Budget cuts shrink role of Mandelson's internet 'envoy'

The Government's information technology supremo is to have his empire drastically shrunk as part of a shake-up in the Cabinet Office.

The Office of the e-Envoy, which was formed in 1998 to lead the Government's move into the digital age, is to have at least a quarter of its £20m annual budget cut.

The post, endorsed by Peter Mandelson when he was Trade and Industry Secretary, is to be downgraded to a "small unit" as it struggles to meet its target to put all government services online by 2005.

The position, occupied by Andrew Pinder, will have less power and a "more streamlined focus", government sources said. "He will be a galvanising figure, a champion, rather than forming policy," one source said.

Many of the e-Envoy's team of 200 will be given other jobs in the biggest overhaul since the post was created, leaving "a very basic staff".

Ministers believe the post overlaps with IT work within their own departments. Government departments have told Andrew Turnbull, the Cabinet Secretary, that they believe the e-Envoy has not been providing value for money.

Mr Mandelson was said to have borrowed the idea from the United States, where Ira Magaziner was chief internet policy adviser to Bill Clinton.

The UK post was supposed to deal with internet policy across government. But Whitehall sources said it was outdated because each government department had its own IT unit. Responsibility for introducing broadband, the internet connection that is about 10 times faster than a dial-up modem, has recently been transferred to the Department of Trade and Industry.

Mr Turnbull will face questioning next week from the Commons' Public Administration Select Committee about the relevance of the e-Envoy.

Mr Pinder, a veteran IT executive at the Inland Revenue and Citibank, took over as e-Envoy at the end of 2000, initially as a stand-in and formally in January 2001.

He denied the cuts would affect his ability to direct government IT strategy. "I am personally completely confident that I will have adequate resources to do my job," he said. "The Office of the e-Envoy will continue to campaign and co-ordinate the UK's drive to become the world's leading knowledge economy, and remains dedicated to getting government services available online with a high take-up."

The Cabinet Office is understood to have gone "cap in hand" to the Treasury for cash to keep the e-Envoy's office going."It's the annual budgetary process and we are not making an announcement until that is completed," a Cabinet Office spokesman said. "Any changes will be announced in due course."

The Government appears to be on the verge of abandoning its target to get all government services on the internet by 2005 so that people can book a hospital appointment or even apply for a fishing licence on line. "There's a perception that this target may not be reached or may not be desirable," said Richard Allan, the Liberal Democrats' information technology spokesman.

Observers have also cast doubt on whether the Government has hit its target of making Britain "the best place in the world for e-commerce" by December 2002. Ministers have been beset by costly computer failures at the passport agency, the Criminal Records Bureau and the Child Support Agency.

The Government's IT advisers found that websites were failing to attract people who would benefit most because they were so badly designed.

The IT consulting firm Hedra found that less than 3 per cent of people regularly used an official website to find out about government services. Only one Briton in three has visited an official website, although two-thirds have internet access.