At the same time, the Government is not providing enough information on whether its online investment is actually working, according to the House of Commons Public Accounts Committee.
In two critical reports on e-services to voters, Westminster's main financial and efficiency watchdog questioned the success of moves to put Whitehall online.
In the Improving Public Services Through E-Government report, the all-party group said: "Departments frequently justify their significant investment in IT projects by the potential to improve their operational efficiency and release resources to redeploy to frontline service delivery.
"For example, NHS Direct, by providing health advice online, should release doctors' and nurses' time to treat more serious cases."
However, the PAC noted, "Departments have very little information on the extent to which such improvements are being achieved.
The committee called on government departments to establish reliable baselines against which they should assess and report whether their investment in new technology was achieving the expected benefits.''
It warned that there is a significant danger that people will not use e-government services, even if the government achieves its target of putting 100% of services on-line by 2005.
The Committee also called for the Government to break up its major IT contracts so that small and medium-sized firms could compete with outsourcing giants such as EDS, Accenture and IBM.
In a separate report on "E-Revenue", the PAC expressed concern that the Inland Revenue will meet its target of having all its services available electronically by 2005 with half of taxpayers using online systems.
In particular, it says that too few accountants and agents make use of the new technology.
To boost take-up, the all-party group says there are not enough obvious benefits for taxpayers to leave paper and go online.
It urges action to make the e-services for taxpayers more user-friendly, reliable and, above all, secure.
PAC chairman Edward Leigh said, "There are not enough clear benefits at present for taxpayers to submit their tax returns electronically rather than on paper. In addition, potential users of the Inland Revenue's e-services will not be encouraged to make the switch in the light of the well-publicised initial difficulties of using services and concerns over system security.
"The Revenue must now make progress in developing properly piloted and tested e-services which taxpayers can use easily which provide facilities to help them fill in returns and in whose security they will feel fully confident. This must be in the context of a rigorous assessment of the cost-effectiveness of the service.''