Despite Prime Minister Tony Blair's pledge to get 100% of services online by 2005, Whitehall lacks the basic metrics to show that it is getting best value, according to an NAO report, Government on the Web11, published today.
There has been a proliferation of public sector Web sites but there is no central collection of data on Web site usage, even though this "would provide valuable information about what works - and what doesn't work", the NAO said.
The report praised the work of the e-Envoy's department, but said it had to change the way it operates fundamentally.
"The Office of the e-Envoy has given a clear cultural lead from the centre to departments developing e-business initiatives," the report stated.
"To maximise the potential benefits from these resources [244 staff and £52m annual expenditure], the Office needs to move beyond campaigning for e-government towards a service delivery style with emphasis on implementation."
This should include a review its target regime to include specific requirements for departments and agencies to increase their Web site usage and take-up of electronic services.
The e-Envoy should also create a database to identify the value added by e-government projects, said the NAO.
Sir John Bourn, head of the NAO said: "A significant amount of taxpayers' money is being spent in central and local government in introducing Internet-based services.
"I have found considerable progress since my previous report in 1999 but weaknesses exist in information across government on the usage of its Web sites, performance indicators to measure progress and methodologies to assess the value added by e-government provision."
Bourn called for government to place boosting the take-up of electronic services at the heart of the e-government agenda.
Downing Street will claim it has already acted on this challenge. In this month's Budget the chancellor highlighted incentives to move companies towards e-filing of payroll taxes.
However, the small print of the Budget showed how slow this process would be with Gordon Brown proposing a three-stage move to electronic filing, which would only become mandatory in 2010.