"Systematic failures" led to data loss scandal

By Michael Holden

LONDON (Reuters) - Systematic failures and "woefully inadequate" processes for handling data at the country's tax authority led to the loss of personal details of nearly half the population, two scathing reports said on Wednesday.

Institutional problems were the reason two computer discs containing the names, addresses, bank details and national insurance numbers of 25 million people, went missing last year an Independent Police Complaints Commission probe found.

No junior members of staff could be held responsible for what was Britain's biggest data security lapse as Chancellor Alistair Darling originally suggested, the IPCC added.

The head of the tax collection office later resigned and despite a massive police hunt, the discs were not found.

"An event like this was certain to happen -- the only question being when," said the report by IPCC Commissioner Gary Garland, adding that staff had to deal with a "muddle through" culture.

The two discs vanished after being put in the post last October by a member of staff from HM Revenue and Customs' Child Benefit Office in Washington, near Newcastle, to the financial spending watchdog in London, the National Audit Office.

The NAO had specifically requested that it did not require individuals' names, addresses or bank details, and had also asked that HMRC ensure the information was sent securely.

But to save money, HMRC decided to send existing data taken from a full scan of child benefit records.