A competitive step too far for government?

Successful e-government services may compete with the private sector. Should they be allowed to? David Bicknell reports

Successful e-government services may compete with the private sector. Should they be allowed to? David Bicknell reports

The UK Government is under pressure to establish greater credibility for its ambitions to provide electronic service delivery of services to citizens.

A report published last month by the Cabinet Office's Performance and Innovation Unit (PIU) suggested that a robust strategy was needed to achieve the goal of getting all government services online by the year 2005.

That included, among other things, giving electronic service delivery a Cabinet focus, and setting up a government incubator to develop new ideas.

But for the US, the problem is an opposite one: how to stop Uncle Sam competing with the private sector, because some government services are in danger of doing just that.

According to a report produced by the US Computer and Communications Industry Association (CCIA), "The Role of Government in a Digital Age", a comprehensive review is needed of government activities on the Internet.

Ed Black, president and chief executive of the CCIA, suggested that some US government initiatives have already gone beyond boosting efficiency and improving service quality.

According to the CCIA (www.ccianet.org) report, by a Stanford University academic and two advisers to Washington officials, at least one US agency, the US Postal Service (USPS) is already ready to compete directly with private industry.

It follows a report by the General Accounting Office, a government watchdog, that predicted that the advent of online bill payment services was likely to cost the USPS around $16bn a year, as billing statements currently represent 25% of USPS revenue.

To counter this, in April, the USPS launched its own "eBillPay" service.

That raised the CCIA report's authors' eyebrows, which claimed that even though the government contends that the market is big enough for both the USPS and private companies, the USPS might have enough power to dominate the sector.

The CCIA report suggests that the entry of the USPS into the online bill payment market would "create a tidal wave more than sufficient to swamp fledgling businesses without the vast resources and established brand equity of the postal behemoth."

In contrast to the USPS, the CCIA concluded that a 'Job Bank' organised by the US Department of Labour, with nearly l.5m position listings and 2.5m job seekers, was not in competition with private sector sites.

To back up its thoughts, the report creates a series of "principles" for deciding which online and information activities the government should engage in, and which it should avoid. It also gave the principles a marker as to whether they should be undertaken or not.

Green light activities such as providing public data, improving the efficiency with which government services are provided, and supporting basic research, can be undertaken with little concern; yellow light principles, such as adding specialised value to public data, and providing private goods only if private sector firms are not providing them, should be approached with caution.

Red light activities, which the government should not generally undertake, include offering services where private sector firms are active, and where taking actions would reduce competition.

The difficulty for government agencies, such as the US Postal Service seems to be that they are damned if they try and compete and become more efficient, and damned if they don't.

It is a problem that the UK Government, unfortunately, has yet to have to tackle.

If, one day, government services are so efficient that they risk competing with the private sector, then e-government really will have arrived.

This was last published in December 2000

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