Good afternoon, ladies and gentlemen.

I know you have just enjoyed a splendid buffet lunch, but the thought I want to leave with you today is of pie and chips.

No, I am not revealing the menu for this evening’s annual dinner. Rather I want to give you an image that will convey what is at the core of Modernising Government.

Of course I don’t need to tell you about microchips, they are at the heart of your business. But they are also at the heart of the Information Age agenda, and as technology will provide some of the delivery mechanisms for new and better public services.

And the pie? That’s a useful acronym for the key philosophies that underpin modernising government, electronic government, twenty-first century government: Partnership, Innovation and Excellence.

Whenever there is a discussion of electronic service delivery you are likely to hear the catch phrase "joined up government". This is essentially about providing information to government once, rather than several times to different departments in different places. It is about having a single point of access for the services you require, rather than contacting half a dozen different offices.

Joined up government is all about partnership. Partnership between different government departments, sharing information and co-operating in the way they serve the public, also between local and central government.

The average businessman or citizen is not interested in the different tiers of public administration or the complexities of public funding and lines of accountability. All he or she wants is to complete their transactions as quickly and as easily as possible.

Joined up government is about partnership between the private and public sectors, to allow for transactions to be just that.

In May the Cabinet Office published a review of major Government IT projects, "Successful IT: Modernising Government in Action". This document is of fundamental importance both to government and the Civil Service and to all suppliers who do business with the public sector.

This review makes it clear that the Government’s agenda for radical change cannot be delivered by the public sector alone. You, the suppliers, have a major role to play in helping us, government, to realise the vision. Together, we can make e-government a reality. But if the relationship between us is poor, an improved approach will be impossible. And that is in nobody’s interest.

This government has always recognised the importance of partnerships with the private sector. In November 1998 we established the Industry Consultative Body, as a forum for suppliers to share their ideas on how to take forward the Modernising Government agenda. Amongst the participants are two members of the CSF, Hewlett Packard and IBM.

More recently, we have published the "E-Government Strategy", another crucial cornerstone of the Modernising Government programme. This strategy was developed in consultation with colleagues in the ICT industry because the industry’s role is fundamental to the success of the strategy.

In particular we see three key areas in which we need the private sector to help us realise the strategy:

• Delivering public services, either directly or alongside departments;
• Acting as "incubators" to nurture best practice and support for departments; and

• Working with government to provide the infrastructure and services within and between departments.

And it is essential that we develop good partnerships in the area of procurement. I am well aware that in the past there have been unhappy experiences on both sides. Too often ICT procurements have been battlegrounds fought over pricing, with suppliers complaining about requirements that are poorly defined and frequently changing, whilst purchasers complain about missed deadlines and unexpected extra costs. But I am determined that such incidents, such confrontational approaches to contract negotiations, should stay in the past.

For our part, we must ensure that we evaluate suppliers’ proposals on the basis of true value for money – taking into account deliverability, flexibility and risk. We must avoid the perception that government’s only selection criterion is price!

For your part, we need you to bid realistically. You should propose solutions that you can deliver for the price quoted. Partnership does not mean loose contract management, we will keep you to your commitments. But they must be achievable, and if we believe they are not, you will not get the business. This way we avoid many of the conflicts which have plagued government IT contracts in the past.

For the future we want to encourage co-operation between suppliers and clients. We want to build mechanisms that strengthen mutual understanding and support. In particular we want to focus on developing a common understanding of the outcomes desired from procurement, on the business benefits, rather than on the finer points of functional specifications.

This is absolutely essential because it gives scope for innovation.

Information Age Government is not simply about automating the same old things that we have always done. Nor is it simply about providing the same services using electronic and interactive delivery mechanisms. It’s about nothing less than the radical transformation of society, the radical transformation of government.

It means that we, in government, need to ask fundamental questions about: What we do, Why we do it and How we do it.

It means we need to challenge traditional assumptions and procedures to find ways of delivering the things that businesses and citizens want, when they want them, and in ways they can use quickly and easily.

It means we need to innovate.

We need to innovate in the delivery mechanisms we use. Instead of offices, traditional telephones, and post, we must exploit the potential of

• The Internet;
• Digital television;
• Mobile ‘phones; and
• Call centres.

We need to innovate in the way we design services, so that whoever deals with an enquiry can access information on the customer, and provide the answers they need, regardless of where that official works. Indeed, we should be able to design systems so that all routine enquiries and transactions can be handled automatically, leaving officials to concentrate on the complex and unusual cases.

We need to innovate in the way we design and develop information systems. The important characteristics will be flexibility and responsiveness.

Indeed, the "Successful IT" report recommends that we stop thinking in terms of IT projects altogether. Rather we should be developing systems and projects that deliver business benefits. Technology will be an inherent and integral feature of such initiatives, but it will not be either a separate add on nor an independent driver of change.

This radically different philosophy has two clear and immediate benefits. Firstly, it helps us to concentrate on complete business change rather than simply introducing new computer systems.

Secondly, it moves us away from the massive monolithic computer projects that have so often run into difficulties.

One of the key recommendations of "Successful IT" is that departments and agencies must adopt a modular and incremental approach to projects. This will make those projects more manageable and it will reduce the risk of failure. Any difficulties will be identified earlier and can be corrected more quickly. To use a maritime analogy, if a change of tack is needed it is far easier to turn a small motor boat than an ocean liner.

And in this there is a benefit to those of you who represent small and medium sized enterprises. I know that smaller companies are discouraged from bidding for multi-million pound IT projects. The costs are high. The risks are high.

With a modular and incremental approach the bidding costs and the overall risks are reduced. The opportunities are increased. And the prizes are attainable to all, not just the multinationals. Contracts for e-government work won’t just go to the biggest, the richest, and the strongest. They will go to the best.

Because the third strand of our philosophy for Information Age Government is excellence.

First and foremost we must have excellent public services. What we offer to the public and to business must be of the very highest quality. That means those services must meet their needs and they must be accurate and useful.

Secondly, we must have excellent delivery of services. What we provide must be accessible, twenty-four hours a day, seven days a week, where there is demand. It must be easy to use. And it must be timely.

Thirdly, we must have excellent systems to support service delivery. Innovation must never come at a cost to quality. The systems we use must be robust, reliable and flexible. The information they contain must be accurate, relevant and up-to-date. Above all, they must deliver the expected benefits, both to the client business and to the supplier. This is the benchmark. Projects and programmes can only be regarded as successful if the intended benefits are realised.

From this it follows that we need excellence in systems development. As I have indicated, we want an end to protracted negotiations defining the number of cyber angels required to dance on a virtual pin head; an end to project delays and budget explosions. Our systems must be delivered on time and in budget. And again this is where the modular and incremental approach will help.

But what is more important is that the management of these projects is excellent. We need realistic plans, shared information about the status of projects, and good communications between all parts of the project teams. That means openness and honesty, which can only come from mutual trust and co-operation; from partnership between supplier and client.

Finally, we need excellence in our staff, both within government and within the supply industry.

For our part, we expect key staff on major projects to undertake formal project management training. Through the Central IT Unit we are developing an ICT skills framework based on the Skills Framework for the Information Age, which has been developed by the IT National Training Organisation. As this model is publicly available it is one that you may wish to look at when developing your own staff.

All of this will help to identify the skills we need and the extent to which we already have them. We also need to encourage our staff to continue their personal development to keep their skills at the leading edge. To help them the Central IT Unit and the Centre for Management and Policy Studies will develop processes to facilitate ongoing assessment of skills.

Six months ago the media were in a frenzy over e-business. El-Dorado came with a dot-com. Now that the overhyped bubble has burst, the same media are writing premature obituaries.

In government we were not fooled by the hype, nor are we discouraged by the current despondency. E-business and e-government are not going to go away, but neither do they offer immediate and simple solutions. They need carefully planning and imaginative thinking. They need a set of policies and procedures that are clear, yet flexible. They need leaders – in business and government - who have the courage to be radical and the wisdom to focus on delivering benefits. Above all they need Partnership, Innovation and Excellence.

This afternoon I have given you a taste of how we see the vision of electronic government being realised. For more of a recipe I commend to you the two crucial documents I have already mentioned:

• The e-government strategy; and
• The "Successful IT" report.

In particular, the latter contains an Action Plan for suppliers which shows how you can help us to turn vision into reality.

Together, in partnership, we can revolutionise public services by using innovative approaches to deliver excellence to the public.

Thank you.