In the trade, it's called the Shepway problem. A couple of years ago, Shepway district council in south-east Kent received £550,000 from central government to set up an electronic change-of-address service for its residents.
The plan was that when people moved house, they would need to fill in only one online form, rather than separately notifying libraries, council tax, electoral register and other departments of their new details.
Nearly everyone likes the idea. There is one snag: sharing information in this way is illegal. The council was forced to spend a large part of its "pathfinder" grant on lawyers who advised that, even when citizens give permission, councils do not have the legal power to join up databases of personal information. The legal term is "ultra vires". And because the Data Protection Act requires organisations to process data lawfully, any council acting ultra vires could be prosecuted.
Shepway put the service on hold. In its official report, the Office of the Deputy Prime Minister, which funded the project, put a positive spin on the effort, listing "full exploration of legal issues" as one of the project's achievements. However, the citizens of Shepway still don't have a one-stop change of address service. A search on its otherwise fine website www.shepway.gov.uk this week produced only: "Change of address could not be found in the database."
Change of address is not the only service to face data-sharing problems. Wolverhampton city council's pioneering bereavement service, designed to ease the bureacracy of dealing with a death in the family, found it was not allowed to pass on notifications of death to central government departments such as the Inland Revenue. "The legislation is rather long in the tooth," says Wolverhampton's head of IT, Fahri Zihni.
Elsewhere in the world, governments take a more gung-ho view of data sharing. The government of Singapore's e-citizen portal <A HREF="http://www.ecitizen.gov.sg"" TARGET="_NEW">www.ecitizen.gov.sg contains a "change of address" button, which is supposed to notify all government agencies (though this week it threw up an error screen when tested).
However, some local authorities are beginning to grow impatient at what they see as a ridiculous legal barrier. After all, people are unlikely to complain if, when they update their council tax records, the public library is informed as well.
At a conference last week on data sharing organised by the web publication E-Government Bulletin, speakers urged local authorities and central government to be bolder. Jim Norton, a former adviser to the Cabinet Office on e-commerce, said that the govern ment had not explained the potential benefits for citizens. "It is not clear to me what the vision is behind the sharing of information, the case is not made. If it was, people might be surprised at the positive reaction."
Rupert Battcock, of solicitors Nabarro Nathanson, which advised Shepway, said that "some councils are being a little more cautious than they need to be" in interpreting the law.
Central government has been promising to clear up the mess for more than a year. Last spring, the Performance and Innovation Unit called for legal reforms to allow routine sharing of information between and within public agencies. "It's something we are looking at," said the Office of the Deputy Prime Minister.
As part of this process, the Department for Constitutional Affairs will next week publish a document on information-sharing protocols. Officially, this will only contain guidance for the public sector explaining the law as it stands. However, the intention is to explain it in ways that will make it easier for government bodies to share information with the subject's consent.
Moves in this direction risk becoming embroiled in political rows about sharing of information without con sent. There are two reasons why this is topical. First is the plan to set up integrated databases of children to identify cases of mistreatment. Measures to set up child registers are expected in the Queen's speech on November 26. Controversially, these databases may need to contain information about parents and carers - reports of drug and alcohol abuse, for example.
A second measure under discussion is a national population register, being investigated by the Treasury and the Office for National Statistics. This would create a national database of contact details for access by government agencies. It would also underpin a national ID card.
A feasibility study of the register is in the hands of ministers, revealed Len Cook, registrar general for England and Wales, in a letter to the Guardian this month. "The report recommends further investigative work, which it is anticipated will last between 15 and 18 months, before any final decision is taken."
Such a register will have strong backing from e-government enthusiasts in Whitehall. It is quite possible that when Shepway finally gets its local one-stop change of address service, it will be courtesy of central government's computers.