Chapter 35

Cross-Departmental Review of the knowledge economy

Scope

This review considered how best to develop Britain's knowledge economy and move towards the Government's goals of making Britain the best country for e-commerce by 2002; putting all government services on-line by 2005; and achieving universal access to the Internet by 2005. The main focus was on information age government, promoting Information Communication Technology (ICT) skills throughout the economy, and the promotion of the knowledge economy.

Background

35.1 New technologies offer unprecedented opportunities for modernisation throughout government. Industries and organisations are being revolutionised in response to the challenges of the digital age. Government must do the same if it is to realise the potential efficiency gains on offer, and provide the higher quality services that are now possible. The Prime Minister has set a target for all government services to be on-line by 2005.

35.2 The Government must also ensure that its own behaviour supports and promotes the knowledge economy. Moving towards greater electronic procurement and tendering offers significant potential efficiency gains, but will also have a profound effect on the behaviour of firms - both large and small. Government also has a key role to play by allowing its large information resource to be fully exploited. Information is the fuel of the knowledge economy; and the ability of new technologies to create synergies between different kinds of information is at the heart of the Internet revolution.

35.3 The Government is already doing a great deal to promote access to the Internet. The Government is implementing the national IT strategy, putting schools and libraries on-line, and is investing in ICT learning centres. Together with market developments, in particular Internet access through mobile appliances and digital TV, this should go a long way towards delivering universal access to the Internet. However, further steps are required to avoid a digital divide emerging.

Outcomes

Information age government

35.4 As the largest agent in the economy, Government has a unique role to play in promoting the knowledge economy. To ensure the Government plays its part in making the UK the best place for businesses and citizens to be on-line:

there will be substantial investment to ensure all government services are on-line by 2005, initially focused on priority projects such as tax returns and driving licence applications. There will be a central funding stream to support selected priority services when plans to go on-line are fully developed, as well as innovative opportunities which arise outside standard departmental remits;
there will be new targets for electronic tendering. By 2001, 50 per cent of central government civil tenders will be sent and received electronically; by 2002 all such tenders will be sent and received electronically. This builds on the existing electronic procurement target that 90 per cent of low value purchases will be undertaken electronically by April 2001; and
there will be a simplified system of pricing and licensing for government information. Government Trading Funds which trade information will improve their pricing and dissemination polices.

Universal access

35.5 Everyone must be in a position to benefit from the new opportunities arising in the knowledge economy. The Government is giving people the chance to access these new technologies through ICT learning centres and putting schools and libraries on-line. Building on this, new resources have been allocated to encourage the development of new initiatives for post offices to provide people with new opportunities to use and learn about the Internet, in particular the most vulnerable in society.

35.6 Key to the future competitiveness of the UK, and preventing the emergence of a digital divide, is ensuring that everyone has the opportunity to gain the ICT skills they need. As a cornerstone of this goal, the Department for Education and Employment (DfEE) has set a target on ICT test results at age 14 (this and other key PSA targets arising from this cross-departmental review are set out in Box 35.1).

35.7 In order to achieve this goal, and promote ICT skills throughout the economy, DfEE will be committing a sizeable element of its capital provision to promote ICT skills through a range of projects (such as decreasing the number of pupils per PC and extending the Wiring Up Communities pilots. In addition, the Department of Trade and Industry has been allocated new resources over the next two years to promote ICT skills and e-commerce amongst Small and Medium Enterprises (SMEs).

Box 35.1: Key PSA targets - knowledge economy

The Cabinet Office PSA will have a high level target to ensure departments meet the Prime Minister's targets for electronic service delivery: 25 per cent capability by 2002 and 100 per cent capability by 2005.
The PSAs for Customs & Excise and Inland Revenue will contain targets to ensure that by 2005 100 per cent of services are offered electronically, wherever possible through a common Government portal, and a take-up for these services of at least 50 per cent.
The DfEE PSA includes a target subject to consultation that the percentage of 14 year olds at or above the standard of ICT skills for their age should increase so that, by 2007, 85 per cent will achieve level 5 in the Key Stage 3 test; as a milestone towards that target, 75 per cent should achieve that level by 2004.

Spending plans

35.8 Departmental settlements include significant additional provision over the next three years to put Government services on-line and to support universal access.