Prime minister Gordon Brown announced in a speech this morning that two new bodies will work with the public sector to drive forward his vision of a " digital economy".
Brown said that both organisations will transform how public services are delivered over the internet, and make them more accessible to citizens.
Improving the way the public sector communicates over the internet will dramatically cut the sector's operational costs and lead to improved democracy, according to the prime minister.
An Institute of Web Science will work with the government and business "to realise the social and economic benefits of advances in the web", Brown said.
The institute will receive £30m from the government for research and will be headed up by Sir Tim Berners-Lee, inventor of the World Wide Web and the developer behind data.gov.uk, a web site launched in January to open up public data.
Additionally, Brown said that he will establish a new digital public service unit at the heart of the Cabinet Office, which will be headed up by Martha Lane Fox, the UK's digital inclusion champion.
"The unit will be charged with ensuring that departments achieve rapid progress on transferring and transforming services to online channels," Brown said.
He added that government web sites have to be made more efficient to meet people's needs, and that new standards of quality will be set, such as a requirement that they allow feedback and engagement. Some 900 unnecessary government web sites have already been closed and another 500 will be cut soon, Brown said.
Brown went on to say that the first generation of e-government is to be replaced by a more interactive second generation called Mygov.
"Mygov marks the end of the 'one size fits all', 'man from the ministry knows best' approach to public services," said Brown.
"Mygov will give people a simple 'dashboard' to manage their pensions, tax credits or child benefits, pay their council tax, fix their doctor or hospital appointment and control their own treatment, apply for the schools of their choice and communicate with their children's teachers, or get a new passport or driving licence, all available when and where they need it."
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