The government has a target of getting all services online by 2005, with a growing proportion able to allow citizens to deal directly with government to pay taxes and fines, claim benefits, fill in forms and undertake other transactions. But hopes expressed both inside and outside government that the process will produce significant savings will not be realised, according to Kable, the IT market analyst - certainly not in the short-term and possibly never.
By 2005-06, e-government may be generating savings for both local and central government of £289m a year, the study says - but the spend on the system will still be running at £1.2bn.
"On an annual basis, savings may match costs in 2012," said Karen Swindon, Kable's head of forecasting. "However even this is optimistic."
It is possible, she said, that the savings may never overtake the costs so that e-government, while sharply improving services for those able to take advantage of it, may remain an additional cost: "Unlike the private sector, the public sector cannot maximise the savings from digitisation by dramatically cutting physical access [to services] and staff numbers, as it has a duty to ensure equal access for all, including those who do not have digital access.
"This means that in many cases, parallel physical and digital processes have to be maintained to a far greater extent than in private sector areas such as insurance and banking. This is costly."
Between 2001, when the e-government programme got properly under way, and 2005-06, local government is likely to spend just under £3bn getting services online while central government will spend £4.4bn, Kable estimates. Spending will start to fall after that, once much of the infrastructure is in place, but total savings over the same period are likely to be only some £820m.
Some government departments with high levels of financial transactions such as the Inland Revenue and Customs & Excise may be able to achieve big savings by getting transactional services online and collecting revenues more effectively, Kable said. But the need to maintain access to services for people not equipped to go online will limit savings elsewhere.
Savings may well be easier in government's dealing with business than in its dealings with individual taxpayers and citizens.
Quelle: Financial Times
