At the local government level, where a significant number of citizen-to-government transactions occur, eGovernment can be as much a barrier as it can be an enabler for citizen access to information and services. Municipal councils need to ensure that they are effective in delivering the services that are transferred to the electronic domain. As local governments increasingly turn to ESD, it is essential that they put in place performance measurement processes that ensure that they are effectively in achieving their desired aim. Public accountability particularly for more efficient and effective service delivery requires performance measures incorporating both financial and non-financial elements. The substantial reforms to the local government sector, however, brings with it a risk that councils will turn to eGovernment with the primary aim of reducing internal costs. This research examines the progress local governments in Victoria, Australia have made towards utilising the Internet to enhance the delivery of services and the methods they use to measure performance. Using a case study of two councils, the research found that councils concentrate more on the cost benefits of ESD rather than on the quality or effectiveness of the service. It also found that council staff do not incorporate on-going evaluative processes in changes to ESD. Moreover, it found that staff are often reluctant to undertake internally initiated reviews, and often rely on easily quantifiable measures such as hits or visits as justification for ESD.