Tony Blair has failed to convince councillors in almost half of the UK's local authorities of the value of e-government.
The Society of IT Management's IT Trends in Local Government 2003/2004 report revealed that in 40% of councils, elected members felt e-government either distorted local priorities, could not be cost-justified, or was not a priority.
However, with the 2005 e-government deadline looming, council chief officers and IT staff were more optimistic about the potential of electronic services.
The report, which was based on responses from more than 230 councils in England, Scotland and Wales, found that more than 40% of local government directors believed e-government could make wide-ranging improvements to service delivery.
Local authority IT managers were equally positive and foresaw an average 20% performance improvement.
However, the report highlighted a lack of performance management within councils, with only 33% of IT departments formally measuring and publishing performance information.
Socitm found that councils' IT spending was rising dramatically as they approached the deadline. Some 60% of councils planned to increase their staff numbers in preparation for the 2005 deadline.
Spending this year will reach almost £2.5bn in 2003 - a 24% increase on last year. Despite these increases, the report said, "Lack of funding was seen as the biggest risk to e-government. Managers are concerned about central government ceasing to support the programme."
Socitm members fear that councils not meeting the deadline may never be able to deliver e-enabled services if funding dries up.
Despite these fears, John Serle, the report's editor, said local government was becoming an increasingly attractive place to work.
He said, "Anybody looking for an IT job should be getting involved in local government. There are some great projects."
These involve technologies such as customer relationship management, ERP and supply chain management, he added.
Serle expects recruitment to boost councils' IT headcount by between 5% and 6% of the 14,000 IT staff working in councils in England, Scotland and Wales.
Councils' attitudes to e-government
Web services and customer relationship management are rated as the most promising technologies.
More than 50% of councils are considering open source, and almost one quarter are using it selectively. The remaining councils have evaluated and rejected it.
Knowledge about the government's standards and interoperability framework appears to be poor - on average 60% of councils have limited or no knowledge.
About 33% of councils have all their buildings linked by broadband.
Use of wireless technology appears to be at an early stage, with only about 10% of councils claiming extensive use.
Compaq/Hewlett-Packard is the largest supplier to local government, and also has the largest installed base of large servers.
Most councils are migrating to Windows XP and are reporting a decline in older versions of Windows.
Source: Socitm Annual IT Trends in Local Government Report 2003/2004