The government has hailed the "huge progress" made in promoting effective use of the internet in Britain.

Launching the UK online second annual report, trade and industry secretary Patricia Hewitt and e-envoy Andrew Pinder said they were determined to ensure that Britain remains at the forefront of the "knowledge economy".

The report pointed to the government's achievements over the last year, including establishing over 2000 UK online centres in local communities with most offering free or low-cost access to the internet and training for those who need it, the development of the "government gateway" website, and the passage of the Electronic Communications Bill.

The government's aim is to get all government services online by 2005. The latest figures show that over half its services are now available online, with departments predicting that by 2002 almost three quarters of services will be available.

The report says the government will need to "re-engineer" departmental business processes, develop a cross-government knowledge management system, and continue to drive forward e-procurement and e-tendering to meet its online ambitions.

"We must re-engineer government around the needs of citizens and business users. All government departments are required to demonstrate that customer consultation and segmentation strategies are driving the services they provide," says the report.

Over the next 12 months the government plans to roll out a number of new online services, including booking and confirming driving tests electronically, claiming Child Benefit online and creating a globally competitive internet-based higher education provider in a joint venture between the higher education sector and private sector partners.

And to tackle the problems of an "information divide" between those with access and those without, the government is also to consider the costs and benefits of offering those with low incomes the opportunity to lease internet access devices.

Patricia Hewitt said businesses, voluntary organisations, community groups and citizens were all now taking advantage of the knowledge economy.

"Two years ago the prime minister said that British industry needed to be ambitious in responding to the challenge of e-commerce, that government needed to put in place the right framework and lead by example and the British people needed to have the confidence and skills to exploit the opportunities. All this is happening - and more," she said.

Andrew Pinder said there would be more developments to come.

"We are working on a programme to add new media and channels to UKonline.gov.uk. Work has already started on Digital TV, WAP phones and kiosks and we will continue until we have universal and inclusive access for all citizens.

"We will be focussing on the services citizens and businesses want and need to use. Online services need to be user-friendly, clear and straightforward, so we are building on existing guidelines to establish mandatory standards for online government services, including easy navigation and simple transactions," said Pinder.

Public access

Accessing government services and information through the internet are becoming increasingly popular as more and more people gain internet access. Britain now has the highest internet use in Europe, with 51 per cent of the people in the UK regularly logging on.

The key UKonline.gov.uk website now receives over one million hits per week and has more 33,000 registered users. The government gateway site also has a further 178,000 registered users.

The government pointed to a study in May by the Economist Intelligence Unit on e-readiness rankings, which ranked the UK second in the G7, as proof of its successes.

However, a Eurobarometer survey conducted in February found the UK lagging behind other European countries such as the Netherlands, Finland and Greece for the proportion of internet users finding or downloading government information online. Britain also lagged behind the European Union average for the percentage of internet users visiting government sites.

The improve public awareness, the annual report points to the continuing online branding campaign, which started last month. The Office of the e-Envoy is to review the campaign's impact and work to raise awareness of all government internet access initiatives by integrating them into one UK online-branded programme.

Improved websites

To attract visitors to its site, the government will continue to develop its site around "life episodes" designed to relate to the way people live rather than how the government is organised. The site will also take advantage of developments in the broadband infrastructure to provide "ever more compelling content".

The government is also set to develop its gateway site, allowing bills from government departments to be paid online and the ability to request downloads of documents such as tax statements.

"As we tightly couple UKonline.gov.uk with the government gateway, our piece of national infrastructure will truly live up to the vision of joined-up government," pledges the report.

Online voting

With levels of turnout at the last election still a concern for politicians, the government is also looking at the potential for e-voting.

The government has commissioned a research project examining the practical requirements for the implementation of remote electronic voting. The research is examining public attitudes to online voting, levels of readiness in local authorities, technological options and legal issues.

The Office of the e-Envoy is also leading an international committee of governments and industry to develop international technical standards for e-voting.

Regulation

The government says it will continue to monitor whether red tape is hindering effective use of the internet.

Section eight of the Electronic Communications Act gives the government powers for the electronic delivery of services and the removal of statutory barriers to e-commerce. "The government should identify where regulatory regimes may need to be modernised to ensure that they remain relevant to changes brought about by the Internet," says the report.

Infrastructure security

With concern over the security of critical national infrastructure sites heightened since the events of September 11, the report says the government will expand "as resources permit" the Outreach Programme with owners of systems supporting critical services in the private sector and in government.

The government will also continue to promote international co-operation on security issues and warn owners of critical national infrastructure of any threats.