A House of Lords committee has slammed the "inappropriate" and "untrammelled" powers laid out in the Digital Economy Bill to share citizen data across the public sector.
The Delegated Powers Committee report recommended that the government removes broad powers to share information with a range of "specified persons", which could include private sector bodies.
It noted that the powers "would very significantly broaden the scope for the sharing of information across government departments, local authorities and other public bodies".
Under the plans, the Department for Work and Pensions would have power to disclose social security information on a bulk basis to all local authorities, police and schools.
That is intended to allow recipients to match the data against that already held to identify individuals "facing multiple disadvantages".
It is also intended to help the public sector reduce debt. For example the sharing of bulk data, such as HMRC's income tax records, about people living in particular areas to help authorities identify debtors.
However, the lords criticised the broad definition of the list of bodies citizen data could be shared with under clause 30 of the bill.
The committee said it is "deeply concerned" about the power to prescribe as a "specified person" someone "providing services to a public authority". That would mean private sector contractors could be entitled to receive and disclose citizen information.
"We consider it inappropriate for Ministers to have the almost untrammeled powers given by clause 30," said the report.
The lords recommended that the authorities intended as "specified persons" should be listed on the face of the Bill, and ministers should not have power to add any public authority.
It also said that government should remove plans to share data with any person the authority chooses "unless the government can explain to the satisfaction of the House why it is needed and what safeguards are in place to prevent its misuse".
Earlier this week, a separate Lords committee called for greater detail on how the UK government intends to introduce online porn age verification plans in the Digital Economy Bill.
Concerns have been raised that the restrictions could require the collection and retention of documents such as a copy of passports, driving licences. ®