Headlines: April 14th, 2005

Local councils in England will spend a total of 3.9 billion pounds on implementing e-government between the financial years 2001-02 and 2007-8, according to new research. The costs rise to more than four billion over the seven-year period if spending by authorities in Scotland and Wales is included.The latest guide from Kable the market intelligence services company – “Implementing Electronic Government 4”- says these figures equate to an average annual spend of 570 million pounds or 26 pounds a year for seven years for each of the nearly 22 million council tax banded households in England. The cost per home is set against the average annual council tax bill this year of just over 950 pounds.

Kable’s new e-government research is based on IEG4 statements from English local authorities’ that set out how each council plans to reach its target to provide all services electronically by the end of this year.

Details in the study show that local authorities have spent the largest portion of the four billion – almost a quarter – in the fiscal year that has just ended, with the next largest sum, 746 million, being spent in the next twelve months. By the following year councils expect their annual spend to have fallen to 324 million pounds.

Kable, which aims to help suppliers to understand public sector ICT market better, says a key issue will be how local authorities continue to support their e-government infrastructure. Though spending is set to drop to the estimated 324 million in 2007-08, Kable says it is unlikely it will fall any further. In fact, the company believes that annual expenditure to support e-government in English authorities may actually increase as most technologies need to be refreshed at least every five years and because of the impact of newly emerging technologies. At the same time funding support from the Office of the Deputy Prime Minister is scheduled to end after 2005-06.

The research finds that most local authorities believe there will be efficiency gains from their investment in e-government and Kable estimates that English councils will release 968 million pounds of cashable savings over the seven-year period. Although annual savings could meet annual investment in e-government by 2006-07 the total investment still outweighs any savings, the research says.