On 18th October 2007, a junior official of HM Revenue & Customs ("HMRC") sent data on child benefit claimants to the National Audit Office. The data, sent on two CDs contained details of 25 million individuals and failed to arrive.
On 20th November 2007, after an extensive search had failed to recover the missing data, HMRC Chairman Paul Gray resigned. The Chancellor made a statement to the House of Commons and the Prime Minister was ultimately forced to apologise for the "inconvenience and worries" caused. He also ordered that security checks be undertaken by all government departments.
On 25th June 2008, a report by Kieran Poynter, Chairman of PWC concluded that the loss of the disks was "entirely avoidable". A separate report, by the Independent Police Complaints Commission, highlighted "woefully inadequate" processes.
Subsequently, HMRC conducted its own internal review of its procedures for managing confidential waste documents. It revealed that whilst arrangements to destroy confidential waste were in place across much of the organisation, a large number of different contractors were involved - appointed at local level - each of which offered different services. What was needed was a single, robust national solution that guaranteed maximum security whilst also ensuring that the waste paper was recycled wherever possible.