counted all interactionsequally, whether key to service delivery ornot) also meant that activity to meet the

target need not necessarily have involvedprogress in bringing essential services online.

8.18 Progress in bringing key services forcitizens online was not accelerated as prioritywas given to those services which could bebrought online most easily. Insufficientimportance was placed on an assessment ofthe impact that electronic delivery wouldmake. Further, the targets do not drivedepartments to change their services as theycome online, with the risk that electronicservices are no more citizen-focused thantheir physically delivered counterparts.

8.19 There are few incentives to get priorityservices online quickly where to do so wouldcompete with existing delivery mechanisms.Before the year 2000 spending review, nocross-government prioritisation had beenattempted and, partly as a result, funding hasnot been closely tied to electronic delivery ofthe government’s key services. The CapitalModernisation Fund and the Invest to SaveBudget have been used to support initiativesfor change, many of which involve electronicservice delivery. However, these programmeswere not focused solely on electronic deliveryand the sums involved are small relative tototal departmental funding, so that theleverage provided by the bidding process isnot great. (In total, over the three financialyears 1999–2002, ISB is worth £230 millionand CMF £2.7 billion, of which £658 millionhas been allocated to ICT projects, mostlyconcerned with the back office.) Since thecentre cannot control what departments bidfor, these mechanisms cannot be used for acomplete prioritisation.

8.20 The target is now monitored byreference to the proportion of services fullyonline. This approach will begin to address theabove points, but will not incentivisedepartments to prioritise those services whichare difficult to bring online but offer the largestpotential benefits to citizens. The governmenttherefore needs to improve its sense of

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strategic direction. The first step is to establishlevers at the centre to ensure that there iscommon direction across government, and toensure that the key services from the citizen’sperspective are driven online.

… using funding levers at the centreof government…

8.21 It has been agreed through the cross-cutting review of the knowledge economythat the Office of the e-Envoy should share‘dual key’ responsibility for the release offunding with the Treasury (see table 8.2).This will ensure that departmental plansreflect government-wide priorities and thatthe release of funding is conditional on realprogress towards delivering the government’sESD priorities.

Conclusion 25: The Office of the e-Envoyshould use its dual key responsibilityfor the release of ESD funding toensure that new investment in ESDis used effectively. Release of fundingshould be conditional on satisfactionthat plans put forward support thegovernment’s wider objectives for e-government and that departments

have robust plans for realisingefficiency gains.

8.22 It is critical that this does not delayimplementation of ESD. Clearly, this meansthat the e-Envoy’s office must have light-touch processes, but there is also a need toensure that service deliverers have clarityabout priorities before they apply forfunding. A tool which can be used by all toestablish priorities is therefore required.

… by setting priorities for ESD …

8.23 A prioritisation framework will helpboth the Office of the e-Envoy to make goodand rapid decisions and departments tomake proposals in line with the government’spriorities. This is critical to ensuring thatscarce resources are directed as effectively aspossible. The framework must ensure thatpriorities are chosen to maximise benefits tothe citizen. In practice, and particularly giventhe absence of data, this means that theremust be a framework of criteria and rules fortheir application. The PIU has developed ageneric framework for the prioritisation ofservices across government (see annex F).

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Table 8.2: Dual key funding

It has been agreed through the cross-cutting spending review of the knowledge economythat the e-Envoy shall in future advise the Chief Secretary to the Treasury when to authorisethe release of funds for ESD programmes. Authorisation would be conditional on:

• the programme demonstrating a satisfactory e-business plan;

• there being a strategy for linking with, and streamlining, existing delivery channels;

• the programme being consistent with the government’s wider objectives fore-government;

• the programme design being fit for purpose, compatible with the single portal and withcross-cutting delivery; and

• satisfactory completion of the OGC procurement gateway process, in particular toensure that the project management and contract strategy is satisfactory and thatprivate and voluntary sector involvement is optimised.

Conclusion 26: The Office of the e-Envoyshould build on the prioritisationframework attached at annex F toprioritise key strategic services acrossgovernment, as described in themotivation section.

8.24 A list of early priorities has beendeveloped between the e-Envoy’s office, theknowledge economy cross-cutting reviewgroup and the PIU, by high-level applicationof the framework and has been agreedthrough a series of bilaterals between

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(Includes business as well as citizen services) Implementation

2005, butduplicatelicences now

Jan 2005

2005

2005

2005

Dec 2005

By the end of 2005:

Driving agencies – putting these online to deliver licence applications, car taxrenewals, driving test applications etc electronically, and establish links with carinsurance databases (DETR and agencies)

Benefit applications – putting benefit applications and payments online (DSS)

Passport applications – putting passport applications and renewals online (HO)

Conveyancing – enabling electronic land registration (HM Land Registry)

Patents – enabling online patent filing (Patent Office)

Modernisation of legal records – putting transactions between the public andthe courts (e.g. civil claims), public records and Children and Family CourtAdvisory and Support Service into electronic, Internet-enabled formats (LCD)

Spring 2001

Sept 2001

First release in Apr2001 with ongoingdevelopment

Fully in place byJan 2002

Apr 2002

Dec 2002

Dec 2002

Now to Dec 2002

By the end of 2002:

All HE Student Support application forms online

Connexions smart card for all young people to help with costs of participationin learning

Small Business Service – putting the SBS online to provide information andadvice to small businesses covering support services and regulation (DTI)

VAT – online VAT registration and returns, trade statistics and electronic contactcentres (C&E)

Companies’ registration – putting Companies House online to allow electronicregistration of companies (Companies House)

Modernisation of CAP payment systems and farmers’ portal providing onlineapplications for agricultural grants and advice (MAFF)

Culture online – putting a large volume of cultural information acrossmuseums, libraries, art galleries, etc online, working in association with theprivate sector

The option for local authorities to run small-scale experiments with onlinevoting in local elections

Now

From autumn2000

Dec 2000

By the end of 2000:

Tax returns – electronic filing of tax returns and online contact centres (IR)

Development of the UK Online citizens’ portal, Government Secure IntranetGovernment Gateway and other corporate projects (Cabinet Office)

Development of the Learning and Work Bank – providing an online service forcitizens looking for jobs or training opportunities (DfEE)

Table 8.3: Priority services identified in the cross-cutting review of the knowledge economy

departments and the centre. These prioritiesare being funded through the 2000 spendingreview and are key parts of the programmefor delivering the 2005 target, and for earlyintroduction where this is possible. These areset out in table 8.3 above.

… by using Service Delivery Agreements todrive forward implementation…

8.25 Service delivery agreements (SDAs)between departments and the Treasury canbe used to support this prioritisation andensure that suitable proposals are broughtforward in a timely fashion. We believe that itwould be useful for SDAs to include a cleartarget for when key services and componentsof services will be online.

Conclusion 27: All SDAs should includeclear targets for the priority servicesto be brought online. For priorityservices, SDAs should include:

• date for full implementation;

• milestones, setting out what shouldbe delivered by interim dates; and

• as far as can be determined, a list ofservices they should ‘join up’ with,when and how.

8.26 These recommendations will provideclarity about the service priorities acrossgovernment, together with clear carrots forservice deliverers to act in accordance withthe priorities. It would also be useful toestablish a fall-back option to be used ifexisting service providers are moving slowly,or do not bring forward suitable proposals.

…by replacing poor performers…

8.27 One way of doing this is for Secretariesof State to switch service provision toalternative providers, for example byestablishing ‘dot.gov’ start-up businesses.Start-up businesses could be introduced totake over responsibility for ESD from an

existing service provider, or to compete withan existing provider. Such new e-governmentbusinesses may focus on core, silo-basedservices, but could be used even moreeffectively to promote innovative, cross-cutting services.

Conclusion 28: Secretaries of Stateshould consider the benefits ofswitching electronic delivery ofgovernment services to alternativeservice providers in the public, privateand/or voluntary sectors whereprogress is slow. This might involvethe creation of dot.gov start-ups: newentities to deliver cross-cutting andinnovative services, or to compete withtraditional delivery mechanisms.

8.28 The mechanisms and structures thatwill be available to enable this to take placeare described in more detail in section 7.3.3on developing new service ideas. If there isslow progress in any area, the e-Envoy shoulddiscuss with departments the reasons for this,and establish with them the best approach tomaking progress.

8.29 Much of the above applies in particularto central government. It is also critical thatlocal government receives the support thatit needs.

… and by creating a framework forsuccessful ESD in local government

8.30 These arrangements will not be suitablefor local government, where – even leavingaside questions of accountability – it wouldclearly not be feasible for the e-Envoy’s officeto approve e-government strategies for alllocal authorities. Nor would this degree ofcentralism be desirable. Nonetheless, there isa need to provide greater incentives andsupport for those local authorities thatcurrently lag behind the leaders.

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8.31 Currently, the 2005 targets that applyto central government do not apply to localgovernment. The PIU recommends that thisposition needs to change.

Conclusion 29: Local government shouldundertake to meet the 2005 target for100% of services being available online.

8.32 Best Value has the potential to act asa key driver of change, and to be animportant vehicle for reaching the 2005targets. The PIU supports the proposal toinclude Information Age targets in the set ofnational Best Value performance indicators.

Conclusion 30: DETR should includean Information Age governmentperformance indicator in the BestValue performance framework.

8.33 Furthermore, it would be helpful if theAudit Commission encourages local authoritiesto undertake Information Age cross-cuttingreviews early in their five-year plans. The AuditCommission should also make efforts toensure that all audit teams include at least onemember with recent ICT experience.

8.34 There is also a need to ensure thatfunding provided for local government ESDthrough SR2000 is targeted as effectively aspossible. There will be various sources offunding for local authorities’ additionalinvestments in ESD. Mainstream budgetsand PFI credits will be the main ones. Insome cases, special budgets such as theSingle Regeneration Budget and EU structuraland regional funds will be importantadditional sources.

8.35 Additional funds allocated in SR2000 toDETR for local government should be used tosecure a step change in electronic servicedelivery. DETR should lead development ofa strategy to achieve this in concert with the e-Envoy’s office and decide in the light of thatstrategy the best way to disburse additional

funds. This could include funding the costs ofsharing best practice, pump priming schemesthat would hasten development of ESD,bearing the costs of developing goodbusiness cases or the salary and bonus costsof specialist staff. Government Offices in theRegions, staffed with appropriately skilledpeople, should have a role in advisingDETR on the development of e-governmentstrategies regionally, advising local authoritieson compliance with the e-Envoy’s guidance,identifying synergies in investments andensuring that technical standards are applied.

Conclusion 31: DETR should beresponsible for developing a strategywith the Office of the e-Envoy toachieve a step-change in the electronicdelivery of local authority services; andDETR should consider the practicalitiesand resource implications of workingthrough Government Offices in theRegions to ensure that:

• individual local authority e-strategiesare approved in line with e-Envoyguidance and templates;

• regional network synergies ininvestments are identified; and

• central government funding forapproved plans is targeted on areaswhere funding is most difficult andneeds are the greatest.

8.36 As well as providing a mechanism forinformation sharing between localauthorities, there is also a need for a moreeffective interface between central and localgovernment on the Information Age agenda.The LGA and IDeA have focused on servicingthe local government body. There is a needto make current organisations more effectiveand to move on from the current position ofconcordats and forums. We believe that theLGA is well placed to liaise with DETR andthe Office of the e-Envoy on e-government

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strategy, and to link effectively withelected members. DETR should lead theimplementation of the local government e-strategy in partnership with the LGA andthe IDeA.

Conclusion 32: IDeA should support theimplementation of local e-governmentstrategies. IDeA should continue to:

• develop national projects for localgovernment;

• provide training and consultancyadvice to local authoritiesdeveloping their strategies;

• develop central–local pilots;

• maintain links with the key central bodies.

It should also support the disseminationand interpretation of best practiceinformation and guidelines.

8.37 The incentives described will help topush service providers to drive their existingservices online. However, like the 100%targets, they do not concentrate on

developing services to focus more effectivelyon what citizens want. It is to this that wenow turn.

Electronic government services shouldbe citizen-focused8.38 Many of the benefits of ESD arise becauseit becomes possible to deliver more integratedservices (as can be seen, for example, onSingapore’s life-events based e-citizen site),better reflecting citizen preferences. Thisrequires more effective working betweenorganisations, but the challenges of effectivecross-cutting ESD are similar to those of othercross-cutting work. Accountabilities andincentives for joined-up government are thesubject of a previous PIU report, Wiring it up,and the lessons from that report need to beapplied to cross-cutting ESD.

8.39 The development of the National Landand Property Gazetteer (see table 8.4 below)is an example of what is possible in thiscountry with joint action between centraland local providers. However, ‘joined-up’service delivery is hard to achieve because

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Table 8.4: The National Land and Property Gazetteer

The NLPG is effectively a database providing unambiguous identification of land andproperty through unique property and street reference numbers. It is at the heart of theproposed National Land Information Service (NLIS), which will promote electronic deliveryof land and property related services. NLPG project aims are to:

• work towards the delivery of citizen-centred services used by Local Authorities and theirpartners through the use of a single national address set;

• help local authorities to manage their information to British standards;

• provide a core address dataset for key initiatives such as the creation of electronic voting(based on nationally linked rolling electronic electoral registers) and simplified propertysearchers for conveyancing; and

• develop a standard methodology for updating and collating addresses and working withpartners including the Valuation Office Agency, HM Land Registry, Registers of Scotland,Royal Mail and Ordnance Survey with a simple operation framework.

(with some exceptions, such as joint PublicService Agreements and Invest to Save) thereare few strong incentives for interagencyco-operation in delivering electronically.

8.40 One idea for producing morecustomer-focused services quickly is toestablish customer group or product managers,who would be responsible for integrating theservices that government delivers to a singlegroup of citizens. This idea is discussed in thecontext of creating joined up portal sites insection 5.5.1. Customer segments may beidentified in a number of ways, such as bylife episode (for example, becomingunemployed), by life-cycle stage (forexample, being a student) or by interestgroup (for example, motorists). It followsthat a single individual will generally be partof several groups, with different requirementsat different times; and that a service mightbe used by several different groups.

8.41 The functions of such a productmanager would be:

• to find out what people in the customergroup want from government;

• to bring together the services that thegroup wants in a coherent way; and

• to present the services to the group in theway that it wants them.

The product managers would therefore havethe task of providing joined-up services toone group of clients, working acrossdepartments, agencies and local governmentand with outside organisations to do so.This is closely related to life event work beingcarried out as part of the UK online portalwork (see table 8.5 below).

8.42 The task of identifying all of the relevantcitizen segments is not achievable by a smallgroup at the centre. It is also not desirable forthe centre to establish product managers inlarge numbers, since the result of publiclyfunding large numbers of them would beto crowd out ‘mixed economy’ provision.

8.43 Nonetheless, government is a long wayfrom achieving the vision, and needs tobegin to build more integrated services,consistent with its long-term intent. One wayof doing so would be to establish a smallnumber of demonstrator product managersin the public, private and voluntary sectors tointegrate content for a few key customergroups. Doing this would bring rapid benefitsof joined-up service to these groups, andequally importantly would act to show the

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Table 8.5: The UK online portal – life events

The UK online portal will initially provide four life episode informational services, which willlater be enhanced to include more complex services. They are:

• Having a baby

• Going away

• Dealing with crime

• Moving home

A mixed group of departmental and technical experts will implement each life eventservice, led by a life event champion, usually chosen from the natural lead department(e.g. Home Office for dealing with crime, or Foreign and Commonwealth Office forgoing away).

value of the role both within and outsidegovernment. To what extent (if at all) publicfunding will be required should be appraisedcarefully on a case by case basis.

8.44 No more than four such productmanagers should be introduced. Judged inthe first instance by their current access totechnology and use of government services,four promising customer groups would be:students, parents, motorists andhomeowners. A lead department would beidentified for each product manager, but thebudget would be pooled between the keydepartments involved (see Wiring it up, PIU,Jan 2000, p49).

Conclusion 33: There should be a smallnumber of demonstrator productmanagers in the public, private andvoluntary sectors, responsible fordelivering joined-up content to keycustomer segments. The e-Envoyshould identify four key customersegments and a lead department foreach one. The product manager willthen be responsible for developingjoined-up electronic services to theidentified customer group.

A government electronic serviceincubator should be established todevelop and test new service ideas8.45 If government wants to deliver ESD thatreally makes a difference for the citizen itneeds to foster a culture of rapid serviceinnovation. To free the entrepreneurial spiritwithin government requires creating andsustaining internal markets for ideas, capitaland talent. However, there are several barriersto rapid innovation within government:

• new ESD ideas may be sidelined if theythreaten to cannibalise existinggovernment service deliverers;

• complex approval procedures mean thatnew ideas take a long time to be resourced;

• the incentives to create joined-up servicesoutside existing organisational boundariesare low;

• the supporting infrastructure in terms ofcapital and skills (technological andmanagerial) are negligible or lack thecritical scale to be effective; and

• finally, the rewards for successfulinnovation are low.

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Table 8.6: In-house incubators

Firms as diverse as IBM, McKinsey & Co, BT and Disney have in-house incubators. RoyalDutch/Shell created a GameChanger process to enable unconventional ideas to circumventthe usual approval process. At Shell ‘Innovation labs’ bring small groups of people togetherand encourage them to produce radical ideas. ‘Action labs’ then help teams develop 100-day plans for conducting low cost, low risk tests of the best ideas generated. Approved ideas can receive as much as $600,000 within eight days.

A rare government example is the Digital Government Academy, developed in WashingtonState by the Department of Information Services. The Academy brings together businessmanagers, technical developers from agencies and private companies and even the citizen(to test what is developed) to build applications. The end product is an applicationtemplate and accompanying management tools, for departments and other public sectorbodies in the State.

Sources: Various; Harvard Business Review (Sept–Oct 1999); PIU research.

8.46 Private sector incubators, which existboth within companies (see box above) andas independent firms (e.g. IdeaLab!) create a‘home’ for the rapid development of small-scale prototypes. A government incubatorcould emulate this and overcome barriers toinnovation within the governmentorganisation. It would act as a legitimatehome for rival services; have streamlinedapproval processes; focus on joined-upservices; have a sufficient scale of technologyand management support; and offer novelrewards for successful implementation.

8.47 Despite the potential advantages,a government incubator will face severalcomplex issues needing careful management:

• first, it must not crowd out the private andvoluntary sectors. As has been describedelsewhere in this report, the private andvoluntary sectors are keen to play a majorrole in the new G2C marketplace andannouncements of government backedventures may create a disincentive both tonew entrants and to G2C innovationsoutside governments;

• second, as in the private sector, there willbe failures as a result of low take-up ofservices. The expectation of some level offailure must be managed;

• finally, successful projects may have anexistence in the public sector or may bedeemed viable private sector entities.A clear process needs to be establishedto guide projects rapidly into the privatesector as early as possible, whereappropriate. This would help to releasefunds for re-investment.

8.48 We therefore recommend theestablishment of an ESD incubator within thee-Envoy’s office. This will be a small unit, withaccess to sufficient funds to build ideasrapidly. Ideas from within or outsidegovernment would receive funding andtechnical and planning support, as well asaccess to government information assets.They will be developed as small-scaleprototypes. Roll-out will probably be in theform of public-private partnerships. Despitethe need to work closely with other initiativessuch as UK online, it is important thatincubator projects stand alone. Funding forthe incubator has already been securedwithin the SR2000 framework. The boxbelow sets out further details.

Conclusion 34: An ESD incubator shouldbe created within the e-Envoy’s officeas a home for start-up government ESDventures. It will rapidly fund anddevelop, jointly with the private andvoluntary sectors, prototypes from thepublic, the private and the voluntarysectors.

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Below we outline key features of the ESD Incubator (working title Gov.Lab). As with thecreation of the e-Envoy’s office itself, the key first step is recruiting staff and a board tomanage the unit.

Management. The ESD incubator will be managed from a unit within the e-Envoy’soffice. A joint public-private-voluntary sector management board will be established whichwill select projects and oversee resource allocation.

Idea generation. Although we suggest some priority projects below, the main source ofideas should be open competition with ideas from within and without government. Theincubator should aim to have launched about six projects at the end of its first year.

Table 8.7: Government incubator

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Selection criteria. The first question to be asked of any project is what, if any, publicsector involvement is needed. The overarching criterion for projects will be to maximisesocial return (see prioritisation framework in annex F). In the short term emphasis must beon electronic services that make a real difference to citizens’ lives. This means projectswhere the volume of transactions is high; where there is interaction, not just publication;where citizens have to deal with government (i.e. compulsory, not voluntary); and whereservices can be joined up (between central government bodies and between central andlocal government). Take-up of the new service is the ultimate selection criterion.

Priorities. Given the criteria stated above initial projects might include:

• voting site. As well as encouraging democratic participation, this would force the creationof strong identification and authentication mechanisms. E-democracy is already a themefor the government portal UK online and could be fast tracked here. Voting on issuesfrom school governors through to local elections should be trialled;

• benefits. Eligibility, calculation of benefits, registration and so on could take place here.Some transactions may still require face to face interaction. The target audience is inlower web usage categories, which will force access improvement.

In addition, new product managers should work closely with the incubator as they developideas to prototype stage. Links between product managers and the incubator could beformal initially, becoming more distant as services become more established.

Funding. Funding for an incubator has already been secured within the Spending Review2000. This will be used to lever in private sector funding for many projects.

Ownership. We expect an ownership spectrum from largely public through to largelyprivate and voluntary sector ventures.

Staffing. The unit will need a small central staff to filter and administrate the projectportfolio. The central staff will also contribute to web design, project management anddelivery. Project and central staff will be drawn from within central and local governmentand from the private sector.

Remuneration. Large incentive bonuses should be paid for on-time delivery. Equityparticipation should be considered where potential for private sector existence is clear.

Infrastructure. Staff will work in one place to ensure cross-fertilisation of ideas andexperience.

Project timing. Project owners must deliver a 100-day action plan within the first month.Pilots should be launched within 6 months, full launch 9–12 months after the start date.

Incubator lifetime. The success or failure of the incubator should be reviewed at thenext spending review.

The public sector needs totake urgent action to ensurethat it has the capacityto deliver ESD8.49 Establishing incentives and structures atthe centre for rapid development of ESD isonly the first step in establishing anorganisation that can deliver. It is not thecentre, but the existing service providers thatmust deliver services to the citizen, and theymust have the capacity to do so. There aretwo key areas:

• obtaining the appropriate skills; and

• establishing suitable structures to deliver.

By obtaining people with thenecessary skills…8.50 ESD is not primarily about technology,but rather about the chance to transformservice quality. However, ICT-related projectmanagement and professional IT skills arefundamental to a successful move to ESD, asare managers and strategists able to take abroad view of service delivery and thepossibilities offered by technology. None ofthese are sufficiently available to government.The Cabinet Office Review of Major GovernmentIT Projects showed that project managementskills are in short supply. Equally, and partly asa result of outsourcing, the number of ITprofessionals in central government has fallenfrom some 12,000 around ten years ago toabout 3,000 today.54 This decline is importantnot only because it leaves government withoutcapacity to carry out the internal IT work thatsupports ESD, but also because it reducesgovernment’s capacity to deal intelligently withthe private sector on matters of technology.The picture in local government is very similar,with major outsourcing having left manyauthorities bereft of IT professionals.

8.51 Government’s problems in obtaining ITskills are exacerbated by a shortage of skilledIT professionals nationally. Current evidencesuggests that the shortage will grow from220,000 people now to 300,000 by 2003,and that at the same time, the Europe-wideskills gap will be 1.7 million.55

8.52 In this environment, even major privatesector consultancies have experiencedsignificant difficulties in recruiting andretaining staff. Research by Hay shows thatdot.com managers are currently earning upto 40% more than their ‘old economy’counterparts; and shares in fast growingstart-ups can provide substantial incentivesfor success. Firms like McKinsey’s andAndersen Consulting talk in terms of a ‘warfor talent’. Government cannot at presentmatch the incentives offered in the privatesector, and must find ways of bringing inskills in a highly competitive market.

8.53 There is a substantial role for theprivate sector in implementing many aspectsof ESD. However, it would be a grave mistakefor the public sector to allow its stock of skillsto run down to a level where it is unable tobe an intelligent customer. The governmentmust therefore understand what skills itneeds and examine the options for fulfillingthat need. The e-government group hasalready begun to do that, identifying theheadline areas set out in table 8.8.

8.54 Following this work, central governmentdepartments are in the process of decidingwhat mix of skills they need to carry out theire-business strategies and are auditing presentskills to see where they are lacking. Similarefforts are being made in local government,led by the Society of IT Management(SOCITM), who have developed some ideasfor encouraging recruitment and retention inlocal government.56

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54 Review of Major Government IT Projects. CITU. May 2000.55 IDC, Datamonitor and J@M Associates in association with Microsoft.56 Services at risk? The growing shortages of ICT skills. SOCITM, SOLACE, SOCPO. Spring 2000.

8.55 These departmental examinations ofskills needs should be drawn together toprovide an analysis of the total skill shortfallsin government, and an examination ofpossible approaches to bridging the gaps.

Conclusion 35: The Civil ServiceCorporate Management Command inthe Cabinet Office should commission astudy to establish by December 2000the current and potential futureshortfalls in skills, and approachesto tackling them.

8.56 In addition, departments need somepay flexibility to retain key staff in areas ofskills shortage. The majority of organisationsin the UK operate performance related payschemes, which have delivered real benefits,particularly in the private sector. The principleof individual bonuses has widespread supportin the Civil Service but there is a general viewthat their operation has been ineffective.58

8.57 Four departments will this year pilotnew versions of pay schemes that link thepay for those responsible for key businessobjectives to their delivery and introduceteam incentives for their national networks.The PIU believes that such pilots couldusefully be extended to those involved in

the delivery of ESD. Most ESD units will berelatively small, so that substantial bonusescould be offered at marginal cost and riskto the department. Remuneration packagesfor scarce specialist skills would beconsiderably enhanced and key programmesof e-government investment would beincentivised.

Conclusion 36: The government shouldextend pilots of incentive schemes tothe ESD units of all key service deliverydepartments. Bonuses should betightly linked to achievement ofkey targets.

8.58 Judging the extent of the achievementof targets and their impact will require fastand accurate management informationsystems. Monitoring systems will need to bedeveloped, and third party review would beone option.

8.59 Apart from obtaining the necessaryprofessional skills, government also needs toraise awareness and practical knowledge ofESD more generally. Government cannotafford to pigeon-hole ESD, by treating it asan ICT issue. There is as yet insufficientawareness amongst senior management ofthe potential of ESD to transform the delivery

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Table 8.8: Headline skill areas

Support for business strategy andplanning

Technical strategy and planning

Management and administration

System development

Implementation and operations

Service management and delivery

User support

Business strategy and management

Information systems strategy andmanagement

Management of services and relationships

Technology understanding and awareness

User support and development

Implementation and programme/projectmanagement57

57 CITU work on skills supporting government e-business strategies. June 2000. 58 Incentives for Change report for the Public Sector Productivity Panel (Her Majesty’s Treasury). J Makinson. January 2000.

Technology/information professionalskills areas

Business and management skills areas

of services across government. The Centre forManagement and Policy Studies (CMPS) inthe Cabinet Office has already developed aprogramme, leaders@e-government, for topcivil servants which covers many of the mostimportant facets of electronic service delivery.The PIU believes that all board-level civilservants in major departments and agenciesshould attend this or a similar course.

8.60 Government also needs to takeseriously the idea that in future ‘allgovernment will be e-government’ – in otherwords that electronic ways of working willpermeate all government activity. This meansthat, in future, all staff will need to becapable of working through new technology,and to be aware of what it can offer.

Conclusion 37: All PermanentSecretaries and board-level civilservants from key departmentsand agencies should attend theleaders@e-government course or asimilar course. CMPS should considerwhat adjustments should be madeto the course to make it suitable foreach board by December 2000.

CMPS should also consider ways ofraising awareness of the possibilitiesand implications of new technologyamongst all those involved in servicedelivery.

E-business units should be establishedin all major service deliveryorganisations to deliver electronic services8.61 The second element of achieving thecapability to be successful is in structuring todeliver. The key structural question is theextent to which the e-business aspects of theorganisation’s work should be integratedwithin its traditional structures. At one extreme,an essentially new ESD organisation can beestablished; at the other, those responsible fortraditional delivery of a service can be maderesponsible for its electronic delivery.

8.62 Figure 8.2 shows a continuum ofe-business organisational models, fromwholly independent at one extreme, towholly integrated at the other.

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Figure 8.2: E-business organisational models

Integrated intotraditional

organisation

E-commerceunit linked to

traditionalbusiness

Dot.com–essentially

independent

Highintegration

HighindependenceI II III

• Resources residein traditionalbusiness

• Budgetsmanaged withintraditionalbusiness

• Traditionalfunctionsresponsible forbusiness change

• E-commerceleader withclear goals

• Dedicatedorganisation

• Unit toprovide catalystfor businesschange

• Completelyindependentcompany

• Mechanism tore-inventorganisation

• Own processesoptimised fore-commerce

• Focused onequity growth

8.63 Currently, most governmentorganisations are attempting implementationusing their normal, internal processes –a model close to the leftmost end of thespectrum. This is not an approach taken by

leading overseas governments or privatesector businesses. However, as table 8.9shows, fast-moving businesses have chosenvarious structural models.

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Figure 8.3: Strengths and weaknesses of e-business models

Integrated intotraditional

organisation

E-commerceunit linked to

traditionalbusiness

Dot.com–essentially

independent

Pros

I II III

Low risk

Cons

Why?

Builds on existingstrengths

Steps overcurrentorganisationalbarriers

Nothing mayhappenNo incentive forco-operation

May competewith existingbusiness forresource

Highest riskMajor challengeto existing powerbases

Low urgency Medium urgencyNeeds to build onexisting skills

High urgencyIf survival at risk

Company Organisational change Comment

By keeping Wingspan’s businessdistant from its own, Bank One hasreduced the immediate need toclose branches. Bank One offers itsown multi-channel service, forwhich customers pay more.

Formed in 1999 by Bank One inChicago as an almost completelyseparate online bank. Customerscan use Bank One’s ATMs but not itsbranches.

Wingspan is one of America’s largestInternet banks.61

Wingspan Bank (US)

Has also grown quickly. The Co-opBank did not see the need to start itup as a separate business, althoughit has a large degree of autonomy.60

Formed within the Co-operativeBank with dedicated managementand separate budget – designedexplicitly for the Internet (thoughwith telephone support).

smile

Grew so fast that, according tosome, it re-focused on the Internetto slow down growth.59

Formed as a wholly separatesubsidiary of the Prudential. Beganas a telephone bank and quicklyswitched its main business to theInternet.

Egg

Table 8.9: Structural models for ESD in the private sector

59 On Whose Face? in Online Finance Survey. The Economist. 20 May 2000.60 Interview with Bob Head, CEO of smile bank. London. 11 April 2000.61 The Case for the Defence in Online Finance Survey. The Economist. 20 May 2000.

8.64 The different models on the spectrumhave different strengths and weaknesses, andwould be adopted in different situations. Figure8.3 summarises the pros and cons of threepoints on the continuum, together withcircumstances in which each might be adopted.

8.65 The fully integrated structure is unlikelyto deliver the required speed of progress.However, there is no threat to survival orpowerful first-mover advantage to suggestthat government should begin byestablishing wholly independent ESDorganisations. As discussed above, a total lackof progress in any area would strengthen thecase for new dot.gov start-ups. At present,however, we believe that the best approachfor government along this continuum is toestablish an e-business unit.

8.66 HM Customs and Excise and the InlandRevenue are two of the fastest-movingdepartments in delivering ESD and haveadopted models close to this one. Both findthat it has increased significantly their speedof implementing ESD, and has enabled themmuch more easily to integrate ‘silo’ services.In HMC&E, for example, the e-business unitis responsible for all aspects of customer-focused electronic service delivery, includingpolicy, communications and delivery.

8.67 It might be thought that this modelwould slow the integration of e-businesspractices within the organisation as a whole.Evidence from the private sector suggests thatthis is not so. For example, when Prudentialestablished Egg, the success of the new entitywas instrumental in driving change across therest of the organisation. Throughout thebusiness, change was accelerated because ademonstration of the potential of digitaldelivery made it unacceptable not to takerapid action to move to ESD.

8.68 The PIU therefore believes that there isa very strong case for each major servicedelivery organisation to establish a unit

responsible for the front-end delivery of allelectronic services across the organisation.Such a unit should focus on the business andservice delivery needs of all parts of theorganisation, rather than on technology.The detailed structural arrangements,however, should of course be tailored tothe needs of the organisation in question.

Conclusion 38: Establish an e-businessunit within each major service deliveryorganisation, responsible for the front-end delivery of electronic services byDecember 2000.

Co-ordinating activity8.69 At present, although there are many‘enabling frameworks’ and ‘guidelines’ thecentre finds it difficult to mandate a commonapproach to ESD. As a result, significanteconomies of scale and network benefits arein danger of being lost. This is particularlytrue of local government, where there is avery wide variation in performance indelivering services electronically.

8.70 Clearly, there is no merit in the centretaking powers to second-guess service providersin areas where it lacks those organisations’information and competence. Departments andagencies must have sufficient freedom to servetheir customers in the way that best suits theirneeds and circumstances. Too much centraldirection could be as damaging as too little, ifit imposes an inappropriate uniformity thatputs conformity ahead of responsiveness:‘‘it needs to be a loose overcoat rather thana straitjacket.’’ 62

8.71 However, a number of things need tobe co-ordinated if government ESD is to besuccessful. As identified in chapter 6, thedevelopment of a brand and marketingstrategy for the whole of government is oneof these. Others are:

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• technical standards – coveringinteroperability, authentication, security andso on. Guidelines for most of these havebeen developed by the Office of the e-Envoy. However, they must be mademandatory and enforced;

• key common functions – at present onebody has responsibility for standardsdevelopment, common infrastructuredevelopment and centrally run projects,potentially giving rise to ‘poacher andgamekeeper’ problems. There needs to bea clear separation between the roles;

• information sharing – currently there areno mechanisms for gathering and sharinginformation across government. In such anew area, there would be advantages indeveloping specific mechanisms forimproving the online sharing of informationand best practice across government.

We take each of these areas in turn.

Technical standards shouldbe mandatory…8.72 Electronic service delivery dependscrucially on the adoption of commonstandards within government, and onensuring that these standards fit sensibly withthose emerging in the wider world. If differentparts of the public sector adopt conflictingstandards, then economies of scale will not berealised, and service quality will suffer as itbecomes difficult to integrate services. It istherefore critical that common standards aredeveloped and mandated from the centre ofgovernment. The Office of the e-Envoy isdeveloping such standards, and it is essentialthat they are accepted and applied across thepublic sector.

8.73 Progress is being made to ensureconformity with standards. The Office ofNational Statistics, for example, has an ‘‘in-house project team [who] are ensuring that the

architecture and operability of [their] new web-site complies with central governmentguidelines, where relevant.’’63 Nonetheless, thebenefits of common standards are only fullyobtained if they truly are common to all. Thestandards that have been set must be agreed,mandated, and applied rigorously to all projects.

8.74 The levers described above, andparticularly the dual key funding mechanism,need to be used to ensure that standards areimplemented consistently. Projects shouldnot receive funding unless they comply withagreed standards. Because the standards willbe widely disseminated across government,there should be no question of thisrequirement slowing progress.

Conclusion 39: All departments andagencies must implement mandatorystandards developed and agreed as partof the e-government strategy.

…and there must be separation ofstandards setting from other functions…8.75 A number of key functions are carriedout at the centre, and play a part in co-ordinating government activity. However,there is a danger that these fundamentallydifferent roles might give rise to ‘poacherand gamekeeper’ problems, so reducing theeffectiveness of the co-ordination. Three keytasks need to be separated out:

• setting technical standards – asdiscussed, there is a need for a continuingfunction to develop and agree standardsand to monitor their implementation;

• infrastructure development – thefunction of developing and implementingcommon infrastructure. The constructionof the Government Gateway is key. Thiscommon interface within government andbetween government and the outsideworld and the related security and

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63 PIU research of central government. April 2000.

authentication infrastructure are crucialenablers of joined-up government;

• ESD operations – the role of carrying outthe projects being run from the centre.The most important are the UK onlineportal, and the joined-up services beingdeveloped for it. These will play animportant role in delivering joined-upgovernment services.

Conclusion 40: There must be clearorganisational separation betweenthose responsible for technicalstandards setting, infrastructuredevelopment and the operation ofcommon services related to the UK online portal.

…and the centre can do more tosupport the sharing of informationand best practice8.76 Government currently lacks basicinformation about the costs and benefits ofESD. For example, there is currently littleknowledge of the transaction costs involved in delivering services; and little understandingof the demographics of customer groupsreceiving services or about their preferencesfor service delivery. There is no systematicattempt to collect this data and nomechanism for sharing it across government.

8.77 Although not comprehensive, a PIUexamination of cross-governmental plans forfuture Electronic Service Delivery has thrownthis lack of information into sharp relief.Fewer than 10% of the proposals discussedwhether overhead savings were achievable,and almost none ventured a figure. Wheretransaction cost savings were identified, theywere never quantified. There were almost noprojections of take-up, and hence no long-term planning for switchover from onechannel to another. In addition, there waslittle information about implementation, itsease or the challenges involved. There was

little data or analysis of the possible benefitsto be gained by citizens from ESD.

8.78 We believe that there should be somecapacity at the centre of government tocollect and disseminate useful informationabout ESD across government. This researchfunction would seek information from earlyexperience in the UK public sector, andsupplement it with private sector andinternational evidence. As pilots and servicesdevelop, information from these would beused to build the information base.Submission and dissemination of informationover the Government Secure Intranet wouldmake it as straightforward as possible togather and use the knowledge.

8.79 The volume of data it contains willdetermine the value of the knowledge base.An initial exercise will be needed before launchto gather together and analyse existing data.As the service becomes established it shouldachieve its own momentum.

Conclusion 41: The e-Envoy and HMTshould agree arrangements toestablish a research function to gatherand disseminate online data on ESDand e-government by autumn 2000.The function should be in place byMarch 2001.

CMPS should work with the Office ofthe e-Envoy to create a knowledge poolfor e-government from March 2001.

Opportunities for scaling backphysical networks requirecareful management if thetransformation offered by ESD is to be realised8.80 The final major organisational challengefor government is to deal with the peopleand asset implications of ESD. As services

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migrate from physical to electronic channels,there are cost savings to be achieved, andopportunities to develop a more customer-focused approach to service delivery. Bothhave substantial implications for people andassets. Cost savings mean the scaling back oftraditional delivery networks and reductionsin the number of people involved intransaction processing. More customer-focused delivery implies that government willneed people with different skills and differentpatterns of work, located in different places.

8.81 In the past, government could onlydeliver services by establishing physicalnetworks as delivery arms. These networksare generally arranged along functional lines,with each one delivering a set of services tothe citizen. However, a number of otherformal and informal networks exist wholly orpartly to deliver government services to thepublic, including the Post Office network,public libraries and community pharmacies.

8.82 The diminishing demand for traditionalchannels will mean that existing physicalnetworks will need to be thinned out in order to deliver efficiency savings. This hasprofound implications. To indicate scale,there are approximately 750,000 peopleworking in non-manual administrative gradeswithin local authorities and the Civil Service.Not all will be affected, but retraining,redeployment and rationalisation on the scalethat this implies will need to be planned, andaction will be required very soon.

8.83 Physical networks will, of course,continue to play an important role for sometime. Large numbers of people carry outwork, which cannot be automated in theforeseeable future. For example, personaladvisers will remain essential in a number ofareas. Furthermore, albeit to varying extents,the clients of these networks hold them in

high regard and value the convenience andaccessibility that their local offices provide.

8.84 Nonetheless, there is no doubt thatthere is painful change ahead, as ESDsubstitutes for some traditional operations.Many people in traditional service deliveryarms of government undertake basicprocessing work, and many administer paper-based systems. At present, there are fewexplicit plans in place to manage this change.

8.85 Service providers need to begin tomake plans. However, if changes to networksare to be optimal, there is a need for somecollective action. For example, severalexisting bodies are planning public accesskiosks for their client groups. There is a riskthat competing kiosks will result and thattheir distribution will be less than ideal. Forexample, if each delivery organisationdecides in isolation where its outlets shouldbe, then there may be several access pointsin one high street, and none in the next.

8.86 Departments have already begun torecognise the need to work together todevelop a solution.64 However, there is a needto carry out a study that will look across alldelivery networks, with a view to workingout how to manage the expected changes.The study should work out what the futurepeople and asset needs of governmentdelivery channels will be. It should seek toestablish how many people will be affectedby change and in what way, and should lookat how government can go about optimisingits physical networks of assets to provideservices for all as efficiently as possible.

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64 For example, Inland Revenue (IR), HM Customs & Excise (HMC&E), DfEE and Department of Social Security (DSS) have produced anoutline study on the implications of e-government. June 2000.

Conclusion 42: HM Treasury shouldcommission a study to examine thepeople and asset implications of ESD,working jointly with CSCM on thepeople aspects and looking by serviceprovider at: the likely timing of changes;the number of people affected; thelikely need for and distributions ofphysical networks. The study shouldlook across the range of governmentactivity with a view to optimising thephysical network of assets to provideservices for all as efficiently as possible.

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9.1 Acting on the recommendations of thisreport to realise its vision can be mosteffectively achieved by integrating thisproject’s recommendations with existingstructures and initiatives. In this chapter wereview the timetable for the main ongoingESD initiatives described in the introduction,set out the timeline for this report’s vision ofESD to the citizen and the key actions, andpresent an action plan with timings and leadresponsibilities for all the recommendationscontained in this report.

Timetable for UK and EU ESD initiatives9.2 The year 2000 has seen a number ofgovernment reports on key ESD initiatives withmore due to be published (see table 9.1).

9.3 By the first half of 2000 a number ofguidelines to support the e-Governmentstrategy had been published by theInformation Age Government Champions orwere undergoing public consultation.65

9.4 The European Union has announced thee-Europe 2002 initiative which aims to ensurethat citizens have easy access to essentialpublic data, and promotes online interactionbetween citizens and government.66

9 IMPLEMENTATION

Summary

To realise this report’s vision for ESD, the recommendations in it need tobe acted upon. There are many important ESD initiatives currently takingplace, which will be instrumental in allowing the implementation of thereport’s recommendations. These include the targets for 100% serviceavailability and 100% Internet access by 2005, the launch of the UK Onlinecitizen portal site, the launch of the Government Gateway infrastructure,interoperability standards and e-business strategies being produced bydepartments. In this chapter we set out the timetable for these initiatives,and present an integrated action plan for the implementation of ESDrecommendations in this report.

65 Guidelines and other supporting documents for e-government strategy.66 e-Europe 2002, an Information Society for All, Action Plan. Council of the European Union Commission of the European Communities.

June 2000.

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Month Activity

January Change of address demonstrator and portal demonstrator (CITU)Research into attitudes to a change of address function (CITU/MORI)67

February –

March Publication of a study on achieving universal access to the Internet (Booz-Allenand Hamilton)68

April Publication of the e-government strategic framework (CITU)

May Completion of a study of major IT projects (CITU)69

Completion of ESD Progress Report against Targets (CITU)

June Completion of ESD International Benchmarking Report (CITU)

July Publication of SR2000 spending review (HMT)

August –

September Publication of this ESD report (PIU)Annual report by the e-Envoy

October Departments’ e-business strategies (commissioned by e-Envoy)

November –

December Review of IT strategy and progress (e-Envoy)Launch of UK o 94

Table 9.1: Government ESD activity in 2000

67 Assessing Attitudes to the Change of Address Function. Government portal research conducted by MORI. January 2000. 68 Achieving Universal Access. Booz-Allen and Hamilton. 7 March 2000. 69 Review of major IT projects. CITU. May 2000.

Action Actor(s) Deadline

end 2001Member states,EuropeanCommission

Promote the use of electronic signatures within the public sector.

end 2001EuropeanCommission

All basic transactions with the European Commission must be availableonline (e.g. funding, research contracts, recruitment, procurement).

during2001

EuropeanCommission,member states

Promote the use of open source software in the public sector ande-government best practice through exchange of experiencesacross the Union (through the IST and IDA programmes).

end 2000EuropeanCommission

Develop a co-ordinated approach for public sector information,including at European level.

end 2002Member states,EuropeanCommission

Simplified online administrative procedures for business, e.g. fast-track procedures to set up a company.

end 2002/3Member statesMember states to ensure generalised electronic access to mainbasic public services.

end 2002Member states,EuropeanCommission

Essential public data online including legal, administrative, cultural,environmental and traffic information.

Table 9.2: European Union ESD activity

Leadership in implementingthis report9.5 The previous three chapters of thisreport contain 42 conclusions, each withclearly identified responsibility forimplementation. However, there is also aneed to ensure ownership and responsibilityfor the overall programme, includingappropriate ministerial direction andaccountability. Whilst departments andagencies will have the key responsibility forimplementing ESD on the ground, thee-Government Minister and the e-Envoy are the appropriate people to bring theprogramme together.

Conclusion 43: The e-GovernmentMinister and e-Envoy should togetherchampion implementation of thisreport as part of the overalle-government strategy.

The e-Envoy should have overallresponsibility for monitoring progresstowards this report’s recommendationsand should report on progress as partof his annual report to the PrimeMinister. He should work withInformation Age Champions who willbe responsible for implementation intheir own departments and shouldreport on progress in their e-business strategies.

The timetable for the PIUvision of ESD9.6 This report’s vision of ESD involves theroll-out to the citizen of services of increasingsophistication. In the Benefits chapter, wedeveloped a typology of these services intothose which publish information to thecitizen, those which allow the citizen tointeract with government, and those whichallow transactions between citizen andgovernment.

9.7 As time progresses, we will see electronicservices becoming more sophisticated withinteraction and transaction becoming thenorm, and increasingly we also expect tosee joined-up service delivery by the public,private and voluntary sectors. The figurebelow shows how the vision and keyrecommendations in this report fit with theongoing ESD targets and initiatives acrossgovernment. 2005 will be a key milestoneyear for ESD developments, but the ESDdevelopment process will not end then.

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Figure 9.1: Timeline for government ESD

2000} 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Targ

ets

PIU

vis

ion

Key

PIU

rec

omm

enda

tions

Ong

oing

initi

ativ

e

90% routineprocurement

100% ESDcapability

Analogue TVswitchover

100%access

}Publish

Interact

Transact

All existingservices onlineby 2005

Joined-up government

All future services are joined up

Mixed economy review

ExpandedE-envoy office

Establish Internet asbackbone to all ESD

Createincubator

First generationincubator projects

Second generation incubatorprojects

Brand strategybegins roll-out

Brand strategy roll-out complete

New charters to ensure citizen trust in allaspects of ESD

Begin to champion privateand voluntary sectorinvolvement in ESD

Begin co-ordination and monitoring of governmentaccess initiatives

UK online portal

GSI

Government Gateway

Interoperability standards

PKI

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Timetable for PIU ESD conclusions9.8 The table below summarises timingsand lead responsibilities for all theconclusions contained in this report.

Reaching the Citizen

No Conclusion Lead In support/ Deadlineresponsibility other key

players

1

2

3

4 Strategy inplace byMarch 2001

MPS,departments,agencies, LAs

The Modernising Public Services group in theCabinet Office should develop a cross-governmentstrategy for dealing with the citizen over thetelephone by March 2001.

In developing business plans for online services,departments, agencies and local authorities shouldensure that:

• key online government services are supportedby a web-enabled call centre facility whereappropriate; and

• call centres are capable of dealing with a rangeof related enquiries, rather than being basedon single ‘silo’ services.

FromOctober2000

DTI, DfEEDCMSGovernment should work with the private sector toencourage widespread take-up of DTV and ofInternet access via DTV as an important contributorto achieving the goal of universal Internet accessby 2005. This should be taken into account in thework to prepare for analogue switchover.

From Dec2000onwards

DfEE,RegionalCo-ordinatingUnit

GORsGovernment Offices in the Regions workingclosely with DfEE should take the lead inco-ordinating policies on access at the regionaland local level and integrating local governmentpolicies with central departmental programmes.Directors of GORs should report on progress everysix months to the responsible minister at DfEE.

From Dec2000onwards

Office of thee-Envoy,departments

DfEEDfEE working closely with Office of the e-Envoyand other departments should take the lead inco-ordinating all community-based accessinitiatives to ensure they form a coherentprogramme, which will deliver universal accessto the Internet by 2005. DfEE should appoint asenior official/have a minister responsible foroverseeing/leading this co-ordinating function.

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Reaching the Citizen

No Conclusion Lead In support/ Deadlineresponsibility other key

players

5

6

7

8

9

10

11 By March2000

Departments,agencies, LAs

Office of thee-Envoy

The Office of the e-Envoy should build on existingweb guidelines to establish mandatory standards forthe usability of government services, includingnavigation and transactions. These standards shouldbe thoroughly tested with the target audience.

FromOctober2000onwards

Departments,agencies, LAs,Office of thee-Envoy

All government services to the citizen should beavailable through the UK Online portal, unlessgiven specific exemption by the Office of the e-Envoy. However, access through multiple citizen-focused portals should be the norm.

From June2001onwards

Departments,GORs, LAs,OGC

Office of thee-Envoy, DfEE

The Office of the e-Envoy and DfEE should worktogether to establish co-ordinated arrangementsfor investments in kiosk services. These shouldensure that government achieves value for moneyin distributing its content widely, whilst presentinga coherent and joined-up face to the citizen.

FromOctober2000onwards

Office of thee-Envoy

Departments,agencies, LAs

Departments, agencies and local authoritiesshould promote fully automated channels andonline services as the primary means of ESD tocitizens. Telephone access to web-enabled servicesshould also be a key component of delivery plans,but should be used for access and support, ratherthan as the main channel, wherever possible.

The e-Envoy should support this approach inmaking funding recommendations.

FromOctober2000

Departments,agencies, LAs

Government should adopt the Internet as thebackbone of ESD and put services on it as thedefault option. Content should be constructedso that it can easily be re-purposed for differentplatforms.

From June2001onwards

Office of thee-Envoy,DfEE, LAs

MPSAlongside the ‘Government General Practitioner’pilots to be carried out as a result of the PIU reporton modernising the Post Office network, theModernising Public Services group in the CabinetOffice should pilot mobile as well as fixed facilitators.

From Dec2000onwards

LAs,departments

GORsGovernment Offices of the Region to help localgovernment to achieve economies of scale byco-ordinating call centre investments. DETR shouldpromote bids for joined-up call centres, forexample between county and district councils,where this would lead to economies of scale.

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Reaching the Citizen

No Conclusion Lead In support/ Deadlineresponsibility other key

players

12

13

14

15 From Dec2000onwards

Office of thee-Envoy,HMT

Departments,agencies, LAs

Each business case for an online service shouldinclude a clear projection for use of the service, anda clear strategy for achieving that level of use.Business plans should be based around a stagedfunding approach, with clear break points to reviewthe success of the service and to make decisionsabout the direction of the service, whether to investfurther and if so how this should be targeted.

By March2001

Office of thee-Envoy

The Office of the e-Envoy should develop a strongmarketing and brand strategy for government ESD.

By December2000

Office of thee-Envoy

The Office of the e-Envoy should publish a codesetting out standards for display practicesappropriate for government services deliveredelectronically.

By June 2001 DPROffice of thee-Envoy

The Office of the e-Envoy should develop a TrustCharter for government ESD in co-operation withthe Data Protection Commissioner.

Creating a Mixed Economy Delivery Market

No Conclusion Lead In support/ Deadlineresponsibility other key

players

16

17 From Dec2000onwards

Office of thee-Envoy

The Office of the e-Envoy should contract ongoingresearch about advertising on public sector web-sites and monitor income and appropriateness.This should be under way before the end of 2000.

From Dec2000,reviewed byOctober2003

HMTOffice of thee-Envoy

The e-Envoy’s office should champion thedevelopment of interaction and transactionmarkets. In particular, they should press publicsector bodies to become ‘open for business’ andsupport private and voluntary sector organisationswho seek to deliver electronic government servicesbut experience difficulties. The e-Envoy and HMTreasury should review this role in 2003.

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Creating a Mixed Economy Delivery Market

No Conclusion Lead In support/ Deadlineresponsibility other key

players

18

19

20

21 By Oct 2005HMT, Officeof thee-Envoy

The e-Envoy and HMT should carry out a reviewof all public sector electronic offerings in 2005 todetermine whether continued public sectorinvolvement is necessary, and if so, what form itshould take.

OngoingOffice of thee-Envoy,HMT

DepartmentsAll e-strategy and business planning submissionsshould explicitly consider the rationale forgovernment intervention and funding, anddemonstrate that private and voluntary sectorinvolvement in publicly funded projects has beenoptimised. This needs to be monitored by thee-Envoy’s office and HMT as part of the budgetallocation process.

By Dec 2000OFT, DTI,HMSO

HMTHMT should chair a working party of the relevantauthorities (OFT, DTI, HMT, HMSO, others) toagree the longer-term framework for theinteractive government information market.

FromOctober2000onwards

OFT, DTI,HMSO

e-Envoy,HMT

Early examples of the provision of governmentservices by third parties (such as tax self-assessment and the change of address service)should be allowed to develop. HMT and thee-Envoy should adopt a very light touch, butmonitor them to ensure that equitable andefficient outcomes are achieved.

Organisational Capability

No Conclusion Lead In support/ Deadlineresponsibility other key

players

22

23

24 CSCMThe Civil Service Corporate ManagementCommand should ensure that new arrangementsfor Civil Service pay encourage the delivery of thee-government agenda.

The responsibilities of Permanent Secretaries andMinisters for ESD should be set out in their termsof appointment and should be taken into accountin the assessment of their performance.

There should be six-monthly Cabinet meetings one-government, the first of which should be held inOctober 2000, to fit alongside the e-businessstrategy process.

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Organisational Capability

No Conclusion Lead In support/ Deadlineresponsibility other key

players

25

26

27

28

29

30 December2000

DETRDETR should include an Information Agegovernment performance indicator in the BestValue performance framework.

By December2000

LGA, IDeADETRLocal government should undertake to meet the 2005target for 100% of services being available online.

FromDecember2000onwards

Office of thee-Envoy

DepartmentsSecretaries of State should consider the benefitsof switching electronic delivery of governmentservices to alternative service providers in thepublic, private and/or voluntary sectors whereprogress is slow. This might involve the creationof dot.gov start-ups: new entities to delivercross-cutting and innovative services, or tocompete with traditional delivery mechanisms.

From March2001onwards

Office of thee-Envoy

HMT,departments,agencies, LAs

All SDAs should include clear targets for thepriority services to be brought online. For priorityservices, SDAs should include:

• date for full implementation;

• milestones, setting out what should bedelivered by interim dates; and

• as far as can be determined, a list of servicesthey should ‘join up’ with, when and how.

From Oct2000onwards

Departments,agencies, LAs

Office of thee-Envoy

The e-Envoy should build on the prioritisationframework attached at Annex F to prioritise keystrategic services across government, as describedin section 7.3.

From Oct2000onwards

HMTOffice of thee-Envoy

The Office of the e-Envoy should use its dual keyresponsibility for the release of ESD funding toensure that new investment in ESD is usedeffectively. Release of funding should beconditional on satisfaction that plans put forwardsupport the government’s wider objectives fore-government and that departments haverobust plans for realising efficiency gains.

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Organisational Capability

No Conclusion Lead In support/ Deadlineresponsibility other key

players

31

32

33

34 By March2001

Departments,agencies, LAs

Office of thee-Envoy

An ESD incubator should be created within the e-Envoy’s office as a home for start-up governmentESD ventures. It will rapidly fund and develop,jointly with the private and voluntary sectors,prototypes from the public, the private and thevoluntary sectors.

By Dec 2000and thenongoing

Supportingdepartmentsandagencies, e-Envoy

Leaddepartmentsand agencies

There should be a small number of demonstratorproduct managers in the public, private andvoluntary sectors, responsible for deliveringjoined-up content to key customer segments.The e-Envoy should identify four key customersegments and a lead department for each one.The product manager will then be responsible fordeveloping joined-up electronic services to theidentified customer group.

By March2001

DETR, LGA,LAs

IDeAIDeA should support the implementation of local e-government strategies. IDeA should continue to:

• develop national projects for local government;

• provide training and consultancy advice tolocal authorities developing their strategies;

• develop central–local pilots; and

• maintain links with the key central bodies.

It should also support the dissemination andinterpretation of best practice information andguidelines.

FromDecember2000onwards

DETR, LAsGORsDETR should be responsible for developing astrategy with the Office of the e-Envoy to achievea step-change in the electronic delivery of localauthority services; and DETR should consider thepracticalities and resource implications of workingthrough Government Offices in the Regions toensure that:

• individual local authority e-strategies areapproved in line with e-Envoy guidance andtemplates;

• regional network synergies in investments areidentified; and

• central government funding for approvedplans is targeted on areas where funding ismost difficult and needs are the greatest.

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Organisational Capability

No Conclusion Lead In support/ Deadlineresponsibility other key

players

35

36

37

38

39

40

41 From Dec2000onwards

CMPSOffice of thee-Envoy

The e-Envoy and HMT should agree arrangementsto establish a research function to gather anddisseminate online data on ESD and e-governmentby autumn 2000. The function should be in placeby March 2001.

CMPS should work with the Office of the e-Envoyto create a knowledge pool for e-governmentfrom March 2001.

From Oct2000onwards

Office of thee-Envoy

There must be clear organisational separationbetween those responsible for technical standardssetting, infrastructure development and theoperation of common services related to the UK o03

From Dec2000onwards

Office of thee-Envoy

Departments,agencies, LAs

All departments and agencies must implementmandatory standards developed and agreed aspart of the e-government strategy.

By March2001

Office of thee-Envoy

Departments,agencies, LAs

Establish an e-business unit within each majorservice delivery organisation, responsible for thefront-end delivery of electronic services byDecember 2000.

By Dec 2001 PermanentSecretaries,boardmembers,fromdepartmentsand mainagencies

CMPSAll Permanent Secretaries and board-level civilservants from key departments and agencies shouldattend the leaders@e-government course or a similarcourse. CMPS should consider what adjustmentsshould be made to the course to make it suitablefor each board by December 2000.

CMPS should also consider ways of raisingawareness of the possibilities and implications ofnew technology amongst all those involved inservice delivery.

The government should extend pilots ofdepartmentally designed incentive schemes to theESD units of all departments. Bonuses should betightly linked to achievement of key targets.

By December2000

Office of thee-Envoy,departments,agencies, LAs

CSCMThe Civil Service Corporate ManagementCommand in the Cabinet Office shouldcommission a study to establish by December2000 the current and potential future shortfalls inskills, and approaches to tackling them.

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Organisational Capability

No Conclusion Lead In support/ Deadlineresponsibility other key

players

42

43 Oct 2000E-MinistersE-GovernmentMinister, E-Envoy

The e-Government Minister and e-Envoy shouldtogether champion implementation of this reportas part of the overall e-government strategy.

The e-Envoy should have overall responsibilityfor monitoring progress towards this report’srecommendations and should report on progressas part of his annual report to the Prime Minister.He should work with Information Age Championswho will be responsible for implementation intheir own departments and should report onprogress in their e-business strategies.

By June 2001 IAGCsHMT, CSCMHM Treasury should commission a study toexamine the people and asset implications of ESD,working jointly with CSCM on the people aspectsand looking by service provider at: the likelytiming of changes; the number of people affected;the likely need for and distributions of physicalnetworks. The study should look across the rangeof government activity with a view to optimisingthe physical network of assets to provide servicesfor all as efficiently as possible.

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1. The creation of the Performance andInnovation Unit (PIU) was announced by thePrime Minister on 28 July 1998 as part of thechanges following a review of theeffectiveness of the centre of government bythe Cabinet Secretary, Sir Richard Wilson.The PIU’s aim is to improve the capacity ofgovernment to address strategic, cross-cutting issues and promote innovation in thedevelopment of policy and in the delivery ofthe government’s objectives. The PIU is partof the drive for better, more joined-upgovernment. It acts as a resource for thewhole of government, tackling issues thatcross public sector institutional boundarieson a project basis.

2. The unit’s acting Director is Jamie Rentouland it reports direct to the Prime Ministerthrough Sir Richard Wilson. A small centralteam helps recommend project subjects, andmanages the unit’s work. Work on projects iscarried out by small teams assembled bothfrom inside and outside government. Abouthalf of the current project team staff aredrawn from outside Whitehall, including fromprivate sector consultants, think tanks, NGOs,academia and local government.

3. Comprehensive information aboutother PIU projects can be found on thePIU’s web site at http://www.cabinet-office.gov.uk/innovation.

ANNEX A: THE ROLE OF THE PERFORMANCE ANDINNOVATION UNIT

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1. This report was prepared by a multi-disciplinary team guided by a ministerialsponsor and an advisory group withgovernment and non-governmentrepresentation.

The team2. The team comprised:

• Andrew Adamyk – on secondment fromMicrosoft

• Jon Ainger – on secondment fromAndersen Consulting

• John Clark – project team leader,independent economics and strategyconsultant

• Jon Coles – on secondment fromDepartment for Education and Employment

• Tom Dibble – moved from GouldGreenberg Carville/NOP

• Nicholas Lodge – on secondment, parttime, from the ITC

• Paul O’Sullivan – permanent member of PIU

• Rachel Phillipson – government economist,PIU.

3. The team was assisted by Tasnim Zavery –PIU, Alistair Boon – PIU, Stephen Hale – PIU,and Anwar Choudhury – Central IT Unit,Cabinet Office.

Sponsor minister4. The work of all PIU teams is overseen bya sponsor minister, in this case Michael WillsMP, Parliamentary Under Secretary of Stateat the DfEE.

Advisory group5. In addition, the team was greatly assistedby being able to draw on the experience andadvice of its advisory group. The teambenefited from an extensive process ofconsultation and review with the advisorygroup throughout the project. The group,chaired by Michael Wills, comprised:

• Stephen Aldridge – Chief Economist, PIU

• Alex Allan – e-Envoy

• Jonathan Bloomer, Keith Bedell-Pearce –Prudential – Egg

• Anna Bradley – National ConsumerCouncil

• David Cooke – Central IT Unit

• Paul Foley – De Montfort University

• Patricia Hewitt – e-Commerce Minister,Department for Trade and Industry

• Anne Lambert – OFTEL

• Ian McCartney – e-Government Minister,Cabinet Office

• James Purnell – No 10 Policy Unit

• Barry Quirk – Chief Executive Officer,London Borough of Lewisham

• Jamie Rentoul – PIU

• Steve Robson – HM Treasury.

6. The team gratefully acknowledges theadvice and time given by each advisorygroup member. The team also acknowledgeswith thanks the contributions of all whooffered advice, participated in meetings orworking groups, or assisted in any way.

ANNEX B: THE PROJECT TEAM, SPONSOR MINISTER ANDADVISORY GROUP

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1. The project methodology was rooted inan evidence based and outward-lookingapproach. The project team undertook anextensive process of data gathering, researchand consultation.

2. Review of existing work: A vastamount of research had already beenundertaken on ICT and e-government, uponwhich the project team was able to draw.This included:

• the PIU report e-commerce@itsbest.uk;

• CITU’s work on guidelines and frameworks,the e-government strategy andinternational benchmarking;

• consumer research through the People’sPanel, such as research on citizens’demand for 24x7 delivery, consumerresearch on change of address andbranding;

• reports such as ‘view from a queue’ andthe LSE report for the NAO Government onthe Web; and

• a large amount of research by privatesector and academic organisations.

3. Details of these and all the other reportscan be found in annex F.

4. Extensive process of meetings: acrossthe public, voluntary and private sectors. A listof those we contacted is given in annex E.The work also greatly benefited from theassistance of the project advisory group(see annex B), two away-days organisedby BT and Granada and a number ofconferences and seminars which we attended.

5. Research: The team undertook research,commissioned market research and workedclosely with a number of ongoing researchexercises:

• a market research company, MORI, wascommissioned to undertake qualitativeresearch of consumers’ views andpreferences for electronic service deliveryby government through focus groups,Omnibus quantitative research and theMORI e-panel. A report of this research isgiven in annex D;

• the team assisted MORI with their researchon a report for BT on the state of readinessfor e-government, across citizens and thepublic sector;

• the team worked closely with HM Treasuryin their work on the knowledge economyreview (one of the cross-cutting reviewswhich formed part of the 2000 SpendingReview);

• international research – the teamundertook a series of fact-finding trips tothe Netherlands, Sweden, Finland and theUS, and conducted video-conferences withAustralia and Singapore. The team liaisedwith CITU and the CCTA, who wereresearching for international benchmarkingpurposes at the same time.

Note: One point that should be borne inmind when viewing the internationalevidence cited in the report is that thedifferent public sector organisations in thedifferent countries investigated have verydifferent starting points, depending on theattitudes of the public and the history ofgovernment organisation. For example:

ANNEX C: PROJECT METHODOLOGY AND RESEARCH

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Country Starting point

Citizens Government

“The idea of the public sector being atthe forefront of technology is regardedmore seriously in Australia than in theUK”, even though the stated wayforward is to be market led.5

Government is widely recognised as adriver of the use of digital technologies.“In some cases government can beseen to be leading the market as wellas following it.”4

Australia

Government agencies have scope to beradical and to experiment. Ministersare quite hands off. Once money isapproved agencies set their ownpolicies.3

Massive Internet penetration – over50% by March 1999(Statskontoret/SCB: Statistik Arsbok1999). High degree of computerliteracy taught in schools. Many workersbenefit from fact that home computeris allowed from companies tax free.

Sweden

From the early 1980s Singapore hasbeen building systems with commonitems that could be used acrossgovernment (e.g. name, address, etc).Historically integrated governmentenvironment – technically and culturally– in which departments and agencieswillingly act on orders from the centre.ESD flows on quite naturally from this.

Used to a unique identifier and toprescriptive government. “I have hada number since the day I was born andas I grew up the number became partof me.” 2

Singapore

“The Dutch [culture] of consensusgovernment stresses co-operation andknowledge interchange…high degreeof information sharing…and largenational databases.”1

Accept a high degree ofinformation/data sharing withingovernment.

Netherlands

Chicago had already developed asingle call centre, which alldepartments were plugged into.The Chicago portal on the Internetwas seen as an extension of that and,therefore, more easily accepted.

Used to a single number through whichto contact government (311), sounderstood the single web presence ofChicago Online. Also, Chicago sharesin the rest of the US’s high levels ofInternet penetration – 45% andgrowing by February 2000 (NUAInternet Surveys).

United States(Chicago)

Because government was sodysfunctional 13 years ago all thetechnical pieces for effective ESDwere put together early on.

Live in a hi-tech state, the home ofMicrosoft. Culturally they are ready forand even expect far-reaching ESD.

United States(WashingtonState)

1 E-government. An international study of online government commissioned by Cable and Wireless Communciations. Kate Oakley.

February 2000. p.35.2 Interview by ESD Team with members of the Singapore Infocomm Development Authority. 22 May 2000. 3 Interview with Olov Osterber of the Statskontoret, Sweden. 8 May 2000. 4 E-government. An international study of online government commissioned by Cable and Wireless Communciations. Kate Oakley.

February 2000. p.13.5 E-government. An international study of online government commissioned by Cable and Wireless Communciations. Kate Oakley.

February 2000. p.13.

6. Investigation: by the team of a rangeof web-sites, run by departments, localgovernment, the private sector andinternational organisations.

7. Consultation exercise: The teamsought views from the public through apolicy review exercise on the No 10 web-site,6 consulted departments and otherorganisations and obtained feedback frompublic sector organisations on our emergingconclusions.

8. In undertaking the analysis, particularaccount was taken of the implications forthe government’s existing broadercommitments. These include those onpublic expenditure and the importance ofunderstanding the disproportionate impactpolicies can have on some sectors of society,including women, ethnic minorities and theelderly. Indeed, ESD has the potential, giventhe policies to ensure access and take-up,to dramatically improve the participation of under-represented groups within localcommunities and government’s decision making.

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6 See www.number-10.gov.uk/default.asp?PageID=949

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4Ps

Analysys

Andersen Consulting

Andersen Consulting research facility –Northbrook, Illinois

Audit Commission

BBC Online

Better Information Age Government

BREMA

Brighton and Hove Council

Bristol Council

British Telecom

Boston City, Management and Information Services

Cabinet Office

Cable & Wireless

Central Computer andTelecommunications Agency

Central IT Unit

CISCO

City of Chicago – Business andInformation Services

Confederation of British Industry

Consensus Research

Consumer Association

Council for Excellence in Government

Customs and Excise

Data Protection

De Montfort University

Deloitte and Touche

Department for Culture, Media andSport

Department for Education andEmployment

Department for Social Security

Department of Environment, Transportand the Regions

Department of Health

Department of Information Services,Washington

Department of Trade and Industry

Digital Citizen

Edentity

EDS

E-Envoy’s office

EMC Computer Systems

Employment Service

Ezgov.com

Fabian Society

Federation of IT in Local Government

First Direct

First Software

GovWorks, Inc

Granada

Granada Media

Henley Centre

HM Treasury

HMT, PFI taskforce

Home Office

IBM

ICL

Improvement and Development Agency

Impower

ANNEX D: ORGANISATIONS CONSULTED

Infocomm Development Authorityof Singapore

Information Society Initiative

Inland Revenue

Institute for Public Policy Research

Kable

Kent County Council

Knowsley Council

Lewisham Council

Liverpool County Council

Local Government Association

London School of Economics

Lord Chancellor’s Department

Marconi

Meridian TV

Minister for e-Government, CabinetOffice

Ministry of Finance, Finland

Ministry of the Interior, Netherlands

MORI

N M Rothschild & Sons Limited

National Consumer Council

National Partnership for ReinventingGovernment – Washington DC

Netgov.com

New Local Government Network

Newham Council

No 10 Downing Street

NTL

Office for Intergovernmental Solutions,Washington DC

Office of Government Commerce

Office of Government Online, Australia

Ondigital

Open

OSI

PA Consulting Group

Partnerships UK

Passport Agency

PKI Overheid, Netherlands

Powys Council

Prison Service

Prudential

Real Time

Saga

SAT Steering Group

Science Policy Research Unit, SussexUniversity

Smile

Social Exclusion Unit

Statskontoret, Sweden

Suffolk Council

Telematics Development Trust

United Broadcasting

University College London

University of Leeds, Research Centrefor Future Communications Studies

Upmystreet.com

Washington State, Department ofInformation Services

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RReeffeerreenncceess

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Key references for the reportBooz-Allen and Hamilton, ‘AchievingUniversal Access’, March 2000.

British Telecom, ‘E-government: Ready orNot?’, July 2000,http://www.bt.com/egovernment

Cabinet Office, ‘People and Public Services –A review of research into people’sexpectations and experiences of publicservices’, Office for Public Management &Acumen, July 1998.

Cabinet Office, ‘Electronic Government:The View from the Queue’, October 1998,http://www.citu.gov.uk/research/viewqueue/index.htm

Cabinet Office, ‘Modernising Government’,White Paper, 1999, http://cabinet-office.gov.uk/moderngov/1999/whitepaper/4310.htm

Cabinet Office, ‘E-government – A strategicframework for public services in theinformation age’, April 2000.

Cabinet Office – Service First Unit, ‘Deliveryof Public Services, 24 Hours a Day, SevenDays a Week (24x7)’, September 1999.

Cabinet Office, ‘E-government: a strategicframework for public services in theInformation Age’, April 2000.

Cable & Wireless Communications,‘E-government – an international study ofonline government’, February 2000.

CITU, ‘Electronic Delivery of BetterGovernment Services – An internationalcomparison’, April 2000.

CITU, ‘Information Age Government:Benchmarking Electronic Service Delivery’,June 2000http://www.citu.gov.uk/intl_menu.htm

Coase, R, ‘The Nature of the Firm’,Economica, 4, 1937, pp 386-405.

Council of the European Union CEC,‘e-Europe 2002, an Information Societyfor All, Action Plan’, June 2000.

Dataquest, ‘citizen-facing governmentportals: profiles of an emerging providerclass’, 10 January 2000.

DTI, ‘Is IT for All?’,http://www.itforall.org.uk/resources.html,February 1999.

DTI, ‘Responses to: Building Confidence inElectronic Commerce – A consultationdocument’, URN 99/891, April 1999.

DTI, ‘Closing the Digital Divide: Informationand Communication Technology in DeprivedAreas’, Report of Policy Action Team 15,November 1999.

Economist Intelligence Unit & AndersenConsulting, ‘Vision 2010. Forgingtomorrow’s public-private partnerships’, 1992.

Futura.com, ‘Results of the August 1999Survey’, Research Centre for FutureTechnology, University of Leeds.

ANNEX E: REFERENCES

Forrester Research, ‘Braving EU NetRegulation’, January 1999.

Forrester Research, ‘The Portal Race is Over’,28 January 2000,http://www.forrester.com/ER/Press/Release/0,1769,234,FF.html

Henley Centre & MORI for British Telecom,‘E-Government Report’, June 2000.

HM Treasury, ‘Access to Financial Services’,Report of Policy Action Team 14, November1999.

Independent Television Commission, ‘The ITCCode of Advertising Standards and Practice’,Autumn 1998, http://www.itc.org.uk

Information Age Champions, Guidelineson Privacy and Datasharing,http://www.iagchampions.gov.uk/guidelines/privacy/datasharing.html

Intergovernmental Advisory Board (US),‘Integrated Service Delivery – GovernmentsUsing Technology to Serve the Citizen’,August 1999.

KPMG Consulting, ‘Britain ready for onlinepublic services. The implementation of e-government’, 2000.

Milgrom, P & Roberts, J, ‘Economics,Organisation and Management’, Prentice-Hall, 1992.

MORI for the PIU, ‘What’s in IT for theCitizen? Delivering Public Services ThroughElectronic Channels’, April 2000.

National Audit Office, ‘Government on theWeb’, December 1999,http://www.nao.gov.uk/publications/ nao reports/990087.htmNational Consumer Council, ‘The InformationSociety: Getting it Right for Consumers’,April 1996.

National Consumer Council, ‘ConsumerPrivacy in the Information Age’, PD65/L/99,December 1999,http://www.ncc.org.uk/pubs/report1.htm

Neilsen, J, ‘Designing Web Usability: ThePractice of Simplicity’, New Riders, ISBN1562058 10X, December 1999.

Performance and Innovation Unit,‘E-commerce@its.best.uk’, September 1999,http://www.cabinet-office.gov.uk/innovation/1999/ecommerce/ index.htm

Performance and Innovation Unit, ‘Counter Revolution: Modernising thePost Office Network’, June 2000.http://www.cabinet-office.gov.uk/innovation/2000/postoffice/postindex.htm

Performance and Innovation Unit, ‘Wiringit Up’, January 2000. http://www.cabinet-office.gov.uk/innovation/2000/wiring/index.htm

Privacy International, ‘Privacy and HumanRights – An International Survey of PrivacyLaws and Practice’, 1999,http://www.privacyinternational.org

The People’s Panel, http://www.cabinet-office.gov.uk/servicefirst/index/pphome.htm

SOCITM & MAPIT, ‘Better Connected? A year2000 snapshot of local authority websites’,Spring 2000.

Sullivan, D & Quirk, B, ‘Where it’s @.Lewisham’s strategy for getting connected’,Borough of Lewisham, 2000.

Which? ‘Are you Being Served? The Growthof an E-Nation’, Which? Online, InternetSurvey 1999.

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e-Business planning1. Two critical elements form the backboneof e-business planning:

a. e-business strategy development(the overall e-business plan for theorganisation as a whole);

b. e-business case development(for individual ESD projects).

e-Business strategy development(overall organisation plan)2. CITU, as an annex to their e-governmentstrategy document, have created a set ofimplementation guidelines for thedevelopment of organisational e-businessstrategies (there are separate guidelines forLocal Government). The e-business strategiesare key to helping departments, agencies andlocal authorities work out and explain howthey intend to converge with government-wide standards and meet the overall target,and will be completed by October 2000.

3. Ultimately electronic service deliveryshould be seen as a core part of the overallbusiness strategy for any organisation, ande-strategy should form a seamless part ofoverall strategy. However, there is merit inthe short term for government to ‘force thepace’ by requiring all governmentorganisations to go through the planningand thought processes that e-strategydevelopment implies. But these strategiesneed to address explicitly, service by service,whether electronic service delivery willsubstitute or complement traditionalchannels for delivering services. They needalso to recognise that it is important to

appraise and compare the costs and benefitsof new investment in both electronic andtraditional service delivery channels. At themargin, the case for continued investmentin many traditional channels for deliveringservices may remain strong.

4. Below, we have included more detail one-business strategy development.

e-Business case development(individual projects)5. Business cases are the basic building blockallowing companies to make investmentdecisions, venture capital houses to decidewhich new idea to back, and governments toallocate scarce resources. There are a numberof approaches which can be used to helpinvestment decision making; but in largeorganisations there is merit in a single,agreed approach to enable comparisonsto be made on a like for like basis.

6. Government already has in place sometools to enable the development of businesscases. At a general level, HM Treasury’sAppraisal and Evaluation in CentralGovernment provides advice and guidancecovering many major aspects of public sectorinvestment decisions. The recent Major ITProjects Review includes a Business Case Modelat Annex D, which details the managementsteps and checkpoints necessary to create atotal cost of ownership approach toevaluating IT investment.

7. This annex is not intended to duplicatethese pieces of guidance; instead it isintended to address the current gap whichexists for tools to assess the investment in

ANNEX F: E-BUSINESS PLANNING ANDPRIORITISATION FRAMEWORK

front-line electronic delivery of services.In terms of key issues, uncertainty and rapidchange, this area is more comparable withthe ‘new economy’ marketplace than themarketplace for back-office IT systems,and below we include some guidancefor government officials based aroundlessons learned from the ‘new economy’private sector.

Key issues to consider during theplanning process8. In this section we include detail onthe key issues to be borne in mind duringe-business strategy development fororganisations, and provide an e-businesscase template for individual ESD projects.

e-Business strategy development

• Understanding your customers’ needs

• Working with the private and voluntarysectors

• Meeting the 2005 target: Create transitionplan

• Planning for uncertainty

Understanding your customers’ needs

9. For outcomes to be customer focused,a clear understanding of who your maincustomer groups are is crucial not only todefining your take-up targets but also toexamining the possibilities for joined-upservice delivery. The e-business strategyshould include:

• definition of who your main customergroups are;

• an analysis of the likelihood of differentgroups of customers (customer segments)accessing services electronically;

• the results of working with othergovernment organisations to understandwhere you and they have commoncustomer groups; and

• future plans for joint working and deliveryof services.

Working with the private and voluntarysectors

10. Working with the private and voluntarysectors will be a fundamental part of theimplementation of electronic government –both in terms of getting services online, and(see chapter 7) in the competitive delivery ofelectronic government services. Crucialfactors to consider will include:

• the required extent and form ofgovernment intervention – some serviceswill be delivered by the private andvoluntary sectors and will require nogovernment involvement. In other casesjoint ventures or other partnerships willbe required. This needs carefully to beestablished, case by case, with thee-Envoy;

• examining any existing IT contracts toensure that anything crucial to ‘front end’delivery is not restricted by IntellectualProperty Rights (IPR) or other contractualrestrictions, so that access to the marketfor delivering e-government services bya range of providers is not constrained.If restrictions are found to exist, officialsshould take the following steps:

– inform the e-Envoy’s office, and theOffice of Government Commerce

– ensure that the key issues are includedin the next negotiation round with theIT provider (for example refresh clauses,or full scale recontracting).

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• ensuring that IT contracts currently beingnegotiated and in future planning do nothave provisions which could restrict accessto the market for the electronic delivery ofgovernment services by a range ofproviders. Issues to avoid include:

– IPR over software (e.g. forms,or processes, which would be need tobe used by third parties to carry outgovernment transactions); and

– any exclusivity in front-end servicedelivery.

Meeting the 2005 target: Create transitionplan

11. Developing an explicit transition planwill be crucial to the organisation’s ability tomanage the task of meeting the 2005 targetfor all services to be online. Key elements ofthis transition plan should include:

• appointing a senior individual to beresponsible for meeting the target;

• online take-up targets, by service;

• plans for rationalising and realising savingsfrom traditional service delivery channels –to include:

– plans to drive take-up of online services(marketing plans, access plans, etc);

– timing and staging of switchover and/orswitch-off;

– planning the decommissioning oftraditional channels – buildings andpeople.

Planning for uncertainty

12. The one certain thing aboute-government is that the future cannot bepredicted with certainty. Innovation intechnology and in business models will mean

sensible decisions taken today could well beredundant in 6 months. This has thefollowing implications for the planningprocess:

• the e-business strategy should bereviewed every 6 months (this is ‘industry’best practice, see Washington State’sDigital Government Plan, and the eNorwayAction Plan);

• build in regular check points andmilestones, and be prepared to copewith many iterations of project plans; and

• project plans and targets should usescenario planning to project alternative(at least 4) outcomes; these should beweighted by probability to provide a bestguess outcome.

13. The next section discusses the basicbuilding block of business planning: thebusiness case.

ESD business case template forindividual projects

Business case template:7

14. The business case needs to have thefollowing characteristics:

• it must grab the attention of the fundingbody, starting with an excellent executivesummary which explains concept andconvinces them to read on;

• it must be a useful management tool;

• it must be seen as a condition forobtaining funding; and

• it must include clearly defined goals,objectives and milestones.

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7 This section owes much to the 1999 PricewaterhouseCoopers pamphlet Three Keys to Obtaining Venture Capital, and to the McKinseyQuarterly 2000 article Valuing Dot-Coms.

15. The business case should contain thefollowing key sections:

• Executive summary

• Project description

• Rationale

• Organisation and management

• Customer analysis

• Marketing

• Funds requested and intended use

16. More details are set out below.

Executive summary

17. The executive summary should be just2-3 pages long, and only include vitalinformation. The vital information is:

• project overview (to sum up the basicconcept and aims);

• management team (to demonstrateability to deliver);

• product/service (what is the coreproduct/service, has it been developed,plans for future innovation);

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Context – key lessons to be learned from the private sector

Public sector investment is different in many respects to private sector investment. This sectiondoes not lift the private sector model wholesale, but instead seeks to draw lessons from theapproach taken in the private sector, and apply them where appropriate to the public sector.It is specifically addressed at projects looking to deliver front-line electronic services.

There are two key lessons which the public sector can usefully draw on:

• staged funding mechanisms to reduce risk and encourage high performance; and

• the vital importance of having the right management team in place before seekingfunding.

It is important to note that adopting some elements of the private sector approachdoes not require the venture to be profit making; the social dimension of governmentinterventions can be taken into account using the same basic analytical techniques.

Staged funding: A key aspect of the private sector approach to risk management ofventure capital is that money is given in tranches, and is dependent on the projectachieving or bettering its agreed targets. Many dot.com failures occur because they havebeen unable to obtain second, third or fourth round funding. This model could easily bereplicated in the public sector, and would reduce the risk to taxpayers of project failure.

Management team: A good business case is seen by many venture capitalists as merelya ‘qualifier’ for funding. In fact, the final decision is made on the credibility of the coremanagement team, their expertise, their ability to demonstrate previous experience, andanswer difficult questions about the proposal. Without an excellent management teamwho look like they can execute the plan, no funding will be forthcoming, however goodthe proposal. This is also true within government. Government organisations wishing tosucceed in raising money must put people with the right background and expertise on themanagement team, which pitches for the funding.

• market/customer (who are your customers,do they want/need the service, are thereany ‘competitors’ in existence);

• role of private and voluntary sectors inthe project;

• milestones completed to date (if any);

• statement on future plans; and

• summary of costs, benefits and overallassessment of project.

Project description

18. This section should describe the corebusiness of the project – what service or‘product’ is being put online, the status ofthe service or product and futuredevelopment plans.

Rationale

19. This section should describe why theproject is unique, and why government shouldbe funding this. It should cover the following:

• description of competitors: private sector,voluntary sector, and other governmentservices;

• rationale for government intervention –what is the case for government fundingof the project in whole or in part,particularly if there are private or voluntarysector bodies providing the service or whocould do so in the future?; and

• joined-upness: Are there any other publicsector providers you could link up with:

– technologically;

– because of the nature of the product orservice; or

– because the target groups overlap.

Organisation and management

20. This section should provide details of keymanagement team members and CVs with

evidence of track record of delivering previousprojects. The inability to demonstrate acapacity to deliver to plan, and/or giveconfidence to the financial providers that theproject is possible, is a ‘deal breaker’.

21. It should include details on theorganisation required to deliver the project,and the plans for coping with potentiallymassive take-up (there have been a numberof high profile private sector web-site failuresdue to the inability to cope with the higherthan expected numbers of visitors).

• Need for rapid scalability

• Are you prepared for rapid growth?

• Can you deliver the skill requirements?

Customer analysis

22. This section should describe the currentand future demand for the service orproduct, and profile expected customerbehaviour.

• Is there latent unmet demand?

• Profile of customers, by type, to allowbetter estimates of take-up and need

• Estimates of current and projected growthrates

• How will you measure customersatisfaction?

Marketing

23. This section should explain the ‘go tomarket’ strategy, with a clear explanationof how the service or product will bemarketed, priced (if appropriate),distributed (if necessary), etc.

• Marketing plan

• Pricing

• Distribution channels

• Promotion

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Funds requested and intended use

24. This section should provide thefundamental underpinning to the businesscase. The purpose is straightforward: toprovide information on a) the costs and b)the benefits of the project, over the lifetimeof the project. So far as possible these shouldbe expressed in monetary terms and reducedto a discounted NPV. But many of the socialreturns may be unquantifiable in monetaryterms. So far as possible these should beassessed using non-monetary indicators inorder to arrive at an overall assessment ofthe net social benefits of going ahead withthe project.

25. Standard business cases in the privatesector will include both the basic financialstatements and the NPV calculation. Sincethe basic financial data should be generatedin order to create the NPV calculation, thesefigures should be available and the financialstatements should be included. The keyfinancial elements are:

• income statement (to detail the costs(expenses) and revenue (if appropriate)of the project, and the net income);

• balance sheet (to detail the assets andliabilities of the project);

• cash flow statement (to detail the cashinflows and outflows, and provide asummary of end-of-year cash position).

Scenario planning for uncertainty26. A key aspect of the development of ane-business strategy or business case is theprojection of many variables into the future.This is extremely difficult in the electronicservice delivery world, because of very highlevels of change and rapid technologydevelopment.

27. This means that some form of scenarioplanning is appropriate.8 This requires thebusiness case to define the three or four keymetrics (for example, ultimate penetrationrates, transaction costs, etc) which will shapethe project over its lifetime.

28. The next step is to take a fixed point inthe future, when customer behaviour hasreached relative stability (say 10 years), andbuild four different possible outcomes basedon different values of the key metrics(ranging from very pessimistic to veryoptimistic).

29. The business case should then assess thepossible outcomes under each of these fourscenarios, and assign probabilities to eachone. For example, for a set of four possibleoutcomes, these could be 10%, 30%, 50%and 10% (totalling 100%). Of course theweighting given to each scenario is crucial,but this is a technique designed only to dealwith uncertainty, not eliminate it. A view canthen be taken of the central case for themost likely outcome of the project.

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8 Approach is taken from Valuing dot-coms: McKinsey Quarterly 2000.

Prioritisation framework30. The preceding sections have set outhow to work up a business case for an ESDoption. However, in a world constrained by theavailability of people with the necessary skills andexpertise, and limited funding, choices need tobe made between potential ESD projects.

31. Ideally, the benefits, costs and timing ofelectronic delivery projects would be easilyquantifiable and decisions could be made onthe basis of greatest net present value. Inpractice, the information needed to do this isfrequently absent or it will only be possible toreach qualitative judgements because, forexample, many of the benefits of ESD areunquantifiable, either in monetary or anyother terms. In these circumstances, in orderto be able to prioritise between differentpotential ESD projects, it is necessary to

establish criteria by which to compareprojects and to make selections.

Establish criteria32. The key criteria for selecting betweenprojects are the size and timing of costs andbenefits. These are illustrated in the diagrambelow, but their significance will vary fromproject to project. For example, in manycases electronic service delivery will ultimatelybe a substitute for traditional channels ofservice delivery and ESD will result in thescaling back of traditional deliverymechanisms. In these cases, the resultingpotential cost savings will figure prominentlyin the decision-making process. In othercases, ESD may complement traditionalchannels and this element will thereforenot feature at all.

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Figure 1: The key criteria for prioritising potential ESD projects

ESDdecisioncriteria

Scaleofcosts

Scaleofbenefits

Timing

Volumeof business

Benefitspertransaction

Costsincurred

Costs saved

Benefits

Costs

Physical assets released forother uses

Staff

Other

Infrastructure

Marketing

Other

Time saved

Other

No. ofcitizens

Frequency ofinteraction

Targetgroup size

% penetration

33. Many of these criteria will have been setout in the business case. However, there arecomplex linkages between them, which needto be assessed as part of the prioritisationprocess. For example, the scale of benefitswill depend on factors such as the volume ofbusiness, which in turn will depend on howmany people will use the service and howoften. The number of users will depend onhow big the target audience is (for exampleall students) and the predicted penetration ofthe electronic service with this audience.Audience penetration will depend on levels ofmarketing expenditure – a major determinantof costs. These inter-relationships need to beset out in the business case.

34. Further, many of the criteria may not besusceptible to ‘hard analysis’. Quantitativeevidence should be used wherever they arereliable, consistent and relevant. However,there is little point in using ‘hard data’ simplybecause they seem to be objective or areeasy to obtain. Typically, hard data on costswill be easier to obtain than benefits. Thisdoes not mean that costs are more importantthan benefits. For example, it may be difficultfully to quantify the benefits to theunemployed of using an online job searchrather than a job centre. It is relatively easy,on the other hand, to calculate the costs ofsetting up an online jobs site.

35. Having determined the key decisioncriteria, a mechanism is then needed forprioritising projects and making selections.

Selection36. Decision making is rarely easy,particularly in the complex world ofelectronic service delivery, where trade-offsbetween widely differing projects willinevitably have to be made. However, suchdecisions must be made, and made quickly,if UK government ESD is not to lag behindcitizens’ expectations and international rivals.

37. In selecting between different ESDoptions there are three key steps:

• eliminating manifestly poor projects. Someprojects will be worse than others againstall criteria, i.e. they offer lower benefits,have higher costs and take longer toimplement. These should be rejected;

• eliminating projects which offer noadvantages over alternatives. In otherinstances project A may be better thanproject B on some criteria, and no worseon others. In these circumstances, projectA is superior to B and the latter can berejected;

• making trade-offs. In most instances,however, project A will be better thanproject B on some decision criteria, butworse on others. Reaching a decision thenrequires trade-offs to be made. You needto give up something on one criterion toachieve more on another. Consequencetables are a good way of going aboutmaking these trade-offs in a rigorous andsystematic way.9

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9 See Smart Choices by Hammond, Keeney & Raiffa, HBS Press. 1999.

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An example

38. Consider the hypothetical consequencestable for the four ESD options below. Forease of explanation, a limited number ofdecision criteria are adopted.

39. From this table it is clear that Option 4is worse than Option 1 along all criteria. Itshould therefore go to the bottom of the list.Option 3 is as good as Option 1 for mostcriteria except speed and set-up cost.Option 1 is therefore superior to Option 3.

40. However, trade-offs are required to choosebetween Options 1 and 2. This decision doesnot depend on those criteria which have anequal rating for the two options. Theconsequences table therefore reduces to:

41. The decision thus boils down to whetherthe cost savings to the government serviceprovider from Option 1 outweigh the timesavings to the citizen from Option 2. Tomake this trade-off the key step is to assesshow the cost savings in (say) Option 2 varywith the time savings. It might, for example,be the case that, if the investment spendingunderpinning Option 2 was re-deployed to

give more emphasis to cost savings, the timesaving per transaction would fall to 70minutes whilst the cost saving to governmentwould rise to £40m p.a.

42. The consequences table would thenlook like:

43. On this basis, Option 2 should takepriority over Option 1 since, potentially,it offers equal cost savings to governmentservice providers but greater time savingsper transaction for citizens.

44. Clearly, the key and most difficult part ofthis prioritisation process is making trade-offsbetween the decision criteria. To makeselections this has to be done, but it ispossible to do so in a relatively rigorous wayeven if a degree of judgement is required.In the above example the final priority rankingis: Option 2, Option 1, Option 3, Option 4.

ESD Options

Decision criteria: Option 1 Option 2 Option 3 Option 4

Size of market/Maximum potential no. of users 15 15 15 10

Penetration forecast (%) 10 10 10 5

Time saved per transaction (mins) 60 90 60 15

Set-up cost (£m) 3 3 4 7

Ongoing costs (£000 per month) 30 30 30 50

Costs savings (£m p.a) 40 30 40 –

Speed of implementation fast fast medium slow

ESD Options

Decision criteria: Option 1 Option 2

Time saved per transaction (mins) 60 90

Costs savings (£m p.a) 40 30

ESD Options

Decision criteria: Option 1 Option 2

Time saved per transaction (mins) 60 70

Costs savings (£m p.a) 40 40

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ADSL Asymmetric Digital Subscriber Line, one way of getting broadband Internet access.http://www.adsl.com/

ATMs Automated Teller Machines, also know as ‘‘hole in the wall’’ cash machines.

B2B Business to Business.

B2C Business to Consumer.

BASDA Business and Accounting Software Developers Association. http://www.basda.org/

CCTA Central Computer and Telecommunications Agency. http://www.ccta.gov.uk/

CEO Chief Executive Officer.

CERN European Organisation for Nuclear Research. http://cern.web.cern.ch/CERN/

CITU Central Information Technology Unit, part of the Cabinet Office.http://www.citu.gov.uk/

CMF Capital Modernisation Fund. http://www.hm-treasury.gov.uk/docs/1999/capmfbidg.html

DCMS Department of Culture, Media and Sport. http://www.culture.gov.uk/

Demos Independent UK think tank. http://www.demos.co.uk/

DETR Department of the Environment, Transport and the Regions.http://www.detr.gov.uk/

DfEE Department for Education and Employment. http://www.dfee.gov.uk/

Dot.com Label for start-up companies whose business predominantly involves the Internetto deliver services or goods.

DSS Department of Social Security. http://www.dss.gov.uk/

DTI Department of Trade and Industry. http://www.dti.gov.uk/

DTV Digital Television.

E-Envoy Government office with current responsibility for making the UK the best place inthe world for e-commerce. http://www.e-envoy.gov.uk/

ESD Electronic Service Delivery.

G2B Government to Business.

G2C Government to Citizen.

G2G Government to Government.

GDP Gross Domestic Product.

GGP Government General Practioner.

HMCE Her Majesty’s Customs and Excise. http://www.hmce.gov.uk/

ANNEX G: GLOSSARY

HMSO Her Majesty’s Stationery Office. http://www.hmso.gov.uk/

HMT Her Majesty’s Treasury. http://www.hmt.gov.uk/

HTML Hypertext Mark-up Language. http://www.w3.org/MarkUp/

HTTP Hypertext Transfer Protocol. http://www.w3.org/Protocols/

IAGC Information Age Government Champions. http://www.iagchampions.gov.uk/

ICT Information and Communication Technology.

IDA Infocomm Development Authority in Singapore. http://www.ida.gov.sg/

IDeA Improvement and Development Agency for Local Government.http://www.idea.gov.uk/

IPR Intellectual Property Rights.

IR Inland Revenue. http://www.inlandrevenue.gov.uk/

ISB Invest to Save Budget. http://www.cabinet-office.gov.uk/eeg/1999/isb.htm

ISP Internet Service Provider.

IT Information Technology.

LG Local Government.

LGA Local Government Association. http://www.lga.gov.uk/

MAXI Government ESD service from Victoria, Australia. http://www.maxi.com.au/

NAO National Audit Office. http://www.nao.gov.uk/

NCC National Consumer Council. http://www.ncc.org.uk/

NGO Non-Governmental Organisation.

NHS National Health Service. http://www.nhs.uk/

NIC National Information Consortium in United States. http://www.nicusa.com/

NLIS National Land Information Services. http://www.nlis.org.uk/

NMT New Media Team, part of CITU.http://www.iagchampions.gov.uk/guidelines/websites/websites.txt

OECD Organisation for Economic Co-operation and Development. http://www.oecd.org/

Ofsted Office for Standards in Education. http://www.ofsted.gov.uk/

Oftel Office of Telecommunications, the regulator for the UK telecoms industry.http://www.oftel.gov.uk/

ONE Government initiative testing fundamental changes to the Welfare State.http://www.one.gov.uk/

PIN Personal Identification Number.

PAT Policy Action Team on deprived urban areas. http://www.pat15.org.uk/

PFI Private Finance Initiative. http://www.pfi-online.com/

PIU Performance and Innovation Unit. http://www.cabinet-office.gov.uk/innovation/

PKI Public Key Infrastructure.

PPP Public Private Partnership.

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SDA Service Delivery Agreement.

SME Small or Medium-sized Enterprise.

SOCITM Society of Information Technology Management. http://www.socitm.gov.uk/

STB Set Top Box which sits on top of (or often under) a television set.

UMTS Universal Mobile Telecommunications System, also called ‘‘third generation’’or ‘‘3G’’ mobile telephony. http://www.umts-forum.org/

URL Uniform Resource Locator, or ‘‘web address’’.

WAP Wireless Application Protocol. http://www.wapforum.org/

XML eXtensible Mark-up Language. http://www.w3.org/XML/

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Performance and Innovation UnitCabinet OfficeFourth FloorAdmiralty ArchThe MallLondon SW1A 2WHTelephone 020 7276 1452Fax 020 7276 1407E-mail piu@cabinet-office.x.gsi.gov.ukWeb www.cabinet-office.gov.uk/innovation

© Crown copyright 2000

Publication date September 2000

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Ref: CABI 00-6374/0009/D24