III UK ONLINE |
49. In our July 1999 Report we devoted some space
to discussion of the issue of the 'information divide'. We suggested
that there was a danger that "those people without jobs which
involve regular use of computers, without means of buying the
equipment needed to get onto the internet at home, or who are
currently unable or unwilling to use computers may miss out on
the benefits which it has been predicted electronic commerce might
provide". We agreed with the Government's objective to prevent
the formation of a class of 'information poor', and discussed
a number of policy issues in relation to the threat of an 'information
divide' developing within society. We raised issues such as the
skills required and the cost of access, and called for a national
debate on how the universal service concept could be applied to
50. The Government response of October 1999 stated
that the Government was "committed to creating a truly inclusive
information society" and noted that addressing "e-exclusion"
had been identified as one of the roles of the e-Envoy. The response
listed some initiatives taken, including the IT for All centres,
the proposed IT Learning Centres, the recycling of computers to
"200,000 deprived families", and tax incentives to encourage
companies to provide employees with computers at home.
51. In oral evidence in December 2000, Patricia Hewitt
admitted that "there is a very real digital divide ".
Policies designed to increase the take-up of Internet and other
digital services may indeed have the effect of increasing
the digital divide, unless active steps are taken to ensure that
those excluded for whatever reason are enabled or encouraged to
52. The Government is justly proud of the global
figures showing availability of Internet access in homes. In the
Annual Report of September 2000 it quoted figures from the Office
of National Statistics to show that in March 1999 the number of
connected households was 13% and one year later 25%. This growth
has continued; the ONS report of 19 December 2000 showed that
by September 2000 this figure had risen to 32 %, some 7.8 million
53. Disturbing trends are, however, revealed in the
ONS Reports. Looking by social class at the number of adults who
have accessed the Internet, the ONS shows that 71% of professionals
have done so, 46% skilled non manual, 33% skilled manual but only
26% unskilled. 72% of adults accessed the Internet in their own
home, 38% at work, 34% at some-one else's home and 24% at an educational
institution. In looking at the differences between income groups
the ONS divided the population into ten income bands; from the
fifth group onwards the levels of access increased rapidly with
income, up to 62% for households with the highest level of incomes;
for the lower levels, the proportion with access was in all cases
less than 10 per cent.
54. The digital divide is of course one facet of
a far wider problem of social exclusion. There are many millions
of people who have, through poverty, no hope of regular access
to the Internet, some of whom may lack the basic literacy skills
even if they do. Those who have the means to do so may fear that
the basic costs, of up to £1 a day, will rise with excessive
use, particularly by younger family members, and if forced to
choose between the internet and pay TV will opt for the entertainment
of the latter. The record of companies claiming to be able to
provide ultra-low cost access has inspired understandable cynicism.
There are said to be upwards of 4 million people without bank
accounts, and a greater number without credit cards, who are effectively
ruled out of the e-commerce net. The universal banking proposals
now well advanced will not go as far as provision of credit cards.
1 in 12 households do not even have telephone lines.
55. This is the context in which we have to judge
the Government's initiatives, apparently designed to address the
availability of the hardware for poorer households, access
to infrastructure where there is no commercial case for it,
spreading (not only among the young) the knowledge and confidence
necessary to make use of electronic communications, and seeking
to ensure that there is content of some relevance to such
users. Some programmes seem to be designed to make a real difference.
Others are evidently a drop in the ocean; they are either pilots
which seek to prove that further expenditure is justified, or
56. In the March 1999 Budget, the Chancellor announced
the Computers Within Reach Initiative, allocating £15
million to provide low cost recycled PCs for 100,000 low-income
families. Following eighteen months of discussions with computer
hardware and software suppliers, contracts were signed with seven
suppliers in October 2000. The Minister attributed the delay between
the announcement and final establishment of the scheme to difficulties
in finding partners in the private and voluntary sectors willing
and able to run the project. 
On 25 October 2000 Michael Wills, the Minister for Learning and
Technology, launched the scheme in several pilot areas. The Government
aims to allocate 35,000 computers to the pilot areas by 31 March
2001, with an evaluation of the scheme by the end of 2001. Each
recipient has to pay £60 for a computer. Ms Hewitt told us
that the £60 charge for a computer under the scheme will
be one of the issues evaluated by the department.
Two years after the announcement that 100,000 low income families
would be receiving and paying for recycled computers, it seems
that only a third of that number have received them, within the
last few months.
57. The Wired up Communities initiative is
investing £10 million from the Capital Modernisation Fund
to pilot the idea of connecting homes in disadvantaged communities
to the internet. On 11 October 2000, the first pilot to the Wired
Up Communities Pilot Scheme was announced. The £500,000 project
intends to wire up 2,000 homes in Kensington, in Liverpool. The
residents receive recycled computers under the Computers Within
Reach scheme, without having to pay the £60 charge. On 16
March 2001, the Minister for Learning and Technology, announced
the second phase of six further local pilots in four urban areas
in east London, east Manchester, Blackburn, and south Yorkshire
and two rural areas Framlingham, Suffolk and Alston,
Cumbria. Phase 2 of the scheme is to be operational by June/July
2001. If the Wired Up Communities programme is to prove of
any value it can only be if the level of expenditure and effort
needed to produce worthwhile results stands any chance of being
replicated on a national scale.
58. On 11 September 2000 the Prime Minister announced
the Government's commitment to the establishment of 600 UK
online centres to be funded by the Capital Modernisation Fund
and to provide community-based internet access and training in
ICT skills. The September 2000 report provided a deadline for
the establishment of these 600 centres of March 2001, and the
target of the end of 2002 for the establishment of over 6000 UK
online centres, including facilitating internet access for all
public libraries. The Minister explained how the Government was
trying to make internet access not only available, but also accessible
to disadvantaged communities. She cited the example of a scheme
in the West Midlands where a UK online centre has been set up
inside a caravan which accompanies a travelling fair.
A list of the proposed centres was placed in the Library following
a parliamentary question from Bob Laxton MP.
This shows a great diversity of provision. Some of the Centres
are evidently genuinely new. Others seem to be public libraries,
which are being wired up under at least one DCMS programme, the
People's Network, whereby 60% of libraries are to have internet
access by May 2001. Some of the "centres" sound more
virtual than real. Further phases of the introduction of these
centres are due through the first half of this year.
59. The PIU report 'Counter Revolution modernising
the Post Office Network" of June 2000 put forward the proposal
that the Post Office network should develop initiatives to help
people access and use the Internet, through Internet Learning
Access Points. We referred to this in our November 2000 Report
on the Post Office.
On 30 November 2000 a contract for pilot trials in 280 Post Offices
in Leicestershire was signed with the Post Office.
60. The Government's commitment to encourage employers
to provide PCs and Internet access for home use was helped
by the tax breaks for employees provided with home computers by
their employers. There is a parallel commitment to encourage low-cost
PC leasing schemes for public sector employees, possibly reflecting
the take-up by teachers of similar schemes to provide teachers
with PCs for use at home. Information on existing leasing schemes
for public sector employees has been collated and a summary of
best practice and of existing leasing schemes was to have been
circulated in mid-March. There is to be an evaluation made in
the summer of 2001. The DTI do not apparently offer this scheme
to their employees, but Ms Hewitt informed us that they were currently
developing a purchase scheme for employees which will provide
them with 'very favourable terms', and that other Departments
have shown an interest in developing similar schemes.
61. The development of local content is one
of the specific commitments under the September 2000 document,
following the finding of a recent survey that half of the respondents
who were "unconnected" said that the internet was not
relevant to their lives. "The PAT 15 report also cited the
lack of perceived relevance of commercial online content as a
major stumbling block to the success of community ICT learning
centres". "Strong plans" for developing local content
were supposed to be emphasised when assessing bids to run UK online
centres. The Minister was not able to give very much indication
of what such content involved.
The regular progress reports refer to a "community content
62. These initiatives and centres and development
programmes do not amount to a strategy to overcome the digital
divide between old and young, rich and poor, urban and rural.
In the context of the scale of the digital divide, they look like
woefully inadequate gestures. Millions of people are excluded,
not the thousands reached so far by these initiatives. We hope
that the e-Envoy will be given time to look up from the world
of e-Whitehall and take a holistic view of the divide. His first
priority must be to bridge that gap with a rounded strategy, based
on the experience gained of the rather disparate initiatives of
the past few years. We look forward to its presentation in the
next Annual Report.
Education and skills
63. There are a number of targets and initiatives
intended to ensure that children and young people obtain the IT
skills necessary to be able to benefit from the new electronic
world, both for business and pleasure
- the Government is committed to investing £700
million in order to improve the ICT infrastructure in schools,
further and higher education. All schools are to be connected
to the internet by 2002 under the National Grid for Learning programme
in England; by the end of 2000, 98% of secondary schools and 86%
of primary schools were connected. Computer to pupil ratios in
schools have risen since 1998 from 17.6 : 1 to 12.6 : 1 in primary
schools and from 8.7 : 1 to 7.9 : 1 in secondary schools.
- 32 City Learning Centres have been established,
primarily for pupils and teachers, but also as centres for lifelong
learning. A list of these is in the Library.
- by 2004, 75% of 14 year olds will have achieved
a high standard of basic IT skills, rising to 85% by 2007. There
is to be an ICT work placement scheme for students over 16; a
pilot scheme for 150 electronic engineering students is underway.
- £230 million has been committed to improving
ICT skills levels among educators. 28,000 teachers have been helped
with the purchase of computers and over 140,000 teachers have
registered for ICT training . A further phase of the Computers
for Teachers programme is to be "rolled out" in 2001.
- A scheme for free ICT 'taster' courses to the
unemployed through the UK online employability training programme
was launched in May 2000. 50,000 places were made available at
over 700 training venues in England. Around 20,000 people have
begun courses. The progress reports state that the evaluation
of the scheme indicated that it is 'popular due to its flexible
attendance arrangements and its inclusion to a wider range of
- 80% discounts are offered for computer literacy
training for those with Individual Learning Accounts.
64. There are also a number of initiatives directed
at making more and better educational, cultural and training material
available over the Internet, and at advising parents how best
to support their children's education through the Internet.
- Culture Online was launched on 28 September 2000,
aiming to provide for free access to information on the arts and
cultural heritage via the Internet. The Secretary of State stated
that "The implications for schools are enormous, its potential
for lifelong learning enormous."
In oral evidence the Minister conceded that the project had been
slow in getting off the ground, in part because of the need for
legislation. The showcase website is now due in December 2001,
and the first phase content should appear online from 2002.
- there are pilot schemes for teaching whole courses
through ICT materials, in KS (Key Stage) 3 maths, and (surprisingly)
Japanese and Latin, for which contracts have been awarded. Pilots
are under way in 60 schools.
- a prospectus challenging educational content
developers to work in partnership with others has been published
and submissions received; a seminar in November 2000 brought together
the games industry with education software producers, suggesting
that the fact that the main attraction of the internet to young
people and some older people is the availability of games can
be a strength.
- the Learndirect scheme funded by the University
for Industry was set up across England, Wales and Northern Ireland
on 25th October 2000. Over 880 centres were open at the end of
2000, offering over 500 Learndirect courses. The Learndirect helpline
has had over 2.3 million callers. A searchable database of UK
learning opportunities was made available at the end of 2000.
65. The speed of change in information technology
is a cause of concern for schools and further and higher education
centres investing in ICT equipment and programmes. In response
to this, the Minister explained that as schools connect to the
National Grid for Learning at higher band-widths, they will be
able to receive software from the network, instead of loading
it into the computers themselves. This will allow schools to buy
newer software without having to update all of their computers.
£37 million was allocated during the current financial year
to eight Regional Broadband Consortia covering 86 LEAs, and £42
million is to be allocated in the next financial year to cover
all LEAs. The intention is that 20% of schools will have broadband
access by 2002. The modest announcement in February 2001 on expenditure
on broadband generally (see para 21 above) should assist education
66. There is an impressive array of educational
initiatives and efforts designed to get on top of the ICT training
agenda. There remains a massive task. Some of the initiatives
would repay closer study than we have given them, perhaps by other
departmental select committees; being able to teach Japanese by
ICT, for example, may be useful, but cannot be at the centre of
the nation's educational requirements. We suspect that it is proving
harder to reach older people. It would be useful to have some
idea of measurable output in the next Annual Report, and to have
a European perspective on the UK level of achievement, at all
stages of lifelong learning.
67. We devoted considerable attention to the issue
of consumer protection in our July 1999 Report. While transactions
making use of a computer are in some respects no different from
mail-order or telephone transactions, we noted a greater perceived
risk of fraud, an absence of a physical site to which to bring
complaints or seek help, and an increased likelihood of cross-border
transactions. We recommended that the pending EU legislation should
involve no reduction in the level of protection currently offered
to UK consumers, and warned that electronic commerce might be
deterred by " uncertainties as to what protection exists
for consumers when things go wrong."
We have also had the opportunity to raise the issue with the European
Commissioner responsible in February 2000, and again this year
with his officials.
68. There has been much activity on these matters
since we reported. Issues of the place of jurisdiction for public
and private law issues have either been resolved to the UK's satisfaction
or should be shortly, including the extension outside the EU of
the country of origin principle. Alternative Dispute Resolution
(ADR) mechanisms are starting up. The TrustUK regulatory scheme
which validates codes of practice requires e-commerce codes of
practice to provide access to an ADR scheme.
Trust UK was reported in the progress report to have approved
3 codes to date, and to be considering further applications, including
the German Trusted Shops Code. The aim is to have six codes approved
by March 2001. The European Extra Judicial Network (EEJ-Net) intended
to help consumers access ADR schemes in other member states was
launched in May 2000. The UK has now reached an agreement in principle
with NACAB that it will form its national clearing-house. We understand
that one or two EU states have now named their clearing houses.
The target is to have the full scheme running by June 2001.
69. Consumer confidence in e-commerce and awareness
of consumer rights remains low. This was shown for example
in an August 2000 report from the National Consumers Council.
The recent BRTF report called for the DTI to provide consumers
with clear and accurate information on their rights as consumers
in electronic commerce. We note from the March 2001 progress report
that a DTI strategy paper was circulated in November 2000 and
that there was a Whitehall meeting on 7 March 2001. We would
welcome the deployment of the resources of DTI's consumer division,
led by the responsible Minister, to publicise the efforts being
made to make the electronic marketplace at least as safe a place
to buy as the real marketplace, and to consider what more needs
to be done.
Advice to business
70. The Minister stated in oral evidence that she
believes that the Government has a 'very important role' in drawing
small businesses into electronic commerce and electronic communications.
There are some useful and some less useful things that Government
can do to help businesses and in particular small businesses with
- advice: there has
been an Information Society Initiative in place for several
years as a means of providing jargon-free advice on best practice,
but it is admitted to have "relatively low awareness".
The network of 100 centres is one of the best kept secrets. The
Government plans now to put more money into the relaunched service,
badged as UK online for business, launched in September 2000 and
including a web-enabled call centre advice service with "virtual
experts".The Government aims to increase the number of advisors
by the month, and to develop a diagnostic toolkit. Its plans to
promote best practice on information security, through BS 7799,
and for facilitating transfer of e-business expertise between
businesses and sectors are both several months behind schedule;
- cost and maintenance of equipment;
the three year tax break announced in the 2000 Budget for small
businesses with fewer than 50 employees, providing an entitlement
to a 100% first year capital allowances for investment in ICT,
was widely seen as very helpful.
The Minister also told us that the development of application
service providers is going to be 'very important' to SMEs as a
means of providing help and advice on a monthly subscription basis;
- sectoral studies;
over 20 sectoral studies have been started and 13 have been completed
and published; the Minister explained that the central conclusion
drawn from the studies was that the DTI needs to 'integrate e-business
with our other supply chain initiatives.'
A best practice guide has been produced. The February 2001 White
Paper Opportunity for All announced an extra £30 million
for helping businesses transform themselves through the effective
use of IT and an Internet mentoring initiative directed at companies
seeking to make the internet their primary means of doing business.
71. We know of no basis for believing that SMEs in
particular have expressed a desire for the sort of services offered.
There is no shortage of consultants able and willing to sell their
services, especially if the Government helps their customers with
the expenses. Some consultants may have the track record in business
success with IT to justify the fees they charge. There are magazines
full of advice on effective use of IT. Conferences abound. There
is in our view a role here for the Chief Executive of the Small
Business Service to examine these support programmes anew and
satisfy himself and those who advise him on the Small Business
Council that this is the best use of the use of the business support
72. We noted in our July 1999 Report that there had
been speculation that the growth of electronic commerce would
be detrimental to some sectors of the economy, such as commercial
intermediaries who might be by-passed. We recommended research
into the implications for UK employment of the growth of electronic
commerce. The September
1999 PIU Report called for evaluation of the net impact of electronic
commerce on macro-economic performance.
The September 2000 Annual Report refers to work on a joint paper
on the net economic impact of e-commerce, which has become commitment
25.1. The progress reports record that a paper on the new economy
was to be produced by the end of December 2000, and the first
Government economic impact study to be undertaken in 2002 or earlier
if data becomes available. The paper has now apparently been delayed
to Autumn 2001. The delay is not in itself a major problem, unless
it indicates any lack of urgency in mapping the effects on the
economy of electronic commerce. In the absence of an authoritative
study, undertaken by those without a vested interest in boosting
electronic commerce, strategies designed to increase the volume
of electronic commerce run the risk of being counter-productive.
We look forward to the early production of an evaluation of the
net economic effect of e-commerce.
50 HC 648, part III Back
835, page viii Back
Q 72 Back
Q 73 Back
Q 64 Back
HC Deb, 16 November 2000, col 756w Back
HC 724 of session 1999-2000 Back
Qq 69-71 Back
Qq 66-7 and Ev, p 24 Back
HC Deb, 16 November 2000, col 755w Back
Department of Culture, Media and Sport Press Release, 28 September
Q 83 Back
Q 79 Back
HC 648, paras 115-124 Back
See HC Deb 8 December 2000 cols 322-28. Back
Q 56 Back
Q 95 Back
UK Online Back
Q 96 Back
Q 98 Back
Cm 5052, 4.62-70 Back
HC 648, para 76 Back
HC 835, page viii Back