Monthly Reports

PRIME MINISTER

Report from the e-Minister and acting e-Envoy - 31 July 2000

This is our seventh report to you on progress towards the Government’s goal of developing the UK as the best place in the world for e-commerce, and the last before our first annual report in September. This report gives an overview of developments since our last report.

As before, the report is structured around the work in hand to deliver the modern markets, confident people and businesses, world class supply sector and leading edge government which the UK needs to succeed. Relevant to all these areas was the announcement by the Chancellor on 18 July of the results of the Spending Review. The Chancellor said that ‘the newest and most decisive challenge in the new century, demanding higher levels of investment, is to master and lead in the new information technologies from the Internet to e-commerce’. He announced that the Review has agreed a three year programme of rapidly rising investment in schools and communities; as well as a new fund to ensure that, by 2005, we will be able to offer all Government services online. He also announced that further limited sales of spectrum will take place by the end of 2001 and that all the capital proceeds will go towards additional reductions in the burden of debt. Further details of the Spending Review expenditure plans for the Knowledge Economy will be set out in our first annual report to be published in September.

Reports from Scotland and Northern Ireland are also included. A more detailed report on progress against each of the 60 commitments in our e-commerce strategy, e-commerce@its.best.uk, is attached. Of the 60 commitments 24 have been completed, 8 are behind schedule and 28 are on track.

a) Modern markets : getting the market framework right

Communications

Our drive to create more competition in the UK communications market was enhanced in July by the following three actions:

• Progress in the timetable for local loop unbundling (LLU). This month OFTEL announced its intention to bring BT’s licence condition on LLU into effect in August 2000. This will give OFTEL powers to act if problems occur. LLU will enable other telecommunications companies to place their digital subscriber line equipment into BT’s local exchanges - allowing them to offer high speed Internet access to their customers

• Publication, on 12 July, of a draft Regulation on LLU by the European Commission. This sets a target of 31 December 2000 for the availability of unbundled local loops. The Regulation is subject to approval by the Council and European Parliament. The UK will be seeking a Regulation which is practicable and achievable - to avoid delay through legal disputes. Our ultimate target continues to be completion of the delivery of widespread unbundled local loops by mid-2001 at the latest. The current timetable already envisages there will be limited availability of loops from 1 January 2000. OFTEL has consistently said it would support the earliest practicable availability of unbundled loops, even if on a limited scale, as LLU roll-out is progressed
• Publication of the access charges to be paid by Indirect Access operators to Vodafone and BT Cellnet for use of their networks. This will open up the mobile telephone market by allowing customers to choose alternative suppliers for the delivery of their calls.

Regulatory

The UK took a significant step forward into the information age on 25 July - when Section 7 of the Electronic Communications Act came into force. This means that electronic signatures, and any certificate which supports them, can be used as evidence in court in much the same way as a hand-written signature. The UK is one of the first countries in the world to pass legislation in this area

In keeping with our intention to ensure that the UK develops a world class content sector, on 13 July, Chris Smith announced changes to the rules on digital TV ownership. These will ease restrictions on holding multiplex television licences and abolish the ‘digital points’ system that currently limits a licence holder from providing programme services constituting any more than a quarter of the total number of ‘points’ attributable to programme services on digital terrestrial television.

Our commitment to maintaining a competitive and up-to-date legal framework for business in Great Britain was reinforced in July when Royal Assent was given to the Limited Liability Partnerships Act 2000. The Act introduces a new corporate entity which will allow members to limit their liability, while organising themselves internally as a partnership.

The Regulation of Investigatory Powers Bill received Royal Assent on 28 July. A number of significant amendments were made to the Bill in the House of Lords and accepted by the Commons on 26 July. The amendments, specifically designed to allay industry concerns about the powers contained in the Bill to demand keys to decrypt data, were as follows:

• greater prominence placed on the face of the Bill to the disclosure of plain text rather than a decryption key;
• clarification that even where keys are required, it is up to the keyholder to choose which key to hand over (if there is a choice);
• a requirement placed that if a key is being asked for, consideration must be given to the extent and nature of other material protected by that key; and
• a statutory duty added that disclosed keys are to be stored in a secure manner.

We have also undertaken to set aside £20m over three years to ease the burden upon communication service providers of developing the capability for the lawful interception of Internet Protocol communications. Some money will, exceptionally, be available to service providers requiring help with the installation of an intercept capability due to new technology. Most service providers will not face a requirement to install a capability and in practice, where a requirement is made, the smaller the company the greater the proportion of their costs we will meet.

International

In driving forward the international information age agenda, you attended the G8 Summit in Kyushu/Okinawa at which the Okinawa Charter on the Global Information Society was agreed. The main message of the charter is about ensuring that all countries benefit from the economic and social advantages that ICT can offer and about bridging the digital divide, both within countries and between the developed and developing world. We made substantial input to the drafting of the charter and are generally happy with the outcome - as it gives a high level political push to a number of our key objectives.

b) Confident people and businesses

Helping Businesses

As part of our effort to encourage small businesses to get online, on 12 July Patricia announced the winner of the ISI/Interforum e-Commerce Awards. The awards are intended to recognise and reward best practice of e-commerce amongst companies with fewer than 250 employees throughout the UK. The winner, DGC Distribution, is dedicated to wholesale distribution of musical instruments.

On 5 July, Stephen Byers unveiled proposals to help innovative, knowledge-intensive businesses, with no tangible assets behind them, to secure finance. The consultation document ‘Knowledge Funding’ asks for contributions to options for establishing a knowledge bank by 30 September 2000.

Helping People

On 10 July, the Office of National Statistics released figures showing that the number of households online has doubled in the last year. An average of 6.5 million households (25 per cent of all households) in the UK can now access the Internet from a home computer. The figures also revealed wide variations in home Internet access between income groups and regions, which we will need to continue addressing.

On 11 July, a consultation paper from the Foresight e-commerce task-force was published, giving a vision of the likely impact of the information age on our lives in 2010.

On 7 July, David Blunkett announced the creation of a ‘Virtual College’ for Headteachers. This will enable them to quiz international experts and take part in online masterclasses through the virtual arm of the National College for School Leadership.

On 18 July, Patricia launched TrustUK (www.trustuk.org.uk), which will approve codes of conduct for e-commerce traders to make sure that they provide good protection for online shoppers. TrustUK is making great progress towards raising the confidence of consumers who shop online. The first online codes have been approved and websites are beginning to display the TrustUK hallmark, indicating to consumers that they can shop safely. TrustUK has generated a great deal of interest internationally and encouraged others to adopt similar self-regulatory approaches to e-commerce. This is a good start for TrustUK. It now needs to build on recent successes by developing its own marketing and its longer-term business plan - particularly concerning the approval of further codes.

c) World Class Supply Sector

The Government demonstrated its commitment to developing the UK’s science base when, on 5 July, the Chancellor announced the creation of a £1 billion science partnership between the Government and the Wellcome Trust. This will allow investment in buildings, laboratories and equipment, as well as funding for new science and engineering postgraduate students.

And, on 14 July, Lord Sainsbury announced a boost of £2.7 million for research and development. He announced eight projects that are to receive funding in the latest round of the ‘Eureka’ initiative. The projects include a software package to help search and analyse large databases.

d) e-government: exploiting ICT to transform public services

On 12 July, Ian McCartney announced that one-third of all Government services are now available online - with the figure set to rise to nearly 75% by 2002.

On 11 July, a Report, prepared by the Central IT Unit of the Cabinet Office, was published in support of the development of Information Age Government. It sets out the findings of an international e-government benchmarking study which has focused on the development of services, targets and the lessons learned from the implementation of services.

On 25 July, Alex launched a new section on the e-Envoy website (the eStatMap) to provide high-quality statistics charting the progress of e-commerce in the UK. The site looks at the readiness for the information age of individuals, business and government in the UK.

Government use of the Internet

On 7 July, the Cabinet Office selected a consortium headed by Cable and Wireless as preferred bidder for the ‘Knowledge Network’. The Knowledge Network will create a Government-wide, 24 hour electronic ‘one stop shop’ for policy briefing and for facts and figures on agreed policy. When complete, the Knowledge Network will be made available to all through the Internet.

On 13 July, Alex launched a new ‘toolkit’ designed to boost IT skills in central Government. Through a series of questions, it allows Government departments to assess the level of skills currently available to them, and to identify where further development is needed to deliver their e-business strategies.

On 20 July, Alan Milburn launched a report on ‘Maximising Value for Money’. The report identifies an approach that can be adapted by all public sector organisations, including the NHS, to improve the planning and execution of large projects such as IT or building projects to obtain better value for money.

On 21 July, John Spellar announced that the MoD had signed a contract with Cap Gemini Ernst & Young to supply the Defence Electronic Commerce Service (DECS). DECS will be the MOD's single electronic gateway to its trading partners and it will deliver a wide range of new electronic business solutions, which will revolutionise the way the MOD does business.

Electronic Services

On 27 July, Alan Milburn presented the NHS plan to Parliament. This pledged that the NHS will have the most up-to-date information technology systems to deliver services faster and more conveniently for patients. As a result there will be:

• electronic booking of appointments for patient treatment by 2005
• access to electronic personal medical records for patients by 2004
• electronic prescribing of medicines by 2004
• all GP practices connected to NHSnet by 2002,
• telemedicine facilities for all local health services by 2005.
• For NHS staff:
• easy access to up-to-date and accurate information on patients’ medical histories
• ability to order tests, refer patients and make appointments electronically
• electronic access to state-of-the-art information on latest treatments and best practice through the National Electronic Library for Health
• better monitoring of local performance and practices against national standards and performance indicators.

On 14 July, the NHS announced that, by the end of this year, all local NHS organisations will be required to publish information on the Internet about the performance of their local health and social care services. They will also be required to provide user-friendly information on accessing local GPs, pharmacists, dentists, opticians, social services and key voluntary services.

On 17 July, the Inland Revenue announced that it was now publishing its main internal operational manuals on its website. This means that taxpayers, accountants, lawyers, academics and other tax professionals will now be able to access an electronic version of this material directly, free of charge, for the first time.

The e-filing service for self-assessment tax returns went online on 3 July. The Inland Revenue had received 6,000 returns by 28 July 2000, with between 300 and 400 Internet returns now arriving every day.

On 17 July, MAFF announced that applications for export health certificates for animals and animal products can now be completed and submitted on-line.

On 19 July, the Lord Chancellor announced the national launch of the National Land Information Service (NLIS). A preferred bidder was announced to develop ‘the Hub’- a gateway which will give electronic access to a vast array of property information, from a range of sources, at the click of a button. Using NLIS, the searches necessary to complete the conveyancing process could take minutes not weeks.

e) Devolved Administrations

Scottish Parliament

In Scotland, Jack McConnell, Minister for Finance, announced on 10 July that nearly 50 projects of the 104 that had applied to the Modernising Government Fund had been given initial approval. The £25 million fund is being made available to public sector bodies throughout Scotland to help them create efficient and responsive public services fit for the needs of citizens at the beginning of the 21^st century. Those projects that best demonstrate benefits to users, and more joined-up working and significant potential savings have been given priority. The selected bidders must now work up their proposals by 29 September and the successful projects will be announced in the autumn.

Northern Ireland Information Age Initiative

On 28 June Sir Reg Empey MLA, Minister for Enterprise, Trade and Investment received a briefing from the Northern Ireland Information Age Initiative’s Chairman, Professor Fabian Monds. This opportunity was used to announce that the IAI’s call for e-projects resulted in almost 100 local organisations and businesses showing their readiness to leapfrog into the Information Age by submitting proposals to extend the use and development of Information and Communication Technologies (ICTs) in Northern Ireland. The projects are currently being prioritised and assessed.

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