Examination of Witnesses(Questions 1-19)|
CB, MR ANDREW
WEDNESDAY 12 JUNE 2002
1. Good afternoon and welcome to the Public
Accounts Committee. Today we are considering the Comptroller and
Auditor General's Report on Government on the Web II. We are delighted
once again to welcome back Mrs Mavis McDonald who is the Permanent
Secretary at the Cabinet Office. Good afternoon. Could I ask you
introduce your team, please?
(Mavis McDonald) Yes. I should explain that I am Permanent
Secretary at the Cabinet Office and I am also now for a short
time carrying the responsibility for that but I am actually the
Permanent Secretary to the new Office of the Deputy Prime Minister
as well, so I have taken over Sir Richard Mottram's responsibilities
for local government. My team consists of Andrew Pinder, the e-Envoy,
who you know, and on his left is Andrew Whetnall who leads within
the new Office on e-government and relationships with local government.
2. And we have got Richard Broadbent, welcome
once again, you are an old hand at our Committee.
(Mr Broadbent) May I introduce Mr Alex Fraser who
is the Head of Logistics in Customs and Excise and amongst his
other responsibilities is responsible for our e-commerce and IT
3. Perhaps, Mavis McDonald, we can start the
proceedings by turning straight away to page three of the Comptroller
and Auditor-General's report. We see there that the "The
Office has relatively little up-to-date and good quality information
about the development of central government on the Web. It has
made limited progress on the recommendations of the Public Accounts
Committee in 2000 that it should collect and publish systematic
information on the development of government Web traffic . . .".
Why, when the government accepted all of the recommendations made
by this Committee two years ago, is it clear from this paragraph
when one reads it that you have made very little progress in implementing
a significant number of the recommendations of the Committee?
(Mavis McDonald) I think, although we agree with what
the report says clearly, we would not quite say that we have made
as little progress as is implied, partly because although we have
not been collecting detailed information on the content of individual
departments' websites, we have done a lot of work on website standards
which I might, with your permission, ask Andrew to comment on.
We have also seen a much wider spread of both websites and access
to inter-linking sites across government as we have developed
UK Online. We actually feel that we have been learning as we go
along, and we are not saying everything is perfect by any stretch
of the imagination, and we do feel that there is quite significant
improvement since the Committee last reported.
4. How much information have you actually got
on who is using these services? Are you satisfied with the information
that you do have?
(Mavis McDonald) The individual departments collect
data on who is accessing their sites and we collect data on who
is accessing UK Online, which is something we discussed with the
Committee in our previous session. We do not necessarily have
all the detailed information for each individual department held
centrally. I think as we explained last time, the difficulty is
knowing the difference between somebody who is accessing to quickly
move on to something else and following that track through and
somebody who is accessing and finding what they are wanting and
then delving into information. We are trying to have a better
understanding, and we accept the points in the report about the
difference between different kinds of accessing and accounting.
If I may I would like to ask Andrew to fill in some of the detail
(Mr Pinder) As you know, it is very hard to understand
where people who are directly accessing the site are coming from
because people using the Internet tend to be anonymous. They have
the option of registering on some sites, for example the UK Online
site, but they register in an anonymous way. They can register
showing interest in having responses in Welsh, for example, or
register for having information which is directly relevant to
Northern Ireland or Scotland and so on. The actual traffic itself
is anonymous. What we do collect is information about whether
5. You know for certain how much traffic there
is on every site, do you?
(Mr Pinder) I know for certain what the traffic is
on my site but there are 2,000 government websites.
(Mr Pinder) And we do not collect that information
7. That is what I find difficult to understand
from this report, why that is not collected. Is that not fairly
(Mr Pinder) It is vital information for many of the
8. Why do they not collect it then?
(Mr Pinder) Many of them do collect that information.
I think one of the criticisms, for example, was that the Treasury
did not collect information about the use of their site.
9. I will come to the Treasury in a moment.
(Mr Pinder) It is good practice to collect this information.
Our web guideline, a new version of which was published today,
but in the old versions as well, recommended that departments
did collect detailed information about the traffic through their
site, the time of day the traffic came through, the day of the
week it came through, where people went to when they visited the
site and so on. For the UK Online site and my own e-Envoy site
we certainly have got very detailed information that demonstrates
that. We can tell you how many users there are at a particular
time of the day, we know how many pages they looked at, we know
which topics within the site they went to. Most government departments
would do the same. We are about to embark on an audit of government
departments, two sets of audits of 100 sites, looking at the use
of the designed guidelines we have set out in our web guidelines
and we also will be auditing the traffic through the site. As
Mavis McDonald says, one of the issues with these numbers is they
tend to be very crude in the sense that they record things like
page views which are not always a good measure of the usefulness
of a site. Therefore, to try to reinforce that we have been doing
some more subjective work with some clients, getting some groups
of people in, and sampling how they feel about our own particular
UK Online site and also how they feel about other people's sites,
what more they want to see on it, how they navigate through the
site and so on, so we will get more subjective impressions about
how the site is used.
10. Thank you for that. I am sure we will come
back to that. Can I just turn to Mr Broadbent for a moment, please,
and refer you to page 20, paragraph 2.10, where if you read that
it says "Customs and Excise are only one of two departments
to have actual take-up or usage targets for electronic services
delivery specified in their PSA. Customs and Excise must persuade
35% of their customers into using on-line methods by spring 2004
and 50% by 2005". So you have set this quite difficult target
for yourself. What lessons do you think other departments can
learn from you by setting these difficult targets and how successful
have you been in meeting these targets?
(Mr Broadbent) I think on the first part of that question,
and I can only speak for our experience and I think there are
some issues about not every organisation being the same, for us
the existence of a take-up target focused our mind on what needed
to be done not just for the service on-line but to get people
to use it. It is not always the case that putting a service on-line
in itself creates enough added value to get people to use them.
That led us to think very hard indeed not just about putting services
on-line but about what do you have to do to change the way in
which the users of those services perceive value and get value
out of it. That has led us to develop our thinking, in some areas
quite radically, about what we need to do to change the nature
of the interface between ourselves and the customer. In terms
of progress, I am reasonably confident overall because some of
our existing services, for example import-export, already have
very high degrees of take-up. The area where we need to do most
thinking is VAT where take-up, as the report notes, is negligible.
This is typically an area where the issue I have just alluded
to arises. We need to work out how to add value to putting VAT
on-line so it is not just available but people want to use it.
11. You say it is negligible, I think this is
a key point. You have got 1,000 people doing their VAT on-line
out of a potential take-up of 1.7 million. The fact is that on
this you have made virtually no progress at all. I am told that
the pilot scheme that you initiated was a failure because of security
problems. How on earth are you going to meet this target? One
thousand people out of a potential 1.7 million. We are already
in 2002 and you are going to meet this target of 50% by 2005.
(Mr Broadbent) The conclusion we came to was two-fold.
The first thing was that we should not try and drive customers
on to the VAT on-line service until we could crack the underlying
issue and the underlying issue, as I say, is to make sure that
they get enough added value out of it to want to use the service
rather than to be pressured or otherwise coerced into using it.
How do we solve that problem? That takes us into a much more complex
area but the conclusion we are coming to, and we are still discussing
this conclusion with our ministers, is what you have to do is
change the operations and processes underlying the service. You
cannot just put the service on-line, you must change the operations
underlying it so that the interaction of the trader with Customs
and Excise, which includes the payment of VAT, becomes a quite
different experience and at that point people will shift, in our
judgment. The market research we do does not suggest that there
is reluctance on the part of traders to interact electronically
with Customs and Excise but what we are doing at the moment is
not producing an offering which makes it worth their while.
12. Are you insisting on using for secure purposes
(Mr Broadbent) We currently insist on a digital certificate
where payments or repayments are involved. We handle £140
billion of payments and repayments and security is very high on
our list of priorities. There is no doubt, as the report points
out, that this is an issue for us. Our customers, taxpayers, find
digital certificates relatively unwieldy to obtain. It has a cost,
not just the application fee but the actual cost to go into the
process, and once they have obtained them they can only use them
for a limited number of services which is clearly proving to be
something of a deterrent. This is a very rapidly developing field
and with our colleagues in the e-Envoy's office we are not sitting
here hoping something will happen, we have to develop either equal
security technology or we have to make sure, and there is some
work being done in the e-Envoy's office at the moment, that the
existing digital certificate is developed to make it more widely
13. What is your view, Mr Pinder, on digital
certificates? Is it true that you describe them as a miserable
(Mr Pinder) That is probably true. In their take-up
so far I think we do feel rather miserable about it. I am being
very blunt about that. We hoped that digital certificates and
their use in the wider economy would take up much more rapidly
than it has done. All the advice from outside, the industry, expected
them to take off but the fact is they have not. We had relied
upon them, as other people were thinking about relying on them
for their services, we thought about them in central government
as being a very strong form of authentication which suits the
purposes of people like Customs and Excise and DEFRA and so on.
Having got to a situation where take-up has been disappointing
we are doing two lots of things. First of all, we are looking
around for alternative means of providing the very strong authentication
that Customs and Excise, for example, need in making repayments
so we do not run the risk of fraud. We are also looking at how
we can try to make the markets develop more actively. The voluntary
basis on which the market has been run clearly has not worked
and I have said on a number of occasions, as have a number of
other people, we are disappointed in that. The time has now come
to look around at what we might do either to stimulate the market
or to look elsewhere for authentication.
14. Thank you for that. Mr Broadbent, I want
to refer you next to paragraph 2.18 on page 22 where you will
see that ways of doing a VAT return and cheque manually costs
around £1.16, doing so electronically would cost 25 pence.
I want to ask you, given this indication, what savings Customs
and Excise have so far achieved from providing services on-line?
As you have made very little progress presumably you have made
few efficiency savings?
(Mr Broadbent) On some of our existing electronic
services, for example in the case of import-export, where take-up
is over 99% we have historically taken savings out of the organisation
on that account. Clearly in the case of VAT, where our strategy
to date has been to put the service on-line to create greater
customer choice, we have not yet got the take-up which generates
savings and we have not generated high levels of savings. We have
generated modest savings which contribute towards our 2Ö%
annual efficiency target from the Treasury.
15. How much is "modest"?
(Mr Broadbent) It is very small. We are talking about
a strategy, the primary goal of which was to put services on-line
to provide customer choice. We are talking about relatively small
numbers of people who contribute towards our normal 2Ö% annual
efficiency target, we are not talking about major new initiatives.
Where the major new initiatives may lie is if we can achieve high
levels of take-up through changing the nature of the interaction
with our customers. As I was seeking to emphasise earlier, this
does mean moving significantly beyond simply putting a service
on-line, it means moving to change the way in which the basic
operations and processes of our organisation work. If we can do
that then I think we will generate significant opportunities,
not just in the area of input savings but also in compliance,
cost to the taxpayer and service levels. Then, of course, there
is a debate to be had about what is the trade-off you wish to
have between those benefits. There might be those, and we have
had some discussions in this room, who would say we should take
those benefits in the form of improved tax compliance rather than
input cost reductions.
16. Mavis McDonald, can I now take you on to
your new area of responsibility which is local government. If
you look at paragraph 3.20 on page 36 you will see there that
just over a quarter of local authorities let citizens pay their
council tax on-line. I see emphasis on the word "let".
How many citizens are actually paying their council tax on-line?
The government are spending about £350 million on this. It
is a flat rate grant given to every local authority, about £200,000,
is that not correct? What can be done to ensure that local authorities
provide more services on-line and how are you monitoring them?
(Mavis McDonald) If I can just pick up on council
tax first. One of the reasons why that take-up is relatively low
is the previous efforts by local government to collect council
tax by direct debit have been very successful and there is a high
rate of tax collection, around 95/96%, so that is not necessarily
a priority for some local authorities perhaps. The programme for
promoting a broader approach to electronic services and electronic
service delivery by local government is explained in full in our
new e-strategy on which we are consulting which relies much more
on a more comprehensive approach to the development of e-services.
The funding we are giving local government goes into revenue support
to them to develop their own thinking and their own management
of services and into capital support in a number of different
kinds of programmes which have some elements of national projects
which are of value across local government, some of which are
pathfinders which include partnerships of local authorities working
on different aspects of service provision together to try and
get efficiencies and in order not to reinvent the wheel. If you
want more detail I would ask Andrew Whetnall to fill in that detail.
17. We will come back to that later. Can I just
refer you to this Treasury problem. If you look at page 57 now,
paragraph 4.31, you will see "The Treasury responded to our
request for Web traffic data by saying that they had none at all,
for any time period". That struck me as an extraordinary
statement. Rather than put you in the dock perhaps I can ask the
Treasury this question. Have you performed better?
(Mr Molan) At the time the Report was carried out,
Chairman, the website was being redeveloped. I understand there
was some problem with the software which generates the traffic
statistics. Some data was provided but was not in a format that
was suitable. Since then things have moved on and the website
was relaunched in November of last year and we have daily traffic
monitoring information, and a monthly report analysing traffic.
It is a very popular website, with over 3,000 visitors a day.
On the day of the Budget the number was 33,000. I think the Report
is reflecting a point in the process when we had not quite got
our act together but things have moved on greatly since then and
18. Are you satisfied with that response, Mr
Pinder? I just find it extraordinary but I thought as a layman
it was relatively easy to know how many hits you have on your
(Mr Pinder) That is true and that data is available
in most departments and is collected. In fact, the Treasury, as
Mr Molan says, do collect it as well. At the time the Report was
done there was this particular situation where they were giving
an honest if slightly narrow answer to the questions that they
were asked and that was unfortunate. Certainly I would raise my
eyebrows quite considerably if departments of the size and importance
of the Treasury did not collect detailed information about the
daily traffic that hit their sites, the number of views they have,
the number of pages they have and the number of unique users going
through the site. As you say, those are absolutely standard pieces
of information which any competent webmaster ought to be aware
of and ought to make regularly available.
19. Thank you very much for that, it is mea
culpa, we accept that. Mr Broadbent, my last question is for
you. I want to askSir Nicholas Montagu has told us that
he is confident he can meet this target of all services being
available on-line by 2005. He was less confident that this 50%
take-up target would be met, which seems to be a fair admission.
I take it that given what we have already discussed, you cannot
really give us much of a commitment on your target, can you, particularly
on the take-up point if you are honest, as you always attempt
to be, of course?
(Mr Broadbent) I think the narrow but true answer
is that I think we may hit our target across all our services
together because we have some quite large services with very high
levels of penetrationI mentioned import and export. I think
the Report rightly focuses on VAT where unless we develop our
strategy fairly aggressively we will not achieve that take-up
target. I do think if we develop our strategy aggressively it
is possible not only to meet it but to exceed it. I would just
like to make two comments on that. One, by "develop our strategy
aggressively" I mean moving the emphasis from putting services
on-line to redesigning the underlying operations and processes,
that is the lesson we have learned from having a take-up target.
Secondly, when I say meeting it or achieving it, to do that we
will need to do things we are not currently doing. Those are matters
we are currently discussing with our Ministers and I am not in
a position to say how that will emerge.
Chairman: Thank you very much for that.