Select Committee on Public Accounts Minutes of Evidence


Examination of Witnesses(Questions 1-19)

MAVIS MCDONALD CB, MR ANDREW WHETNALL, MR RICHARD BROADBENT, MR ALEX FRASER AND MR ANDREW PINDER

WEDNESDAY 12 JUNE 2002

Chairman

  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 activities.

  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 on that.
  (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.

  6. Exactly.
  (Mr Pinder) And we do not collect that information centrally.

  7. That is what I find difficult to understand from this report, why that is not collected. Is that not fairly vital information?
  (Mr Pinder) It is vital information for many of the departments concerned.

  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 digital certificates?
  (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 applicable.

  13. What is your view, Mr Pinder, on digital certificates? Is it true that you describe them as a miserable failure?
  (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 improved.

  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 website.
  (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 ask—Sir 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 penetration—I 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.


 
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