Introduction 11 Where does the uk stand now? 13

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UK online

Annual Report

Summary 2

Introduction 11

Where does the UK stand now? 13

Agenda for change 19

Devolved administrations 20

Modern markets: getting the market framework right 27

Confident people 34

Successful businesses 40

Getting government online 45

World class supply 54

Leadership and coordination 59

Measuring success 61

Partners 68

Sign-off of 70

Glossary of terms and acronyms 74

Notes 78


UK online - success for all in the knowledge economy

Information and communication technologies are transforming economies and societies around the world. The UK has the capability to be a global leader in this new knowledge economy, bringing wealth and new opportunity for all of us.

That is why the Government, industry, the voluntary sector, trades unions and consumer groups have come together to deliver UK online: a major initiative to ensure that everyone in the UK who wants it will have access to the Internet, and to make the UK one of the world’s leading knowledge economies.

This - the first in a series of annual UK online reports - sets out our plans for making it happen. Both by acting now, and by laying out a detailed strategy for the future.

UK online: acting now…

Every day, more and more people and businesses around the country are getting online. The Government is investing £3.8 billion to help, of which £2 billion is new money following the Government’s spending review in July 2000. New services will be added later, but the initial core UK online services are:

  1. UK online centres - 600 of these will be set up by March 2001, based wherever best suits the needs of local people. They will provide people with access to new technologies, and help to develop the skills to use them. By the end of 2002, all 4,300 of the UK’s public libraries will be online, funded through the National Lottery New Opportunities Fund. Call Learndirect helpline on 0800 100 900.

  1. UK online for business helping people succeed in online business by offering expert, impartial, jargon-free help and support, available face to face, online and by telephone. Call the UK online for business info line on 0845 715 2000.

If you talk to UK online for business you’ll be able to look at all the implications of starting a website and therefore get it right when you do it. Since we launched our site, sales are up 20% and still rising.”  Drew Patterson, Marketing Director of Skin Culture Ltd.

  1. UK online government services. Already you can access many government services online. Later this year, the UK online citizen portal will offer a single online point of entry to government information and services, 24 hours a day, seven days a week. New services will be added to the UK online citizen portal as the Government works towards meeting its commitment of delivering all of its services electronically by 2005.

. and planning for the future

In September 1999 the Prime Minister published a strategy for e-commerce success in the UK: ‘’. Government, industry and consumer groups have worked hard over the last year to implement the 60 commitments in that report,1 and the benefits are being seen in tangible results such as the new services described above. But to succeed, the UK must continually refresh its strategy in the light of change. The UK online annual report therefore:

  1. benchmarks the UK’s performance against other major countries (see box 1);

  2. sets out an updated strategy for success, with 25 commitments (see box 2) aimed at achieving the UK online strategic goals illustrated below.

Many of the actions set out in this report relate to matters for which the devolved administrations in Scotland, Wales and Northern Ireland are responsible for setting targets and developing and implementing initiatives. Further details of how these are being tackled by the devolved administrations are included in rest of this report.

The full detail of the UK online strategy is available at We will publish monthly reports on progress in implementing the strategy at the same address.

  1. Fourfold increase in online spending (to £2 billion).

Box 1: The UK in the online world

In September 1999, reported that the UK was the leading e-commerce player among the major European countries, but that we lagged behind the United States, Canada, Australia and Scandinavia on key measures of business and consumer e-commerce use. Since then, the UK has seen strong growth, narrowing the gap with the G7 leaders in most areas - and moving into a leading position on some, but not all, measures of Internet access costs.

Significant developments have been:

  1. For Individuals

  2. Number of households on the Internet up from 13% to 25% in one year.

  3. One third of the UK population is now online, more than any other major European country. A 50% increase since September 1999 has brought us closer to the USA, which is still ahead with almost 50% of the population online.

  4. For Businesses

  5. 90% of UK employees now work in businesses which are connected to the Internet - on a par with the US at 93%.

  6. 33% work in UK businesses which engage in online financial transactions with customers or suppliers - a higher proportion than the USA, Sweden, Germany, France, Japan or Canada.

  7. Spending online

  8. Fourfold increase in online spending (to £2 billion).

  9. UK now largest e-commerce market in Europe.

  10. Government online

  11. 33% of Government services now available online.

  12. Cost of Internet access

  13. UK cheapest place in the world for off-peak Internet access.

  14. UK peak-time rates are now below the OECD average - very intensive Internet users pay less than almost anywhere in the world.

  15. IT, electronics and communications (ITEC) sectors

  16. 8% of UK GDP, and one third of GDP growth.

  17. Growing faster than the ITEC sectors in Germany France and Italy, but behind the USA.

For the full benchmarking analysis, see We will be updating this with the most recent research results on a rolling basis at the e-commerce StatMap at

Box 2: The UK online strategy

Modern markets

UK online: the Government’s commitments

Detailed actions

1. Drive forward competition in Internet access markets

Consult on competitiveness of dial-up access to the Internet

Unbundle local loop

Consult on competition for leased lines

Promote rapid uptake of digital interactive TV

Ensure competitive roll-out of 3G mobile telephones

2. Establish a new framework for regulation of the converging markets of telecommunications and broadcasting

Publish White Paper

3. Identify and remove all remaining regulatory and legal barriers to electronic ways of working in the UK

Remove 70% of identified barriers by end 2001, and 100% by end 2002

4. Take action with international partners to develop an effective, light-touch global framework for e-commerce

Implement the e-Europe action plan

Promote adoption internationally of: ‘country of origin’ principle; co-regulatory approach; alternative dispute resolution mechanisms for e-commerce internationally

Press for transparent and liberal e-commerce framework

Take international lead in updating tax regime

Promote information security internationally

Publish White Paper addressing international digital divide

Confident people

UK online: the Government’s commitments

Detailed actions

5. Implement a package of measures to improve access to the Internet at home, at work and in the community

At home:

Encourage employers to provide PCs and Internet access for home use

Encourage low-cost leasing schemes for public sector employees

Low cost recycled PCs for 100,000 low-income families

At work:

Promote benefits to employers of having all employees with Internet access

Government departments to address benefits of access for all staff

In the community:

Establish network of UK online centres

All public libraries to offer Internet access with trained staff to offer support

Pilot new initiatives in post offices to help people access and use the Internet

Pilot access for disadvantaged communities

6. Embed information and communication technology (ICT) skills in the education system and throughout lifelong learning

Education system:

Improve ICT infrastructure in schools, further and higher education

Improve educators' ICT skills

Stimulate high-quality online educational content

Introduce ICT work placement programme for 16+ students

Lifelong learning:

Invest £84m in 2000-01 through Ufi

Offer free ICT ‘taster’ courses to the unemployed

Offer 80% discounts for computer literacy training

Offer high-quality lifelong learning content

7. Work with industry to ensure a safe and secure environment for e-commerce and to help people trust the Internet

Protect children:

Publicise best practice self-protection tips

Safeguard online consumers:

Work with industry to promote the TrustUK hallmark for e-commerce web sites

Draw up ‘Consumer Trust’ standard for use online by government departments

Reduce online fraud:

Encourage credit card industry to establish online address verification system

Promote tScheme

Combat online criminal activity:

Create advisory body on implementation of ISP interception arrangements

Ensure industry fully consulted on fair contribution to interception costs

Establish a National Hi-tech Crime Unit

Protect online security:

Expand DTI’s promotion to business of information security best practice (BS 7799)

Put information security at the heart of e-government

Ensure protection against attacks on critical national information infrastructure

8. Help increase people’s motivation to access the Internet by driving up the amount and quality of social content

Promote local online content

Explore new ways to stimulate development and availability of high-quality online cultural content

Successful businesses


UK online: the Government’s commitments

Detailed actions

9. Invest an additional £25m over three years to help small businesses exploit the potential of ICT

Boost marketing of UK online for business

Additional advisers for UK online for business front-line

Web-enabled call centre with ‘virtual expert’ support system

Raise awareness of fiscal incentives for small businesses

10. Support industry in improving competitiveness through e-business technologies and processes

Sponsor and disseminate e-business research and analysis:

Publish overview of sectoral impact of e-commerce

Facilitate rapid transfer of e-business expertise between businesses and between sectors

Government online


UK online: the Government’s commitments

Detailed actions

11. Get all government services online

Improve the customer front-end

Join up the back-office systems

Set standards

Improve the organisational capacity of government to deliver electronic services

Champion private and voluntary sector involvement in the delivery of electronic government services

12. Drive forward towards e-procurement and e-tendering targets

Develop coherence and standardisation in e-procurement

Provide advice and guidance on e-procurement systems, tools and techniques

Innovative pilot e-procurement projects

50% e-tendering by 2001

100% e-tendering by 2002

13. Implement a cross-government knowledge management system

Develop four applications

Develop departmental interactivity

Develop change management

Embed Knowledge Network in operational practices

14. Drive forward citizen participation in democracy as part of the UK online citizen portal

Liaise with Home Office and others on online voter registration and online postal vote application

Participation by devolved administrations and local authorities

15. Drive forward the use of authentication services both for e-government services and within government itself

Work with Trusted Service Providers to ensure interoperability with government

Identify suitable security and authentication technologies in the marketplace to support government Electronic Service Delivery targets

Exploit and develop government use of Public Key Infrastructure (PKI)

Define relationship between government PKI and the tScheme

World class supply


UK online: the Government’s commitments

Detailed actions

16. Implement a strategy to make the UK the number one country for the supply of high-level ITEC skills, taking account of the recommendations of ‘Skills for the Information Age’

Invest at least £8m to drive forward the ITEC skills strategy

17. Invest in leading-edge e-science

Ensure businesses maximise benefits from investments in science-based infrastructure

18. Facilitate ITEC knowledge transfer

Incentivise universities to commercialise ITEC research

Facilitate links between the ITEC sector, universities and other sectors of the economy

Review actions needed to facilitate cluster development in the ITEC sector

19. Implement an action plan for growth for the digital content sector, including through liberalised access to government information

Work with industry to implement the action plan, reviewing progress with the Digital Content Forum

Introduce marginal cost pricing for most basic government information, other than Trading Funds

Introduction of class licensing by HMSO

Public information available in digital form

20. Work with industry to develop a UK strategy for m-commerce

Develop a strategy for secure, innovative introduction of m-commerce

Host 3G mobile conference



UK online: the Government’s commitments

Detailed actions

21. Establish new mechanisms to coordinate access and skills initiatives at national, regional and local level

Michael Wills, Parliamentary Under-Secretary of State, DfEE, to take lead in coordinating community-based IT access and skills initiatives at national, regional and local level, working with e-Minister, e-Envoy and DCMS Ministers

Government Offices in England and Wales to coordinate implementation of these initiatives at local and regional level, reporting on progress to the Parliamentary Under-Secretary of State every six months

22. Further develop and implement the UK online campaign

Work with private and voluntary sectors, consumer groups and trade unions to develop the national campaign to get the UK online

Hold a review of the UK online campaign’s impact

Measuring success


UK online: the Government’s commitments

Detailed actions

23. Secure international agreement to a common framework for measuring e-commerce

Complete agreement on a common definition

Agree core set of common questions

24. Improve e-commerce measurement in the UK

Further work required in the following areas:

individual use

business use

government use

ITEC sectors

telecoms/Internet access costs

Work with Information Age Partnership to identify global benchmarks for measuring the UK’s success

25. Implement a programme to evaluate the net economic impact of e-commerce

First economic impact study undertaken

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