Online access to government services - from paying taxes and bills to renewing library books - has become the norm in some countries. Steve Mathieson asks why progress in the UK is so slow and looks at the implications for e-citizens

In many ways, I am the last person to be making this call to action, ' said prime minister Tony Blair, asking an audience of Cambridge technologists to fight the good economic fight in September 1999. 'I watch my children and, indeed, Cherie surfing the Net and feel a mild, sometimes not so mild, sense of humiliation. '

Many computer geeks do not like enthusiastic newbies calling them to action while not really knowing what they are doing. Ask a simple technical question in a chatroom, and There is a chance you will be told 'RTM' (read the manual). A particularly naive question may attract the charming response 'RTFM'.

This government is very enthusiastic about computers. It appointed an e-commerce minister - Patricia Hewitt, whom many expect to see in the Cabinet before too long. Mr Blair used his September 1999 speech to announce an e-envoy: a civil servant to co-ordinate government use of IT.

Chancellor Gordon Brown used his Budgets in 1999 and 2000 to throw tax-breaks to the IT industry. And ministers continually promise to make the UK 'the best place for e-commerce by 2002'.

They also pledge to make a quarter of government services available electronically by 2002, and all by 2005. That, of course, includes the NHS.

The NHS is expected to offer direct booking for hospital appointments by 2002 and to make patient records available - to patients - by 2005. However, the IT industry tends to treat this government like an enthusiastic but inexperienced web-surfer - with some justification.

Despite the warmly welcomed tax-breaks, Gordon Brown has antagonised IT on two fiscal grounds.

The first is known as IR35, a 1999 Budget measure which curtailed preferential tax rates enjoyed by some freelance workers. The second 'crime'was foot-dragging over lowering the tax on share options, a financial device used by many fledgling IT firms to reward staff. The latter issue has now been settled; the former has been taken up by Conservative leader William Hague and will doubtless get an airing in the forthcoming general election.

Away from the Treasury, the Home Office has infuriated less commercially minded Internet users by setting rules for state web-tapping that campaigners say are tighter than anywhere else in the industrialised world.

The government says its Regulation of Investigatory Powers Act simply places state spying on a legal basis: it would be illogical to allow phonetapping and post interception while leaving the Internet unbugged. The new rules allow tapping equipment to be installed at Internet service providers, as well as giving the security services the right to demand electronic keys to encrypted information. This worried doctors', nurses' and patients' groups enough for a coalition of them to warn that it could give the government access to highly sensitive health information - including details of drug users and illegal immigrants - before the bill sailed through the Commons without a vote.

To some extent, these complaints reflect the US dominance of IT. Many US technologists use the UK as their bridgehead to the rest of the world and they often bring low-tax, libertarian attitudes with them.

New Labour, with its mildly redistributive views on tax and somewhat authoritarian stance on law and order, clashes both ways. However, some of its attempts to encourage technology - cuts on capital gains tax for long-term investors, easing work permit rules and large-scale programmes to provide web access at schools, libraries and other public centres - have been welcomed by the IT industry.

The government's hopes for global superiority in e-commerce are less unrealistic than they sound.

The UK leads the major European economies in commercial use of the Internet, with only the US and the smaller Scandinavian countries (in percentage terms) ahead.

Thirty-seven per cent of British web-users shop online, higher than any other major economy.

Tesco is the world's biggest online supermarket.

One in five of us has a digital television, a potential Internet access device, compared with one in six Americans, and the world's biggest mobile phone operator, Vodafone Airtouch plc, is British.

But if the government wants to convert the whole country to e-commerce, with the efficiency gains, swift growth and friction-free transactions this can provide, it needs to swallow its own medicine.

Forrester Research, one of the more respected technology research consultancies, recently suggested the UK government could save£3. 7bn over five years through more effective use of Internet-based technology.

'Where you can integrate systems and services, the savings are phenomenal, ' says Philip Virgo, strategic adviser to the Institute for the Management of Information Systems, and a long-time government IT adviser. Unfortunately, wiring up government has not gone entirely to plan. Some teething problems, such as the resignation of the first e-envoy, Alex Allan, for personal reasons, were beyond its control.

Andrew Pinder took over in January. Mr Pinder, IT director for the Inland Revenue before working at financial firms Prudential and Citibank, is seen as competent and forceful. Given the success rate of big government IT projects, he will need to be.

The Cabinet Office says a third of government services are available online already. Many state bodies have built impressive information sites - NHS Direct is one of the best examples. However, transactional services are where the real efficiencies of e-commerce come into play. The government has only a handful - the most famous being the Inland Revenue's tax-returns service - although NHS Direct Online is dipping its toe in the water with an e-mail query service due later this year.

Such systems are hard work to get going. The cream of the private sector has had enormous problems with online banking - virtually every early provider of such services has experienced crashes and security scares.

But the lack of transactional services is also down to the way that the state procures IT.

Forrester Research's£3. 7bn figure is actually what the US researcher thinks the UK will fail to save. In a recent report, E-Government Fails The Grade, it says that the 2005 target is 'a pipe dream'. It interviewed 45 suppliers of IT, and found only 13 per cent thought the government was on target, with a further 38 per cent seeing the goal as 'technically possible'.

The other half do not expect the target to be hit. The research blamed cultural issues and procurement processes as the main problems.

But famous disasters with the central procurement of NHS IT arguably pale into insignificance alongside fiascos in other parts of government.

The Benefits Agency threw away about£400m last year, according to the National Audit Office, when it cancelled the benefit smartcard, a replacement for benefit claimant books designed to beat fraud.

At least that disaster did not hit the public. One that did was the Passport Office fiasco in summer 1999, when computer problems led to a backlog of more than half a million applications, enormous queues at passport offices, and cancelled journeys. This was sparked by Siemens Business Services, which had been contracted to computerise and run processing at the Liverpool and Newport passport offices under a£120m private finance initiative scheme.

The NAO concluded that computer problems were the initial cause. But the Passport Office had not developed effective contingency plans, and its parent ministry, the Home Office, had exacerbated matters by introducing child passports and underestimating demand, just as Siemens was introducing the new system.

Some people were surprised that Siemens - which also presided over similar computerisation-related delays at the Immigration Service - popped up as the partner to computerise MoT tests for the Vehicle Inspectorate late in 1999. They shouldn't have been surprised. The firm is one of a handful big enough to provide large-scale IT services to government departments, and unless the state reverses its preference for contracting work out to private companies, it has to go back to the same suppliers.

A big question for the NHS's new emphasis on a 'corporate' approach to IT procurement is whether it will end up in the same position.

However, the Vehicle Inspectorate's plans, announced in spring 2000, show signs of learning how better to work with these firms. They involve a lengthy testing programme, during which 1,000 of the 19,000 MoT garages will trial the system, then a gradual expansion of the network between May and October 2002. Any garage that finds its MoT terminal fails will be able to write, rather than print, a certificate, after checking with a call centre. To keep Siemens keen, the firm will not receive a penny of its£230m over 10 years until all 19,000 garages are online.

Furthermore, central government is working to improve the way it buys IT services. One innovation has been an e-government inter-operability framework (known as the e-GIF) that sets standards for infrastructure developments. This has already affected the NHS, which will now have to work with government-wide standards for e-mail and messaging (see 'to the letter', page 13).

The Treasury also established an office of government commerce last April. Its chief executive, Peter Gershon, told the Computer Services and Software Association's public IT procurement conference that until recently, 'central activities were not coupled with the real world'. Mr Gershon has been working on ideas to boost project management of IT contracts. His ideas include:

bringing in ideas from the construction industry, where state projects now use a clear set of performance indicators to track projects;

improving project management training within government departments to help them better manage large-scale projects;

subjecting all major projects to a 'gateway review', under which they will be regularly assessed.

'We have not just issued another report with very sensible recommendations, ' said Mr Gershon.

He believes that backing from the Treasury means the lessons of previous IT project failures will be taken on board, although he betrayed the scale of the task in a rapid correction to his conclusion: 'The real problem. . . challenge. . . that we have is how we apply those lessons to our projects. '

Much research in IT goes into adding in costs of maintenance, upgrades and users' time lost, rather than simply the upfront cost.

TELG APHC OLORLR AR Y However, these big projects take several years to get moving, particularly if they incorporate the extensive testing crucial to all good IT projects.

'Government has set a very ambitious e-business target, 'David Gould, deputy chief executive of the Defence Procurement Agency, told the conference.

'That target is very tough, although if we do all the right things, I think we can deliver it. '

A cynic may ask: why bother? The Inland Revenue's experiment with online self-assessment tax returns has hardly set the world alight. Despite a cash incentive and an advertising campaign, only 32,000 of the 6. 2 million submissions returned by mid-January were made online.

However, this was the scheme's first year, with the usual associated technical glitches normal to a new system. Other countries, such as Australia (see box) and the US, where 20 per cent of returns are sent electronically, make heavy use of such systems.

So people will use online services if they get some benefit from doing so. Indeed, sudden surges in demand are one of the problems on the web.

Last autumn, the Department of the Environment placed a well-designed service online mapping housing at risk of dangers such as flooding (www. environment-agency. gov. uk). The service was overwhelmed by those nervous about the deluges then affecting the country.

And, as commercial organisations increasingly provide services online, the public will expect to get information at any time, in the way that they have expected better handling of telephone enquiries as a result of corporate call-centres.

But, apart from the question of procurement, going online will require a culture change. Ms Hewitt last year told a Labour Party conference fringe meeting about a site to offer anglers a licence service online.

The firm concerned asked the Environment Agency for co-operation in selling more licences more efficiently. 'The agency said, we do not know about that. We'll have to think about it. We'll let you know in six months' time, ' said Ms Hewitt. The firm concerned found a way round its problem - it printed the licence details and took them to its local post office, killing any efficiency gains.

As Sir Humphrey once observed, government apparatus has the engine of a lawn-mower with the brakes of a Rolls-Royce. As in so many other areas of reform, all of which require time and effort, Labour will have its work cut out to get government online, despite the better service and lower costs this might bring.