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E-government will cost more than it saves

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Kablenet has released researech for the GC2003 conference that suggests e-Government will cost more than it saves
“Plotting the e-investment against the increase in savings over the coming years shows, that on an annual basis, the savings may match the costs only by financial year 2012,” says Karen Swinden, Kable’s Head of Forecasting.
“Even this projection could prove to be optimistic. Unlike the private sector, the public sector cannot maximise savings from digitisation by dramatically cutting physical access to services and staff numbers, as it has a duty to ensure equal access those on the wrong side of the ‘digital divide’.
“This means that in many cases parallel physical and digital processes have to be maintained, to a far greater extent than in private sector areas such as insurance or banking. And this is costly.
The report estimates that between 2001-02 and 2005-06 e-government (see definition below) will cost UK taxpayers �7.4bn. Local government will spend just under �3bn, while central government will spend �4.4bn. On an annual basis, spending will peak in 2003-04 at �1.8bn, falling to �1.2bn in 2005-06.

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