Select Committee on Public Accounts Minutes of Evidence


Examination of Witnesses (Questions 1-19)

MAVIS MCDONALD CB, MR ANDREW PINDER AND MR HUGH BARRETT

MONDAY 13 MAY 2002

Chairman

  1. Order, order. Welcome to the Committee of Public Accounts. Today we are considering the Comptroller and Auditor General's report on Better Public Services through e-government. We are very pleased to welcome once again Mavis McDonald, who is Permanent Secretary at the Cabinet Office. Would you like to introduce your team for the benefit of my colleagues?

  (Mavis McDonald) On my right is Andrew Pinder who is the Government's e-Envoy and who leads on this work within the Cabinet Office framework. On my left is Mr Hugh Barrett, who is Director for Supplier Relations and e-commerce at the Office of Government Commerce.

  2. Thank you for coming to talk to us this afternoon. May I start with two or three questions on whether the Government have made sufficient progress in meeting the targets they have set themselves? Would you refer to page 22 of the Comptroller and Auditor General's report and look at paragraph 1.12. You will see a phrase there which rather surprised me when I read it, "Apart from revenue collection transactions such as self-assessment tax returns and VAT there is very little opportunity for citizens and businesses to carry out transactions with Departments electronically". Why do so few of the services which are offered electronically by Departments allow members of the public to carry out basic transactions on-line?
  (Mr Pinder) In fact rather more than half the services which we identified in our work with Departments are now on-line and by the end of this year about three quarters of them will be-on-line. The reason why the NAO have picked in particular on the transactions is because transactions are much harder to put on-line than the simple information-only services. They often require changes in Departments' infrastructures; for example, some of the Inland Revenue services require some central infrastructure to be put in place. From my point of view it is less surprising that the more difficult services are later to come on-line than some of the relatively simple, low-hanging-fruit services. We are still relatively confident that by 2005 Government services will all be on-line both centrally and at local government level.

  3. Government services including transactions.
  (Mr Pinder) Including transactions.

  4. The pledge you are making is 100 per cent on-line by 2005, is it?
  (Mr Pinder) It is not a pledge I can make. It is my view based on what Departments are telling me. Departments have produced individual e-strategies which demonstrate they are on track to get all their services on-line by 2005 and local authorities themselves have also produced e-strategies called implementing electronic government statements, which show that they are on track also for getting their services.

  5. Let us assume for a moment that you are correct and 100 per cent of services are on-line by 2005. Is there a real risk that the public may not want to use them, not have the expertise, the willingness? How much effort are you putting in to persuade the public the value of using these services, 100 per cent of which are going to be on-line by 2005?
  (Mr Pinder) Two sorts of effort need to be put in. One effort is making the public themselves on-line. Just under half the adult population regularly use the internet. That is a key numerator in all this. The more people we have on-line, the greater the base from which to draw for people to access Government services. For me then the key to getting services taken up by the public is to have those services on-line in a very attractive way, ways which make it look as though the thing is easier to use than popping down to the local Tax District Office or the local Benefits Office. That is the effort we are now putting in and saying to Departments that they really have to look at their customers, to understand what it is their customers need and respond to their customers in a very positive way. For me then it is up to Departments to say what their customers need, how they are going to respond to it and that in itself will drive take-up.

  6. If you go back to page 3 and look at paragraph 7 of the Comptroller's report, what is your e-target really about? Is it just about making services available, which is only half the battle, or is it actually about achieving levels of on-line take-up by the general public? If it is not about the latter, could we not be in a situation where a vast amount of Government credibility will be expended for very little purpose or use?
  (Mr Pinder) The formal Government target to which the Government have committed is having all services on-line by 2005. We and Departments are working towards that particular target. Having said that, I think you are quite right that there is absolutely no point at all having services on-line which people do not use. Departments in my view also need to be working very hard on making sure that their services are attractive to people so that they will use them. In terms of formal targets, the ones I am formally responsible for, then it is the target of getting all services on-line. However, I think with you that it is very necessary for Departments to be sensitive to their customers, focused on their customers and to consider how they can deliver these services in a customer-focused and attractive way.

  7. Would you now turn to page 60 and paragraph 3.9? What worries me there is that you have significant efficiency improvements which could be made the more people go on-line. Why have Departments not set targets to achieve them? It says in paragraph 3.9, ". . . very few departments have established baselines against which to measure improvements". Is that not rather a damning statement?
  (Mr Pinder) I do not think so. I have no idea what was in the NAO's minds when they made that statement; I rather hope it was not damning. For me Departments should be looking not just to make efficiencies, but also to make improvements to the service, so that the services which are offered are better services and deliver an improvement in people's or businesses' experience of Government services. It is for individual Departments with the Treasury to decide what efficiency statements are going to be made—Departments have PSA targets and it seems to me that as part of the overall efficiency of Departments they should be looking at what efficiencies can be made. I am sure that as an individual project comes forward for approval by the Treasury the Departments in getting justification for those projects will be demonstrating what improvements either in service or general efficiency they are making. It seems to me that is best at a project level as the projects come forward.

  8. What worries me is that despite all this effort and despite you staking a lot of your credibility on this, certainly at the moment you are in a situation where supply is deficient. Even if you get to a situation in 2005 where supply is not deficient, you could still be in a situation in which demand is not sufficient. Please speak in general terms now. I just wonder whether you should not be putting a lot more effort into trying to do more in terms of advertising to encourage people to take up these services? Is that a fair criticism of your efforts so far?
  (Mr Pinder) No, I do not think it is fair.

  9. Give us a flavour of what you are trying to do to persuade the public of the value of taking up more Government services through their laptop.
  (Mr Pinder) May I start with the statement about the supply not being sufficient? We are actually making quite good progress towards the 2005 target. This was a target which was set fractionally over two years ago in March 2000 when the commitment was made. Since then, we have reached the stage where more than half of Government services are currently on-line, albeit very few of the transactions, which are about one quarter to one third of those services, are available. By the end of this year we hope to have three quarters of services available on-line and Departments are demonstrating through their e-strategies that they are on track to hit the 2005 target. Departments are making pretty good progress in getting their services on-line. The issue then is how we get the public to use them. Large numbers of people are already using some of these services, for example large numbers of people are using NHS Direct, which is a very attractive service, which offers very good advice to people. There are lots and lots of examples of services already on-line, particularly the advice services which are heavily used. On the transactional side in particular, but also on some of the other services, it seems to me that Departments have to focus on their customers to really understand what their customers want. The effort we are putting in is to say the plans look credible, now talk to us about your efforts to get these services delivered in an attractive sort of way. We are working first of all within Government with Departments to get them to think in a very customer-focused way. Second, as far as the general public is concerned, we are running advertising campaigns which were on last autumn which are encouraging the public generally to get on-line, a fundamental number of people using services, and we shall continue to campaign in that sort of way. Attacking this thing in this two-pronged manner is the right thing to do.

  10. May I leave those general issues for a moment and look at the delivery of IT projects and turn to Mr Barrett? Would you turn to page 29, paragraph 2.6? Looking there at the gateway reviews, this Committee have written numerous reports on IT projects, IT projects which have been over budget, which have failed. If you look at this paragraph here you will see that gateway reviews still found that "Seventy-six per cent (35) of the projects reviews ... had three or more aspects requiring improvement". What have you been doing to remedy these deficiencies?
  (Mr Barrett) The first thing to say is that the gestation period of IT projects is fairly long. The gateway review process has been in place since December 2000. So far we have had 223 gateway reviews of 175 projects, representing something like £18 billion of expenditure. The emerging evidence from those reviews is that where gateways are held early, the projects are more likely to succeed. Indeed on a recent relatively small sample, we saw that there was a 50 per cent improvement in their chances of success, but obviously what is needed is early gateway involvement. Many projects you are referring to will have started their life before this process was in place.

  11. I am addressing my remarks to Mr Pinder, Ms McDonald, because you may think that he is the expert on this, but if you want to chip in, or if it would be more courteous of me to start with you ...
  (Mavis McDonald) I am quite happy. If there is anything broader to add I shall come in at the end.

  12. Let us end with a few general points. There are some interesting paragraphs right at the beginning of the report. Would you go back to page 4? I want to refer to these paragraphs here which sum up some of the problems: paragraphs 11, 12 and 13. Paragraph 11 says, "There is . . . considerable variation in the quality of information which departments have on their key users and client groups, for example on the frequency and ways in which citizens access government services". Would it be fair to say that you are going to find it very difficult to encourage the public to take up all these services if you do not really have much information on what the public wants?
  (Mr Pinder) If that were true about an individual Department that would be a very fair statement. I absolutely agree that it is crucial that a Department, in delivering its services, needs to understand the people it is delivering those services to and respond to those needs. I agree with that.

  13. Is this a fair criticism here? Is this paragraph not saying that some Departments you are trying to encourage to take more of an interest in this subject actually lack the basic information about the needs and preferences of the public? Is this not what this paragraph is saying?
  (Mr Pinder) It may well be what this paragraph is saying. Asking me to comment on that is rather difficult. I do not know the individual detail of individual Departments.

  14. Do you want to make a general comment on this Ms McDonald?
  (Mavis McDonald) Yes, if I may. The Cabinet Office has done some work with Departments on developing a customer focus where they are delivering services directly. Before the last election we had a series of consumer champions within Departments to try to pick up and run with this agenda; since the election, the Office of Public Service Reform is following through on that work both in terms of working with individual Departments on how to do this but also in following up some of the experience from abroad, particularly Canada. There people have managed to develop a `time series' to track customer satisfaction (through research) in relation to different kinds of services which gives a pretty sophisticated analysis over time of how people respond and how to understand what they are saying back to you. That work is going on at the moment. The whole of the Prime Minister's public service reform on deliveries is driven by the objective of improving customer focus. That objective does not just apply to e-projects, but the whole delivery of a service and the way in which the capacity to use e-delivery of services to improve the range and choice of services available to the public is focused on e-customers. That work is coming up through the delivery unit as well. We are trying to sharpen up the act generally within the Cabinet Office and Departments on how to get that better understanding you are talking about.

  15. That is all very well. If you turn to the end of the next paragraph, paragraph 12 on page 4, you will see "Very few of departments' e-business strategies have as yet considered how best to market e-government services or have formulated action plans for doing so". Why have so few Departments recognised the need to market the benefits of e-government? Is this not a devastating statement?
  (Mr Pinder) It is a very strong statement. To some extent it is true. Until relatively recently Departments have been focusing on getting their services on-line and getting plans available and the back offices prepared so they can hit the 2005 target. We have been pressing them and many of them have been responding very positively to the point that they now need, in looking at how they market those services and how they design the service to start with, to be very responsive to their customer needs. I agree with that statement.

  16. I should point out that this report has not just been written in a vacuum by the NAO, it has been agreed with you.
  (Mr Pinder) Agreed with us.

  17. Lastly, paragraph 13 tells us that "Only 7 per cent of those in the lowest income group have home Internet access compared to 71 per cent of those on higher incomes". What can you tell me to reassure me that people, particularly the elderly, who do not want to use these services, are not going to be disadvantaged?
  (Mr Pinder) One needs to think about two things here. First of all, often people do not use the internet not because they do not want to but because there is a confidence issue or because they do not have the physical abilities available to do so. One of the things we have been doing is working to make public facilities available so people can access the internet from a variety of places under the general brand name of UK online centres. By the end of the year all libraries will be on-line and large numbers of other community based centres where people can go and access the internet for free. There will be about 6,000 of those by the end of the year which is a coverage which will bring 98 per cent of the population to within a few miles of one of these centres; in urban areas the vast majority of the population within one mile. Physical access is part of all this. Indeed very many particularly elderly people do use libraries and so on as places where they go to read things and many of them are also using on-line services in libraries. That is one issue. The second issue is a general education issue which is trying to remove the fear of the internet. Our advertising campaign last year and much of the literature we put out is aimed at trying to do that alongside the Department for Education and Skills whose adult education programmes are also aiming in that sort of area. It is not just people who have direct access to the internet who benefit when a service goes on-line. When a service goes on-line, the act of bringing it on-line enables another group of people, intermediaries, to step into the breach and deliver services to those people who for one reason or another do not feel able to access the internet. For example, the Citizen's Advice Bureaux, to whom we gave quite a large amount of money last year to help them build up their IT capability, are a very important intermediary in delivering Government services to their client base, many of whom fall into the large number of low income people who do not have access to the internet. In doing so they use the on-line Government services we are delivering. We are trying to make sure and are very, very conscious indeed that we do not want this digital divide to open up. We want to make sure that people are not disadvantaged, are providing physical access by providing confidence for people and also by providing help for intermediaries who themselves can reach out to those groups of people.

Mr Osborne

  18. The NAO report identifies as one of the problems of the development of the e-government culture within Whitehall the suspicion of some civil servants that they are going to be put out of a job. Do you think you helped that problem when you told the Sunday Times yesterday that 800,000 of them are going to lose their jobs?
  (Mr Pinder) I am sure that if I had said that I would not have helped the process. In fact the Sunday Times have never spoken to me and I am glad to have the opportunity to put that on the record. I suspect that article refers to a discussion I had in a seminar with other people 6,000 miles away about three weeks ago when someone asked me what the efficiency effect would be, to which I responded that I did not know. I drew a differentiation between the private sector and the public sector. The public sector in making efficiency savings by trying to get things on-line pays a great deal of attention to improving Government services. Therefore, often what happens is that where there are savings, that has to be taken on a project by project basis and those savings are often redeployed into providing a better version of the service or serving people who are not currently being covered. That discussion, which was actually quite a long discussion on this subject, was taken completely out of context by a series of reports which ended up in the Sunday Times. I absolutely did not say that 800,000 civil servants would lose their jobs.[1]

  19. You are quoted as saying "You could take 20% out of the cost of staffing over 10 years".
  (Mr Pinder) I said that the private sector would argue that you could take 20 per cent out of the cost of staffing in ten years. I went on then to point out why the private sector was different to the public sector.


1   Note by witness: I was quoted following comments made at a lunch during the Microsoft Government Leaders' Conference in Seattle (April 2002). Back


 
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