The government this week announced an initiative to boost IT literacy by encouraging workers to get a computer and go online. Called the Home Computing Initiative, the drive is essentially clarification and amplification of a tax allowance made two years ago in which employees can have a £500 allowance on loaned computers.

Combined with a salary sacrifice scheme, this means employees can have a working computer for around £5 a week.

The guidelines now have the backing of the Department for Trade and Industry and the e-envoy, which will make a powerful difference to the scheme. Martin Prescott, managing director of computer supplier RedPC, latched on to the allowance early and found few takers.

"If you go to someone and offer them something that's too good to be true, they tend to start looking for a catch - so [employers] were listening to us then ringing the local Inland Revenue, who were saying 'we've never heard of that'."

People who understood the opportunity have found it a popular scheme with employees, however. Adam Crozier, chief executive of the Royal Mail, confirms the organisation offers the scheme and that around 10% of employees have opted for it. Before the scheme started, 13% of employees owned a computer, as opposed to an average of 50% in most companies. Today, 18,000 have signed up. Internal communications are improving as IT literacy spreads, adds Crozier.

The revised scheme has brought the private sector in as well as government, to address the needs of the consumer market. Intel, Microsoft, BT, the CBI and the TUC are among those backing the initiative.

Rick Skett, country manager for Intel UK and Ireland, believes it will become an example of public/private initiatives working well. "We've been talking with 40 companies including consultancies, distribution channels and employee organisations so this reaches employers and employees."

Skett sees the initial objective as communicating the benefits to employees. He is also familiar with Inland Revenue offices being ill informed about the legality of the scheme. Intel has had an employee seconded to the Office of the e-envoy for months to get the scheme publicised throughout the Revenue. In cases where the computer is used for learning, it also becomes eligible for VAT relief.

Patricia Hewitt, secretary of state for trade and industry, is bullish about the benefits. "Basic computer and technology skills are now regarded as essential for the majority of jobs," she says. "Home Computing Initiative schemes can help realise personal and professional potential."

The participants concede that it is essential to get the scheme right. Prescott refers to a scheme in Sweden, which was less successful because, he suggests, the suppliers were not vetted adequately.

"You had companies going under, computers not working and nobody able to repair them - it was chaos." He and other partners from the scheme have therefore drafted a "providers' charter", which sets minimum service level benchmarks.

And the support will come from the third parties. Nothing will put employers off the idea more quickly than constant calls from employees to the IT department asking for help on booting Windows.