IT company executives used to tell us that the internet would change the fundamental laws of economics. Scary. But not as scary as the industry's current mantra, which is that the internet will change the nature of government.
Industry-sponsored conferences and publications evangelising "e-government" are springing up like TV quiz shows. IBM and Microsoft recently held government conferences and the management consultancy Accenture has published a major survey on the subject.
Magazines aimed at civil servants are stuffed with ads from IT companies offering to solve government's problems. It's easy to see why. When traditional high-rollers like banks are no longer throwing money at IT, government is the only game in town. Public agencies around the world are racing to meet target dates for going online. The US's e-government deadline is November next year; the EU says member states should offer electronic access to basic government services by the end of this year.
Some countries - Singapore and Australia - are already there. At first sight, the UK's deadline, the end of 2005, is more modest. But our e-government effort is wider and deeper than many. The target applies across all tiers of administration and all public services. About half of the 520 services are "e-enabled". Accenture's survey, which tested 23 countries' online government services for "maturity", placed the UK sixth.
Canada came top, followed by Singapore, the US, Australia and Denmark. I'm an e-government enthusiast. The internet is my first point of contact with my local authority and most government agencies. I've even ordered a copy of my French criminal record online. But we're liable to forget that e-government costs money. Officially, the budget for "UK Online" is £1bn over three years, but the real cost will be higher. IT projects under way in central government departments add up to £10bn, the National Audit Office said last week. And local councils, most of which are getting only £200,000 to go online, will have to pay for their schemes, mainly from rates. This year, the US government will spend more than $1bn a week on IT. But isn't e-government supposed to pay its own way by cutting the cost of bureaucracy?
That was the dream. In 1999, Hewlett-Packard's advertisements were saying that e-government could "radically reduce" the cost of running public services, and hence taxes. It hasn't happened. While transactions such as licence applications are much cheaper to process electronically, it is difficult to convert these savings into overall administration savings. Unlike banks or supermarkets, governments can't shut down their least productive branches. When I pressed local government minister Nick Raynsford recently, the only example of e-government savings he could suggest was cutting the paper bill.
In the heady days of dotcoms, no one worried about paying for e-government. Impower, the company that launched Britain's first e-licensing service (for fishing licences), lost money on every transaction. In the US, companies like GovWorks (star of the cult movie Startup.com) tried in vain to sell advertising space on their web portals. Realism quickly set in. Impower killed its fishing licence service as soon as the Environment Agency launched its version. Public bodies are beginning to recognise that when services or staff numbers can't be cut, the user has to pay. The City of San Francisco charges a "convenience fee" of $2.75 for paying parking tickets online.
Even the evangelists are now talking less about cost savings. Accenture's report admits that: "Expectations that e-government would reduce the cost of service delivery have not been realised."
They say it is because the system hasn't been properly tried. E-government is still in its revolutionary phase. Its catchphrase is now "back-office integration", code for ruthless rationalisation. "Technology is now being seen as just one of the tools that can contribute to reinventing government for the digital age, and facilitate the development of nimble, lean government structures," Accenture says. But these lean structures come at a cost:
* To employment. Unloved monsters such as the Driver and Vehicle Licensing Agency and the National Insurance Contributions Office mean a lot to the citizens of Swansea and Newcastle upon Tyne.
* To privacy. Back-office integration is the reason the Cabinet Office wants a fundamental change in laws protecting personal data.
* To democracy. There's nothing lean about devolving power to local governments, but there are good political reasons. If e-government is worth doing, it's worth paying for.
· E-Government Leadership - Realizing the Vision. Accenture, April 2002.
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