Select Committee on Public Accounts Minutes of Evidence

Examination of Witnesses(Questions 60-79)



  60. You seem to be coming back again and again to emphasising your use of the web has a lot of benefits, whether hard or soft benefits. What you still have not satisfied me about is whether we are ever going to know whether the production of these benefits is of greater value than the cost of providing them.
  (Mr Pinder) I have genuinely tried to answer your question to satisfy you on that. When we want to spend money on delivering a service electronically, we make a business case, and people have to make a business case to spend the money. When they get permission to spend the money they have prima facie demonstrated they will get benefits which justify the spending of the money. That is what is done in every sort of expenditure, whether it is on web enablement or other things. Sometimes people judge the benefits to be worthwhile even if there are not hard savings but they offer a better service, but a business case is made, no difference is made for business cases being made on web enablement or on building a new local office to deliver a better service, exactly the same justifications are used.

  61. Are you saying to me that every time any work has been done on the web by any government department it has always been costed in advance and found to be cost effective in advance?
  (Mr Pinder) No, clearly it would be wrong of me to give that blanket statement, first of all, because I could not answer for individual government departments. But I do know that where there is a programme of work, for example, building a site and continually enhancing it, where little bits of work are being done week by week, then that programme of work in my own case—and I think the same standards are used by the Treasury elsewhere—would have to be cost-justified. I have, for example, the Government Gateway which cost £20 million[3] to build and then is being continually enhanced. We made a cost justification to build the thing in the first place and we have cost-justified the enhancements year on year as the thing gets richer in functionality.

  62. Have you also tested all those business cases you have made after the event to prove they have justified the cost because they have produced the value you have expected from them?
  (Mr Pinder) This area of expenditure is a very new area of expenditure. Part of the Government's methodology of running a project, and it applies to electronic government projects as well, is exactly that that sort of analysis is done. Did the programme do what it was asked to do, did it deliver the benefits it was supposed to do, did it deliver all the benefits on time. That is the normal audit which goes on and I would expect that approach to be used in the "e" area just as it would be used in other areas.

  63. Now you are confusing me. You appear to be saying every time anything has been done on the web, it has been costed in advance, the value you expected to get from it has been valued in advance, and you have found the value made it worthwhile. What is more, after the event, in every case you revalued, you have gone back, you have checked it did produce the value you expected, and you presumably worked out whether or not in that instance it was therefore cost effective. Adding all those instances together should, I would have thought, have proved to you whether or not the Government's use of the web was cost effective, but I was told just now by Mavis McDonald that you did not know whether the Government's use of the web was cost effective. Somewhere we have gone wrong.
  (Mr Pinder) I am not sure I put all that in my answer. This expenditure is largely capital expenditure, it is expected to deliver benefits over a long period of time, those benefits often come from people using the service, and therefore whilst one can build a business case and say, "We expect the site to do the following things, we expect the growth in traffic to this site to be as follows", the full benefits will not be discovered until the site is well enough known to hit its optimum traffic levels, until we have been able to release the benefits elsewhere. As I said, this technology is extremely new, what one can do is build business cases and use one's best judgment that the business case looks credible and then monitor the delivery against the targets embedded in the business case which we would normally have, to make sure the site is performing as well as it should do and that in the longer-term the benefits are delivered, but we have not reached the long-term yet.
  (Mavis McDonald) Partly what I was trying to do was to answer the fairly standard point that we are not collectively pulling together the information across government on all the individual departments' websites and doing a collective analysis. We are doing an audit of standards and the Treasury, as Andrew has said, is taking an overview on business cases, and we would expect those to be audited in their implementation. The other point I was trying to make was slightly different. Once you have your website up and running and you are used to it and you have made the initial investment, you start to think differently about what it is you are doing. So on some of the things I was describing like consultation, your presumption about how you will consult and how your stakeholders on client groups, and perceptions about what you should be doing when you consult, change, and it becomes a different working practice. So it becomes more part of your overhead of having to do things differently and you do not necessarily spend a lot more money each year. What you might re-visit is your communications strategy and whether you are using all the elements of it to best effect, rather than saying, "What are we doing on our website?" There are lots of examples now of where that shift is beginning to take place.

  64. Let me go on from that. There was a report the other day that the Inland Revenue had to shut down its on-line tax filing system after complaints that taxpayers' details were accidentally put on-line. What are you doing to make sure that the system is totally secure, not just in terms of whether or not financial payments may go adrift in some way, but in terms of whether or not there is privacy of individual's details and so on?
  (Mr Pinder) I cannot speak on behalf of the Inland Revenue who have detailed knowledge of this but, as you would expect, I am reasonably close to what has been happening there. The Revenue are clearly very concerned about the fact that snippets of taxpayers' information was visible to a few other taxpayers, and that is clearly regrettable, clearly wrong and that should not have happened. It is worthwhile trying to get the thing into proportion here. Whilst it is regrettable that any one taxpayer's information is made available to people, it might be helpful to the Committee if I gave my understanding of what happened in that situation, though the Inland Revenue will be issuing a more detailed report.

  65. Briefly if you will, because I am more interested in the general point.
  (Mr Pinder) The situation is that with one particular internet service provider, working with the front-end of the Inland Revenue site, about eight or nine taxpayers were each able to look at one other person's brief details. That was because of a technical problem in the way that particular internet service provider interacted with the system run by the Inland Revenue. That persisted for a short period of time, the site has now been closed down. We want to stop that happening again. The reason the site has not come back up again is because the Inland Revenue are doing very, very extensive testing indeed to make sure that cannot happen again. We have very stringent standards on security which we want people to adhere to and we take incidents like the Inland Revenue one extremely seriously, so it is regrettable. I am as concerned as anyone here, probably more concerned, in this Committee about that particular site. It is deeply regrettable.

  66. What are you doing to prevent that sort of thing happening again?
  (Mr Pinder) Sites have some technical standards which they are supposed to adhere to and in this particular case it appears, through a quirk, a technical standard which we were not aware of caused the problem. We are now learning from that experience and the Inland Revenue will be making sure that every other government department is aware of the particular peculiar set of circumstances which caused this breach.

  Mr Rendel: Good. Thank you, Chairman.

Mr Howarth

  67. Could I refer Mr Broadbent and his colleague to pages 23 and 24 of the Comptroller and Auditor General's Report, and paragraph 2.22 which goes over both pages? It says in that paragraph, "On the Web site in use throughout virtually all of 2001 we sought information as a new business owner on whether we needed to pay VAT. In June and again in November the information given on the site was elementary in character, with most Web pages being reproductions of non-Web leaflets." Has anything been done since then to improve that situation and, if so, what?
  (Mr Fraser) We carried out a significant overhaul of our website in the latter part of last year. We were aware of limitations in terms of content, in terms of ease of use and in terms of how often the data was refreshed. Whilst we are not complacent we have it all right, we have made significant steps forward. We are now receiving significantly more positive feedback and it is considered to be far easier to use and more reliable.

  68. That is reassuring to hear but could you be a bit more specific about what improvements you have made?
  (Mr Fraser) We have provided a search facility which allows us to search across the data we hold on our site, so rather than navigate aimlessly through our content you can reach material which interests you. We provide service up-dating which is current rather than material which is up to a month old. We have put in place publishing processes to alleviate that problem. We have put on to our site lists of contact details so that an individual who cannot find the information they are requiring on-line can do so through a telephone call to our national advice service or by e-mail to those advice centres. Those are the major enhancements.

  69. In the same paragraph it says at the conclusion, "The search engine on the site throughout most of 2001 was especially problematic—complex to use yet incapable of finding the basic search terms we submitted." I take it from the answer you have just given that problem has been resolved as well?
  (Mr Fraser) The problem arose because of the way we stored the data so the search engine which was quite rudimentary was not picking up the right answers because we were storing the data in a very simplistic way. We have changed the way we have stored the data so the search engine can now pick it up more accurately.

  70. What is the evidence about those changes and improvements from people? You said you have had positive feed-back, what is that positive feed-back? Are more people using that facility? Are there more people using it successfully? How are people letting you know they are pleased with those changes?
  (Mr Fraser) There is a facility on-line to provide feed-back to us which is extensively used. The individual number of visits to our site has risen from 170,000 in September to about 210,000 today. That is not a huge increase but it is significant. We encourage our contact centres to provide an opportunity for people to be asked if they have visited our site and, if they were unsuccessful in finding the information or what they were looking for, that is referred straight back to our web publishing team who then take corrective action.

  71. This is directed at Mavis McDonald and her colleagues. Page 57 and figure 21 over the page from it. Quoting from part of the paragraph, "The Department for Education and Skills has been top site for most of this period, but DEFRA, previously the Ministry of Agriculture, soared to prominence during the foot-and-mouth crisis in 2001." There is a self-evident reason for that. It then concludes towards the end, "Three sites with small numbers seemed to have weak or no growth trends—the Lord Chancellor's Department main site, the Department of Culture, Media and Sport, and the Ministry of Defence (for the short period for which the department has any data)." Is this because of the characteristics of the departments themselves, that some are stronger than others, or is it something to do with the type of site it is?
  (Mr Pinder) I cannot give you an answer on the individual sites because I have not myself looked at the Culture, Media and Sport site recently, so I cannot give an opinion. We do have, as it were, a list of the top 20 sites and the numbers of visitors they have. In this month of April we have more up-to-date information on my own site. It varies greatly. For example, in January, the Inland Revenue site leapt up in the number of visits because they clearly have a lot of people filing their tax returns at the last minute and going to that site. Clearly during the 11 September situation a number of sites, including in particular our site, had a very large number of hits as people tried to get some news, and other sites had difficulty coping. So there is a seasonal or topical issue around all this, where something is particularly important, and we have already referred to the Number 10 website around the Government reshuffle which obviously got a lot of attention. Obviously the old DTLR site had some increase for similar sorts of reasons at the time. So there are lots of variations which are caused by seasonal or topical issues. On top of that, there are some sites which are by their nature going to be more visited than other sites because their information is something which people regularly want to access rather than finding out about once. One of the reasons we have come up with the UK Online site is that it is directly linked to where people want to go to properly. I also agree with the implication of the question that there is a variation in the quality of government sites, and we try to address that by using the Government's web guidelines to try to improve everyone's quality and also provide guidelines on how to have standard navigation on the sites, so every site feels familiar to people even if it is the first time they have visited it because they know where the home page is and so on. I would absolutely accept that the quality varies and some is very, very good indeed, and some not so good. We try to reward quality and letting people know about that by having awards and so on and trying to rectify the poor quality.

  72. Do you think it would be helpful to have some evaluation? Some things are predictable, tax returns at a certain time, and probably the new academic year would create additional demands on education and so on. But for the non-obvious factors, would it be worth doing some work to look to what extent the quality of the sites affects use and utility?
  (Mr Pinder) It would and it is and we do it. This Report itself has done work on this by looking at a series of features and tracking them against what was done previously, and there has been an improvement across the board in that area. The NAO work has been helpful in helping to track those features. As I said in answer to an earlier question, we ourselves are also going to do two sets of audit, taking about a hundred sites and we are picking out the sites which are of a particular interest and comparing and contrasting and looking at what lessons can be learned there. So I take and agree with your point, we should be doing this and we do do it. In addition, there are external people, not just the NAO, but people like SOCITM, the Society of Information Technology Management, who are doing a lot of work particularly with local government in comparing sites and features on those sites, and that is very valuable work. We will be joining with them to try to enhance that work so that it becomes useful for all of us.

  73. I hope this does not make me sound like a modern Luddite but do you detect a sense in which the greater access people have either to information or to services or to transactions as citizens, or subjects, rather than commercial transactions, means there is a growing source for some sections of the community to be socially excluded?
  (Mr Pinder) Clearly, we want to make as much information available as possible to people, and by the nature of things the web is only accessible to those people who can have access to the web, so we are trying to improve access to the internet. There is physical access, and Mavis McDonald referred earlier to the UK Online centres, and by the end of the year we will have 6,000 of those which will improve physical access. We also hope to improve access to sites for people who have disabilities or in some way are handicapped in the way they read materials, so our sites cater for people who are blind, we have an RNIB four-star award for UK Online. We want to make sure the sites are accessible for those people who have reading difficulties so reading age needs to be thought about. We are not always successful with that but it is a feature we are deeply conscious of. On top of those accessibility issues, we do want to try and use intermediaries to make information and transactions available to those people who do not have access to the internet, and I referred earlier to the work we have done with the CAB and other intermediaries. The fundamental point you are raising though is true, the increasing use of web technology, both in the government arena and outside in the wider private sector, means that a digital divide does exist. People have access to cheaper air fares if they use the internet than they would otherwise have. That is why we spend quite a bit of effort promoting general awareness of the internet to get as many people as possible taking part in that. We had a campaign last autumn and we will be having another campaign this autumn to do that. But I take your point and agree with it, we are concerned about that.

  74. One of the problems in my own constituency is that there is a ward which is measurably one of the most deprived areas in Knowsley, which itself is one of the most deprived areas of the borough, and one of the things that has been done through European Objective 1 money is literally put computers into households to particularly help those children of school age. So they have clearly noted that this is one way of overcoming disadvantages in terms of poverty.
  (Mr Pinder) There are a number of schemes like that under the Neighbourhood Renewal Programme. Something which sometimes gets overlooked is that digital television also provides access to the internet, albeit in a very limited way, and there are about 7 million digital sets which are enabled for digital television in households around the UK, many of them in households which do not have access to PCs. We have understood that and are trying to use digital television as a means of providing web access. We have just gone live on Sky Interactive with UK Online to provide access and we have an arrangement with them whereby all government websites, once the content is suitable for digital television, will be accessible through that medium.

  75. One final question. I noted, Mr Pinder, you said earlier quite a lot of the work which is done in terms of developing new services and new technology is through consultants. Has any thought ever been given to providing a kind of government in-house consultancy service?
  (Mr Pinder) In order to?

  76. In order to actually have a group of people with the right level of skill and expertise within government to be able to offer their services as and when they are required by either yourselves or departments?
  (Mr Pinder) We try to do some of that both in my department and other departments like the Office of Government Commerce where there are, for example, people to help with procurement. We try to offer some help in particular situations. For example, two of my staff have been recently engaged with the Inland Revenue and their particular problems and there have been a number of other areas where we have put people in for a short period of time to help them. I am very constrained with resources and therefore I have got limits as to what I can do. Therefore, we try to get over that by issuing generic guidelines like our web guidance to say let us help make it available to everyone rather than just focusing on you. So there has been thought but it has not been felt to be cost-effective and it perhaps makes more sense to hire people in from the private sector as necessary.

  Chairman: Thank you, Mr Howarth. Mr Geraint Davies?

Geraint Davies

  77. Can I ask Mr Broadbent a few questions first of all. It was mentioned in terms of take-up that we have got something like 2,500 VAT users who are registered out of a total of 1.65 million. That is about right, is it not? Can I ask you what information you have got in terms of customer segmentation in respect of the usage of the 1.65 million universe and, given the information you have got now, how that influences how realistic you think the targets are to get 50% usage by 2005?
  (Mr Broadbent) I would like to ask Mr Fraser to comment in a moment on market segmentation where we are doing some work. There are some quite specific issues there. If I may just comment on the general point. As I was saying earlier, one of the issues that has come out of our focus on take-up as well as putting services on-line is that we are unlikely to drive take-up in that as a single product across the whole board unless we develop the way we are e-enabling our services.

  78. As you have mentioned it, and you mentioned it before, I was going to pursue this. Just as an example, at one point I was running a small travel company turning over just over £1 million and the VAT returns are quite complicated for travel schemes, the TOM scheme, and basically you did all this analysis and ended up filling in some boxes on a form and sending it off with a cheque. What incentive having done all this off-screen analysis to satisfy the law would there be to send the information down the line as opposed to putting it in an envelope? It seems to me very little.
  (Mr Broadbent) I think you are absolutely right. I do not believe that if we simply stand in a position where you can fill in a VAT return on-line as opposed to at your desk, people will do that because there is very little added value.

  79. How are you going to change the product to put in that extra? Are we going to be able to buy cut-price insurance or something? Will you have an amusing movie in the middle? What are you going to do?
  (Mr Broadbent) I do not think it is the right approach to incentivise people to use a service which does not add value. What we are trying to do is encourage more means of making the interaction with our organisation an added value experience and that is going to require us going rather beyond taking our existing system and simply creating a screen face rather than a paper face and change the system.

3   Note by witness: The actual cost was £15.6 million. Back

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