Select Committee on Public Accounts Fifty-Fourth Report


The Committee of Public Accounts has agreed to the following Report:



1. Government departments currently have underway 100 major IT projects with a total value of £10 billion. This expenditure is part of the Government's strategy to make the full range of services which departments and their agencies provide for citizens and businesses accessible electronically. To achieve this the Government has set the target that 100 percent of services should be available on-line by 31 December 2005. Harnessing new technology is also intended to enable departments to improve their operational efficiency by replacing labour intensive processes with electronic systems.

2. Achieving such a change in the way in which departments deliver services involves risks which need to be carefully managed. Previous reports[1] by this Committee have stressed the need for departments to improve the management of their IT projects which have often experienced significant implementation problems with an adverse impact on the quality of services for citizens. There is also the risk, however, that departments provide services on-line but the public do not use them because they see no benefit in doing so. Should this happen the significant investment in e-government would be wasted.

3. On the basis of a Report[2] by the Comptroller and Auditor General, we examined progress which the Office of the e-Envoy as part of the Cabinet Office and the Office of Government Commerce have achieved in encouraging departments to make services available electronically. We underline four main points:

  • The public are unlikely to want to use the services which departments provide electronically unless they see real benefit from doing so. The potential to use IT to improve public services by delivering them in new ways often more quickly, and more accessible and more convenient to use has, however, largely yet to be realised. For example, very few of the services which most citizens routinely use can be fully accessed on-line such as applying for a driving licence, which is processed electronically and then received in the post. Departments need to concentrate their efforts on identifying and making fully available on-line those services which citizens are most likely to find useful.

  • Information technology provides opportunities to deliver public services in new ways. For example, the Lord Chancellor's Department are piloting a programme which should enable solicitors to issue and serve petitions for less serious cases via e-mail and initial results have suggested that the average time taken to provide judgement on a civil case can be reduced from 21 to five days. Achieving such improvements requires, however, that departments do not simply convert existing ways of delivering services to electronic applications but consider how IT can be used to enhance and improve services.

  • Groups in society such as the elderly, unemployed, those on low income and those with learning difficulties may not have easy access to the Internet with the risk that they are excluded from the benefits of e-government. To prevent this from happening departments are making their on-line services available in a range of locations such as libraries and community based centres and intermediary organisations such as Citizens Advice Bureaux, banks and Post Offices. To ensure, however, that this approach is effective in tacking the risk of unequal access to the Internet and its benefits, departments need to obtain reliable information through market research on the extent of take up of e-services by such potentially vulnerable groups as the elderly and those on low incomes.

  • Departments frequently justify their significant investment in IT projects by the potential to improve their operational efficiency and release resources to redeploy to front line service delivery. For example, NHS Direct by providing health advice on-line should release doctors' and nurses' time to treat more serious cases. Departments have very little information however on the extent to which such improvements are being achieved. Departments need to establish reliable baselines against which they should assess and report whether their investment in new technology is achieving the expected benefits.

4. Our more specific conclusions and recommendations are as follows:

On delivering services on-line which the public want to use

  (i)  Departments predict that they will achieve the Government's target that 100 per cent of services should be available on-line by the end of 2005. There is a risk, however, that services will be delivered electronically but not used by citizens. To focus their efforts on encouraging citizens to access services, on-line departments should also develop realistic take-up strategies for on-line services supported by action plans to achieve them.

  (ii)  Those who use public services have different needs and preferences. The elderly, for example, have a range of requirements depending on their income, health and where they live. People are only likely to be prepared to access services on-line if they are delivered in a way that best meets their needs. There is, however, considerable variation in the quality of departments' information on their key users making it difficult to design services which reflect their preferences. Departments need to obtain more comprehensive information on their client groups so as to design electronic services which they are likely to find attractive and want to use.

  (iii)  Some people remain suspicious of IT either because they are unfamiliar with it or have concerns about how departments might use information which they provide electronically. To overcome these concerns and ensure that people are aware of the benefits from accessing services on-line, departments need to communicate with the public so that they know what is available and have realistic expectations. To achieve this departments need marketing strategies which are clearly targeted at the key users of their services.

On ensuring that departments have the technology to deliver e-government

  (iv)  Gateway reviews are an important tool for improving the performance of IT projects and have identified a number of deficiencies common to many IT projects. These include the need for better business cases underpinning departments' investment in IT and stronger project management. Departments should work with the Office of Government Commerce to ensure that these weaknesses are remedied.

  (v)  Some companies are reluctant to compete for government IT projects with the risk that departments become too reliant on one or a few suppliers. The Office of Government Commerce considers that one reason for this is a perception that contracts were awarded solely on the basis of lowest price. We have emphasised before that we expect departments to award contracts on the basis of achieving long term value for money and look beyond the lowest price.[3]

  (vi)  Small and medium sized businesses are often a good source of innovation but it can be difficult for such firms to compete for departments' IT contracts. Where it is practical to do so departments should consider disaggregating work into small units which smaller companies are more likely to have the capacity to undertake.

On improving departments' operational efficiency

  (vii)  To achieve the significant improvements in operational efficiency which e-government should make possible and so release resources to deploy to front line service delivery, departments need to set clear efficiency improvements targets at the outset of an IT project. When improvements are less than expected departments should establish the reasons why and take the necessary remedial action.


5. Electronic or e-government is about providing public access via the Internet to information about all the services offered by central government departments and their agencies; and enabling the public to carry out transactions for all those services, for example paying tax, claiming and receiving benefits and getting a passport. The Government's target for the implementation of e-government is that 100 percent of services should be available on-line by 2005. Departments are responsible for meeting the target and for securing the benefits of improved public services in terms of being able to access and receive services more quickly and at times more convenient to people. The Office of the e-Envoy is responsible for formulating common policies and guidelines to underpin and monitor departments' implementation of e-government.[4]

6. The Comptroller and Auditor General found that just over half of services (247) which departments routinely provide to citizens and businesses were available on-line in November 2001 and that departments considered that nearly all services would be on-line by 31 December 2005. There is a risk, however, that departments meet the Government's e-target but very few people are willing to access public services electronically because they see no value in doing so. We asked, therefore, whether the e-target also covered ensuring that there was sufficient take up by the public of services on-line. The Office of the e-Envoy told us that the target covered only making services available on-line and not usage by citizens. The Office said, however, that departments had to be sensitive to their customers and make sure that their electronic services were sufficiently attractive that people wanted to use them.[5]

Capacity for the public to interact with departments on-line

7. Most of departments' services currently on-line provide basic information and advice (Figure 1) for the general public such as how to apply for a passport. Apart from revenue collection transactions such as self assessment tax returns and VAT there is little opportunity for citizens and businesses to carry out transactions with departments electronically such as applying for a driving licence or claiming benefits.[6]

Figure 1: Most of the services which departments currently make available on-line provide mainly information and advice, for example:


provision of information to motorists on issues such as learning to drive


RAF website provides information on low flying exercises


provision of on-line services for teachers for example on advice on setting up after school learning activities and clubs


obtaining application form for visas


the Small Business Service (SBS) Website and call centre 0845 600 0096 provide access to information and advice for Small/Medium Enterprise available from the DTI and other organisations


a self analysis kit for firms to find out how likely they are to be affected by the phasing out of national currencies in the Euro area on


information about healthcare via a telephone service—NHS Direct


advertising job vacancies from the Employment Services


cattle tracing system enabling reporting and tracing of cattle movements on-line—


information available on-line about Lottery distribution bodies

8. Asked why so few of the services which are offered electronically by departments allow the public to carry out basic transactions the Office of the e-Envoy said that the latter were much more difficult to put on-line than simple information services. Asked whether it would be possible to apply for and receive a passport electronically by 2005, the Office said that at present it was possible to fill in the application form for a passport on-line but that was only part of the process. To make the service attractive to customers so that they were encouraged to use it the whole process would need to be capable of being carried out electronically. Many services such as applying for passports and benefits required authenticating documents and photographs to prove a person's identity. While it was possible with current technology getting documents scanned and sent electronically might not be practical to achieve for all relevant services by 2005.[7]

Security of information

9. An important requirement of e-government is ensuring that information transmitted on the Internet and departments internal intranets[8] is secure. People are unlikely to provide personal information to departments on-line if they cannot be confident that it will be read only by those authorised to do so. The Cabinet Office said it was developing policies on ensuring the security of transactions, respecting privacy and maintaining security where services are delivered electronically through third parties. The Comptroller and Auditor General found, however, that some smaller departments were concerned about the cost and practicality of obtaining the necessary accreditation covering document security and transfer which is required before they can connect to the Government Secure Intranet.[9] The Office of the e-Envoy accepted that the accreditation process carried out by an organisation called the Communications-Electronics Security Group (CESG), which is an offshoot of Government Communications Headquarters (GCHQ), was expensive. The Office was working with CESG to make it quicker and cheaper for small departments and local authorities to connect to the Government Secure Intranet.[10]

How e-government in the UK compares with other countries

10. The Comptroller and Auditor General's examination found that an independent international survey of 22 countries indicated that the UK's e-government capability was not as advanced as Canada, Singapore and the United States. We looked at the US and Canadian Government websites and found it was possible to apply for Canadian and US Government benefits on-line and also for student loans. On the UK Government website ( the services which could be carried out electronically appeared more limited (Figure 2). The Office of the e-Envoy said that international comparisons could be subjective and in many respect the US Government considered they were catching up with the UK in delivering public services on-line. The Office of National Statistics was carrying out some international benchmarking to determine how e-government in the UK compared with other industrial countries. Regarding the services listed as available on the site, the Office said that these were to give only some examples of the sorts of things that people could do on-line. There were many more such as paying for the theory driving test and claiming to recover debts.[11]

Encouraging citizens to use electronic services

11. Accessing information about public services on-line and carrying out a range of transactions electronically are still relatively new. Some people remain suspicious of IT because they are unfamiliar with it, while others may be simply uninterested or not know about the services that are available electronically. In the private sector, companies seeking to encourage people to buy their goods or services normally first determine the preferences of their potential customers and what is likely to attract them to the service; and secondly market the service so that customers are aware of it and see advantages in using it.[12]

12. The Comptroller and Auditor General found that there was considerable variation in the completeness and quality of information which departments had on the characteristics and preferences of their key users and client groups. Without such information it is difficult to see how departments can design services which people are likely to find attractive and want to use. In addition few departments had action plans for marketing the benefits of e-government to the public. The Office of the e-Envoy said that it was working with departments to design electronic services which were more customer focused and more likely to encourage people to want to access services on line. While advertising campaigns had been commissioned to encourage the general public to access government services electronically the Office accepted that departments had generally not recognised the need to market the benefits of e-government to potential users. This was something which the Office of the e-Envoy said it was encouraging departments to do.[13]

13. In order to make it easier for the public to find the electronic service they want quickly, the Cabinet Office has developed the UK on-line Portal, which provides a single access point to all departments' on-line information and services organised around key events in a person's life such as moving home. We asked what the average use of this site was and how this was measured. The Cabinet Office said that the UK on-line Portal was accessed on average about one million times a week. But counting the number of people coming to the site was difficult because many gained access through one of the major Internet service providers which did not separately identify individual users.[14]

Figure 2: Examples of services referred to on the UK on-line Government website which can be carried out electronically

Apply for passport

Complete a passport application online. Your completed form will be posted to you for you to sign.

Buy a TV licence

Buy your TV licence online with a debit or credit card.

Find local childcare

Get advice on choosing suitable childcare or search for childcare in your local area.

Nominate someone for an honour

This Cabinet Office website explains UK honours and bravery awards and lets you download a nomination form.

Tradesmen quality mark

Choose a tradesman from eighteen trades to work on your home.

Book a driving theory test

Book a theory test online with the Driving Standards Agency. You'll need the candidate's provisional driving licence number and your valid credit or debit card.

Change of address

Three organisations now offer services to help you tell companies and government of your new address. These services are free of charge.

Find out what's on where in the UK

Official UK events guide.

Make claims to recover debts

Consumers and businesses can make claims online to recover money owed to them.

Get a fishing licence

Purchase your rod licence.


14. When the Public Record Office put on-line the results of the 1901 census, which became available to the public for the first time in 2001, the website was unable to cope with the large number of people seeking to access the data. We asked, therefore, how the risk of departments' systems not being able to cope with demand was managed. The Office of the e-Envoy said that the UK on-line Portal had the capacity to cope with about ten times its current average daily use. More generally the Office told us that Gateway Reviews[15] introduced by the Office of Government Commerce would routinely consider whether sufficient capacity and contingency was being built into IT projects.[16]

Avoiding people being excluded from the benefits of e-government

15. Some groups in society could be disadvantaged because they lack the education (some 20 per cent of the population have some literacy problem) or confidence to use new technology or cannot access services because of different physical or language abilities. Only 7 per cent of those in the lowest income group of the population currently have home Internet access compared to 71 per cent of those in the highest income group. There is a risk therefore that groups of people may be potentially excluded from the benefits of e-government. We asked what was being done to prevent this from happening.[17]

16. The Office of the e-Envoy said that it was working with departments to ensure that people could access the Internet in a number of public places, and by the end of the year all libraries and large numbers of community based centres were intended to be on-line providing free access to the Internet. 98 per cent of the population would then be within a few miles of free public access to the Internet. In order to overcome people's reluctance or fear of using the Internet the Office was working with the Department for Education and Skills as part of its adult education programme. Organisations such as Citizens Advice Bureaux were also being used as intermediary organisations through which groups which might be excluded, such as those on low income, could have access to on-line public services.[18]


17. In order to deliver services on-line departments need the necessary information technology and infrastructure. Central civil government departments have under way around 100 major IT projects in their initial stages of procurement with a total value of £10 billion. Departments' IT projects have, however, in the past experienced significant technological and managerial problems which have either delayed their implementation, increased their costs or resulted in their failure. The Committee of Public Accounts Report Improving the delivery of IT projects' published in January 2000 highlighted eight key lessons which departments needed to apply to improve project performance.

18. In February 2001 the Office of Government Commerce introduced gateway reviews which are required for all new procurement projects including IT. The aim of gateway reviews is to provide assurance that a project can progress safely to the next stage of its development or implementation. Gateway reviews have been carried out on over 100 major IT projects. The Comptroller and Auditor General found that 76 per cent (35) of the projects reviewed up to June 2001 had three or more aspects requiring improvement and the common areas identified as needing improvement were similar to those highlighted our January 2000 report. In particular, gateway reviews have identified the need for better business cases underpinning departments' investment in IT projects; for more developed IT project management skills; and the need to measure the benefits achieved by IT projects.[19]

19. Asked what was being done to remedy the deficiencies identified by gateway reviews the Office of Government Commerce said that the gestation period of IT projects was fairly long. As a result, when gateway reviews were held early enough and remedial action taken, evidence from a sample of projects indicated that there was a 50 per cent improvement in their chances of success. The Office also told us that gateway reviews were important for checking that sound processes were in place together with appropriate skilled experts to deliver IT projects as planned.[20]

IT Suppliers' performance

20. Departments depend on IT companies to develop install and support IT systems. With an IT investment programme of £10 billion departments are a major source of business to the IT industry (Figure 3). As with any form of procurement however, there are risks which must be managed - in particular the risk that suppliers provide IT solutions that do not meet departments' expectations, are delivered late or over budget; that IT systems fail putting service delivery to the public at risk; or that departments become reliant on one supplier. We asked whether departments were dependent on too few suppliers.[21]

Figure 3 Departments' key suppliers of IT services 2000-01

21. The Office of Government Commerce said that there were a number of major IT companies that did not compete for departments' IT contracts and agreed that it would be beneficial for promoting value for money to have more competition. The Office told us that there were a number of reasons why more firms did not bid for IT contracts. The first was a perception that departments awarded contracts solely on the basis of lowest price; second, that companies were concerned at the protracted length of time it took departments to award contracts and the cost which suppliers had to incur in bidding; and third that companies were concerned for their reputation in getting involved with high profile public sector projects which subsequently failed.[22]

22. To tackle these issues the Office of Government Commerce said that it had issued guidance and provided training to reinforce the importance of awarding contracts on the basis of the potential to deliver value for money and not lowest price alone. The Office also told us that it was working with departments to shorten the decision making process for awarding contracts which should also reduce the cost of bidding for companies. On the issue of reputation, the Office said that as long as a company performed well there would be no damage to its reputation. There were also obvious advantages in doing business with departments as contractors could be more certain that their invoices would be paid on time.[23]

Encouraging small and medium sized businesses to compete

23. The skills and innovation found in small and medium sized businesses are often not replicated in large firms and we asked what was being done to make it easier for small and medium sized businesses to compete for departments' IT contracts. The Office said that it was using framework contracts to provide small and medium sized businesses with more opportunities to compete and was producing a video with the Department of Trade and Industry's Small Business Service to promote the advantages to departments of using small suppliers. The Office told us, however, that a risk adverse culture still existed in the Civil Service which tended to reinforce a reluctance to use smaller companies. Partly to help address this the Office said that it had removed the requirement that companies needed to provide three years' audited accounts before they were considered for departments' IT projects. The Office was also encouraging departments to disaggregate work into smaller units which medium sized companies were more likely to have the capacity to undertake.[24]


24. Information technology has the potential to improve the operational efficiency of departments. Private sector experience suggests that it is not unrealistic to expect efficiency savings of up to 10 per cent in an organisation's total running cost from converting manual systems to IT applications. For example, if high volume routine services such as vetting claims can be undertaken electronically departments should be able to reduce staffing or redeploy staff to other priorities. Much depends, however, on sufficient numbers of the public interacting with departments on-line to the extent that manual services can be significantly reduced or no longer need to be provided. Support activities such as purchasing, tendering, maintaining personnel records and processing travel claims could also all be done electronically. The Comptroller and Auditor General found, however, that departments had not established baselines or methodologies to assess the extent to which efficiency improvements made possible by IT were being achieved.[25]

25. The Office of the e-Envoy said that it was difficult to determine precisely the likely staff savings which e-government should make possible. In many cases the benefit would be improvements in the quality of a service rather than staff reductions. For example, by providing health advice on more simple non life threatening cases, NHS Direct should make it possible to release doctors' and nurses' time for other more pressing cases, thus increasing the capacity of the whole health services to treat more patients. The Office of the e-Envoy told us that departments' specific business cases justifying expenditure on IT should set out the intended benefits, which could include improving the quality of services, releasing resources to redeploy to front line service delivery such as recruiting more nurses and teachers, and making back room support activities more efficient.[26]

26. The Treasury said that it reviewed on a case by case basis IT projects and requests for resources submitted to it and challenged departments to demonstrate the likely savings which would be achieved and the potential to redeploy staff to front line service delivery. The Treasury was however at an early stage in collecting information on the likely savings and in improvements in service delivery.[27]

1   1st Report from the Committee of Public Accounts, Improving the delivery of Government IT Projects (HC 65, Session 1999-2000)  Back

2   C&AG's Report, Better Public Services through e-Government (HC 704, Session 2001-02) Back

3   2nd Report from the Committee of Public Accounts, Improving Construction Performance (HC 337, Session 2001-02) Back

4   C&AG's Report, paras 1, 5-6  Back

5   ibid, para 1.11; Qs 6, 23, 25, 43 Back

6   C&AG's Report, para 1.12  Back

7   Qs 24-27 Back

8   An intranet is a network linking computers within an organisation which is closed to outsiders. Its structure and user interface are based on those of the Internet.  Back

9   The Government Secure Intranet is a secure web-based facility which gives government users access to departments' internal directories and intranets. It also provides a range of information services through links to other sites outside government. Back

10   C&AG's Report, para 2.12; Qs 33-34 Back

11   C&AG's Report, para 1.13; Qs 27-32  Back

12   C&AG's Report, para 2.24  Back

13   ibid, paras 2.26, 27; Qs 9, 12-15 Back

14   C&AG's Report, Figure 7; Qs 61-62 Back

15   Independent reviews of major IT projects at critical stages "gates" in their development.  Back

16   Qs, 63, 66-68 Back

17   C&AG's Report, para 1.7  Back

18   Qs 17, 105-111 Back

19   C&AG's Report, paras 2.4-2.6 Back

20   Qs10, 47-50 Back

21   C&AG's Report, para 2.14; Q86 Back

22   Qs 87-90, 131 Back

23   Qs 90-91 Back

24   Qs 131-134 Back

25   C&AG's Report, paras 7-8 Back

26   Qs 22, 115  Back

27   Q138 Back

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