Report says government will have to wait until 2012 to recoup
investment.
Research released last week from analyst firm Kable predicted that
the cost of e-government could outweigh any savings to the public
sector over the next 10 years.
Between 2001/2002 and 2005/ 2006, e-government projects will cost
UK taxpayers a massive £7.4bn (£3bn for local government and £4.4bn
for central government). The savings from this figure amount to 11%
(£820m), which will come largely from introducing e-procurement,
customer relationship management and re-engineering service
delivery.
The report also predicted that the government will have to wait
until 2012 before it recoups the investment in electronic
services.
But while the cost savings forecast in the report prompted
questions about the real value of e-government, there was little
surprise in public sector IT circles.
One public sector IT manager, attending the Government Computing
Conference 2003 in London last week, said, "I am not surprised it
will take 10 years. People expect financial benefits to come in one
or two years but it does not work that way." He said that because
of the complexity of building the systems, expectations could not
be any higher.
The report also sparked a debate about the expectations riding on
e-government, which range from financial returns to improved
service delivery.
Industry experts said a return on investment of 11% was a
respectable figure for either private or public sector IT
projects.
"If the research figure of 11% is correct, then that is a real
pay-back. Any company would be happy with a rate of return like
that," said Iain Roxburgh of the New Local Government Network think
tank.
Few would dispute that e-government has the potential to offer more
effective services to the public. For example, online payment of
bills and taxes removes much of the time-consuming bureaucracy that
often characterises dealing with the government. The internet can
also provide the public with up-to-the-minute information on
everything from local waste disposal services to applying for a
provisional driving licence.
Although not necessarily delivering cost savings to taxpayers,
experts have highlighted the importance of e-government when it
comes to improving public services. Val Shawcross, e-envoy at the
Greater London Authority, said, "For most public services, the
demand is greater than the supply, so if you are able to deliver
services more efficiently you are able to serve more people.
"This does not produce cash savings but it does deliver more and
better public services."
Shawcross also pointed to the NHS Direct information service as a
good example of this approach.
Launched in 1998, NHS Direct enables members of the public to
obtain health advice via the telephone and the internet. Crucially,
the scheme was not introduced with the objective of reducing costs
for the NHS, but to provide better health advice to the public.
Last year a report from the National Audit Office praised the
project, and said there was evidence it helps to reduce the demand
on local healthcare services provided outside normal working hours.
Auditors also found that NHS Direct recommended more appropriate
forms of care to callers during the day.
NHS Direct is a good example of the public face of the UK's
e-agenda, but e-government also offers councils and government
departments the opportunity to link their internal systems and
business processes. For Roxburgh, this represents the perfect
opportunity to overhaul existing business processes. He said, "The
findings of the Kable report came as no surprise. Money must be
invested in radical business process re-engineering, not just
grafting e-government IT onto existing processes."
Roxburgh feels that e-government must be geared towards people's
needs. "The principal purpose of e-government is to improve
customer service and the responsiveness of public services to
individual customer needs," he said.
Ultimately, it seems that there is a changing perception of
e-government in the UK public sector.
With councils and government departments racing to meet Tony
Blair's 2005 target for getting services online, many will be
becoming aware that it could be many years before they receive a
return on investment, if at all. Instead, the focus is on improving
access to public services and making them more efficient.
For Northern Ireland e-envoy Des Vincent, who also attended the
government computing conference, e-government is about much more
than pound signs. He said, "This is not about delivering savings,
it is about changing the relationship between the government and
the governed. The civil service should serve the citizen, but this
will come at a cost."