I’ve said it here before in a piece entitled ‘Channel accounting’ in 2009 and I’ve stated it in my dissertation, the economics of e-government are far from straightforward. Now studies from the USA, home of the expectation of savings, is revealing that little money and few jobs are saved by e-government. This will be bad news in these times of funding limitations but perhaps the reason why the coalition government in the UK is keeping well away from mentioning it?
Research results from Kent State University indicated that few of those surveyed in the USA think e-government has reduced staff, counter service or overall costs! This may be because, as reported from one county in North Carolina, citizens are not using the online services, but if more did there might be savings. However, as also described, the online services have become important in themselves and create a political problem if there is any failure, so are required to be supported by more reliable, and thus more expensive, servers and equipment. It is also apparent from the article that using different levels of fees to move people away from counter services is still not viable either due to legislation or politics, but obviously the issues in the USA have been similarly recognised in many parts of the UK.
The story from the USA is outlined in the edition of Government Technology of 21 January 2011.
The Great E-mancipator 
I must confess I haven’t read that research but I think the government here is promoting e-government pretty strongly actually. The report by Martha Lane Fox on channel shift proposed moving virtually everything online, and the government mostly went along with her recommendations. I think it’s worth bearing in mind that the money-saving rationale, though very important, is separate to the improving access to public services rationale. Hopefully the two overlap, but as long as online services don’t cost anything extra, they should be available. As you say, as take-up grows, the savings will be realised with any luck. I would point out though that renewing your car tax used to cost DVLA a fortune when done over the counter or by post, transferring to a telephone-based system brought that down and then the online system slashed the cost even more. Check out my blog for thoughts on public sector IT: http://blogs.ts.fujitsu.com/uk-ie/publicsectoroutsourcing
Channel shift will only occur voluntarily if the citizens find the web channel easier and more convenient than the phone and face-to-face (plus there’s an element of trust that only face-to-face satisfies). In many case the web channel represents a poorly designed view of the face-to-face and is buried (in the case of local government) amongst 700+ services – it’s a lot easier for central government (apart from the complex legislation controlling it), but both have that!
Force it all you want, but it has to be better!