It has become something of a running joke that, whenever anyone wants to demonstrate that online public services can be successful, they’re about to utter the words ‘vehicle licensing’. When an example of best practice becomes quite this ubiquitous, observers begin to suspect that it owes its high profile to a rather pathetic lack of competition.

Recently, things have improved somewhat, with HM Revenue & Customs’ tax returns system winning accolades. But progress on moving services online has not met the starry-eyed aspirations of the transformational government agenda. Last week’s Smarter Government report (see also p1, p2) aimed to increase the pressure on this front – and its presentation suggests that ministers and officials believe that sticks as well as carrots will be required to shift service providers and users into the online world.

As Gordon Brown argued at the report’s launch, online services can meet users’ needs more easily. “Online, we can provide services which are much better, are available 24/7, and which meet people’s needs,” cabinet secretary Sir Gus O’Donnell told Civil Service Live in Manchester later that day. “It’s amazing how many people access some of our online services at 4am. That’s when they find it most convenient.”

The real driver behind the agenda’s new momentum, though, is of course the aim of reducing costs. Brown told his audience that an online transaction, on average, saves £3.30 compared to a telephone call and £12 compared to a letter. And the report cites evidence suggesting that if every non-internet service user made just one digital contact with public services each month instead of using a traditional access point, the government could save £900 million a year.

In order to drive up online service use, Brown announced a twin-track strategy. On one side, the ‘champion for digital inclusion’ Martha Lane Fox is working to spread internet access to the 10.2 million people without it, and has been given £30m and a target of providing access for one million people in three years. So the carrot comprises better and more convenient services, with savings for the taxpayer and access facilitated for those not yet on the web.

On the other side lies the very large challenge facing government: to increase and improve its online services in an attempt, as Brown put it, to “shift the great majority of our transactional services online”. Smarter Government announces a set of “departmental channel strategies” that will “set out service by service how transactions with government will move online as rapidly as possible, with a view to targeting near 100% by 2014.” Next year’s budget will set out a timetable for an online child benefit service, and by the end of 2010 a “digital Britain roadmap” will include transition plans for key services such as student loans, JobSeeker’s Allowance and child tax credits. The document also states that the existing websites Directgov, NHS Choices and Business Link will “join up and transform” to accommodate new online services.

By 2011, says the government, all VAT returns and employer tax returns will be collected exclusively online – and here we find the stick. As O’Donnell told Civil Service Live, the government will look for “different ways to incentivise people and get that digitally-excluded group online, and one of the ways might be to say: ‘Here are some benefits, some interactions with government that you can only access online’.”

The cabinet secretary is clear that internet access will never be universal, and that some transactional services – and many that require a more complex provider-user relationship – will demand provision on a range of platforms. “We’ll never be in a situation where we can be 100 per cent online. There are certain disadvantaged groups, for example, that we need to help; some people are scared of interacting with government,” he told the audience in Manchester. “But actually we’re keeping these [conventional] channels open for a number of people who would be better off if we could persuade them to take the plunge… and get into that [online] world. They’d be really grateful for us having done that.”

Pushing reluctant service users online, O’Donnell said, might involve closing some traditional channels. “We already have some services – the Insolvency Service has a debt service – which are only online, and if you leave open those other channels you don’t encourage people to move over,” he said. “I’d like the default in many cases to be to give people the option of going online and to strongly incentivise them to do so.”

Devising websites and IT infrastructure that can handle and deliver a growing range of public services will present a daunting task – as will the job of assembling the finance for new IT systems in the current public spending environment. Asked how departments will expand online services in a spending squeeze, O’Donnell told Civil Service World: “This is one of our great challenges. We need to think about exactly how we can generate the resources to improve services. In some cases this will be in-house, through finding ways to reprioritise, to accelerate those sorts of programmes.”

Despite all the rhetoric about ‘more for less’, the cabinet secretary accepted that the reality will in some cases be ‘less for less’. “There will be some very difficult prioritisation choices, and in some cases it will be about stopping doing things that we’ve done in the past, in order to free up resources,” he told CSW.

So departments are being tasked with upping the pace of change towards online services, while finding the investment cash to get new websites up and running and using forms of ‘encouragement’ that verge on the robust to entice service users into the new channels. As O’Donnell says, successful transitions should create improvements for service users, public agencies and taxpayers alike – but nobody is underestimating the scale of the task ahead.

“We have examples of where we’ve done this very successfully. There have been quite a lot of quietly successful IT projects, and we need to learn the lessons as to how we do this better,” says the cabinet secretary. Then he casts around for an example: “Car tax is an obvious one,” he says; and he looks slightly uncomfortable. If Smarter Government achieves its key objectives on online services, we will soon have a wider range of best practice case studies to pick from.

Going digital: Smarter Government’s techie ambitions

• To roll out the ‘Tell Us Once’ pilot, which has been exploring ways to reduce the number of agencies that must be individually informed about births and deaths. The scheme will be expanded nationwide in 2010, and in 2011 the government and councils will begin local pilots to extend the scheme to cover changes of address.
• To establish a set of “common protocols” and review the legal framework that governs how public services exchange information, in order to improve services’ ability to “join up”.
• To alter the Directgov website so that it “will champion citizens’ perspectives to help departments to design and deliver excellent digital services.” The site will also carry key public consultations and draft legislation, offering “interactive dialogue” tools so that the public can comment on proposals.
• To release far more government data for free reuse. Data will be available via the single access point of www.data.gov.uk, which will formally go live in January 2010 with over 1100 central government datasets.
• To make use of new forms of communication wherever possible, using text messages, online applications and social networking sites to improve service quality and efficiency. Plans will be set out in departmental channel strategies by March 2010.