The State of the E-Nation

The UK government today published its second annual report for UK Online - the name it gives to the grand project of "ensuring the UK is a world leader in the knowledge economy" - and Trade Secretary Patricia Hewitt and e-envoy Andrew Pinder were on hand to answer questions.

Mrs Hewitt spoke enthusiatically about the "real progress, real achievement" that the government has achieved in the last year; that 50 per cent on all government services were now online; that we have the "most advanced e-government structure in the world" and that our Internet usage is the highest across Europe. Mr Pinder was equally chuffed.

Sadly though, the 133-page report made it clear that the government is falling behind on its own aims. Pinder agreed that the extensive "action plan" detailed in the new report - and last year's - should have been completed during 2000.

But this wasn't the case with most of last year's plan - of 94 recommendations, 53 are being "taken forward". Items "completed" include the DTI encouraging employers to provide PCs and Internet access for home use. Items "taken forward" include Oftel's move to unbundle the local loop.

Nevertheless, both ministers dismiss independent reports over the course of the year which indicate the UK is behind nearly all comparable countries on many aspects of the e-conomy.

A worldwide survey last month concerning e-government saw the UK come 19th out of 27 countries reviewed, with 11 per cent of UK citizens using government services. The UK beat only Turkey, Indonesia, Russia, Poland, Lithuania, Slovakia, Latvia and Malaysia. It was also the third worst in the world regarding the discrepancy between people online and people using e-government.

This apparently damning review of the UK Online project was dismissed by the e-envoy as inaccurate (as it was based on transactions). "If you look at every indicator," he claimed. "You will find the UK is one of the top one or two countries in the world."

Broadly Speaking

What then the OECD report which put the UK at the bottom of an international league table of broadband countries (despite recording an increased number of hi-speed Internet users)?

Or the Forrester Research report which said the Government is "failing to make the grade" and is jeopardising £3.7 billion in cost savings?

And then the report by lobby group Eurim which said the government's stated aim to have everything online by 2005 (something it still claims it will reach) is "doomed to fail". We could go on.

Stuff and nonsense, the government says. "We are moving quite rapidly to getting [government] transactions online," Pinder told us. "We will have 74 per cent of them online by next year."

But what is online? A little investigation we undertook earlier in the year showed how Whitehall has a very novel way of defining the existing infrastructure - like phones - as being "online" and so include them in the figures.

So what are the excuses? With regard to broadband, the government leans towards the BT argument - that the amazing success of narrowband unmetered Internet access has stifled broadband demand. But today, Hewitt and Pinder also reiterated every other point of view in the broadband market: a lack of content is holding back demand; there is still plenty of spare capacity; the price is important and needs to come down; but the market is dictating the price and that's right. Not that there isn't huge interest in the broadband infrastructure.

Another tactic appears to be to blame it all on the Treasury - something that has become fashionable in other government quarters in recent weeks. Ms Hewitt was very favourable to the recent Carter review which recommends cash incentives to small businesses to get them to send end-of-year financial details electronically. However, whether this scheme should be extended to other parts of the economy was "a matter for the Treasury".

Andrew Pinder ruled out any subsidy to users to encourage broadband take up. And just yesterday, the government decided against just one of the 15 recommendations in the Broadband Stakeholder Group report - tax breaks for telcos to encourage them to build up the infrastructure. The government has also refrained from telling BT that it must reduce the cost of broadband.

Broad Brush

What is the government actually doing to make the UK "the best place for e-commerce in the world"? It is opening online centres for those without money or formal qualifications - there are now 2,000 UK-wide. It is running TV and poster ad campaigns to inform and encourage people to go online. It is continuing work on the Government Gateway and it "has already started work" on getting information into WAP and Digital TV formats.

This year's report contains an increased number of 109 recommendations. The government has got its work cut out. It can expect a far more hostile reception if it fails to meet the same number this time next year. ®

Related Link

UK Online: Annual Report 2001

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