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FEATURES - CONTRACT KILLING ENDS E-GOV DREAM

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E-government is a reality but, with councils lacking confidence and PFI contract talks failing, it may prove short-...
E-government is a reality but, with councils lacking confidence and PFI contract talks failing, it may prove short-lived, say Lewis Williamson and Chris Mahony

Transforming the prime minister's e-government vision into reality is no longer a matter of conjecture, debate or, dare one say it, rhetoric.

A quarter of the council services that can be delivered electronically are supposed to be e-enabled this year. In just three years' time, all relevant services should be available electronically.

But research conducted for the LGC market report: e-government shows

Tony Blair's take on reality is proving elusive for many in local government.

The report reveals 20% of councils believe the 2002 target will be 'difficult to achieve'. While 23% claim they have already hit the initial target, 4% insist this year's deadline will be 'impossible' to meet. A little more encouraging is the fact 53% of councils believe they will hit the target at some time during this year.

But just 9% of councils feel they are 'extremely likely' to achieve 2005's 100% e-government target. The same proportion insist the deadline is simply 'impossible' to meet, while a massive 80% believe the target is only possible with 'extra funding'.

Perhaps more worrying for the government is the fact that few councils feel the e-government targets are even intelligible - just 5% think the targets are clearly defined.

From the point of view of partnerships between councils and the private sector, this lack of clarity is becoming increasingly critical.

The report finds emerging evidence showing the private finance initiative route might not be appropriate for many

e-government partnerships. Already many councils are looking at alternative forms of public/private partnership.

More than four years after Harrow LBC and Unisys signed the first PFI ICT deal, it is clear they were not exactly inciting a revolution. Since October 1997, when Unisys agreed to supply the borough's revenues and benefits service through a£1m PFI deal, the number of contracts of this kind can be counted on one hand.

Worryingly, the report finds evidence of private sector partners becoming wary of PFI contracts due to perceived difficulties in dealing with councils.

One of the factors affecting deals is disagreement between councils and companies over risk, with some councils being accused of having unrealistic expectations of how much risk the private sector should bear.

There are suggestions too many councils seek ultra-tight contracts under which the supplier pays money back to the council as a penalty for not meeting the most minor of criteria.

Failed contracts have been blamed on rapid technology developments and changing economic circumstances.

Contracts which lock parties in for long periods can be hazardous in a world where technical innovation rules, though suppliers are now looking for contracts running for at least 10 years.

The report suggests some people believe the market is shrinking on the supplyside. There are fears a number of suppliers are becoming increasingly selective about whether they do or do not seek a particular tender.

But it is not all bad news. One positive message coming out of the report is, for those councils trailing behind, there is no need to panic. Despite the traditionally scary view of ICT, it is possible to make progress relatively rapidly.

n LGC market report: e-government,£995 (£200 to councils), from Sarah Wightman on 020 7874 0347 or sarah.wightman@lgc.emap.com.

www.lgcnet.com/psmi

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