The government is considering proposals to share citizens' data across the public sector as part of efforts to monitor social and economic trends, reduce fraud and better target services.

However the plans, contained in a Cabinet Office policy document from April and highlighted by a report in the Telegraph yesterday, are likely to be controversial.

They include provisions for data on individuals' education, employment status, income, benefits, housing, wealth and even energy use to be shared across public sector bodies.

The data would be shared among organisations such as government departments, local authorities, schools and the police.

The data could also be shared with private firms which provide public services. One suggestion is a requirement for all projects and individuals needing access to personal data to be 'accredited' and then listed publicly.

The document claimed that sharing this data could help to achieve a range of outcomes. One area of focus is reducing the estimated £37 billion lost in fraud, error and debt every year.

Sharing data could help to reduce this by checking housing benefit data to detect tenancy fraud, checking the student status of those receiving a council tax rebate and ensuring those receiving free bus passes are still alive.

It could also help to address differing levels of access to public services, improve social mobility, improve energy efficiency, prevent crime and inform policies designed to tackle poverty, according to the Cabinet Office.

The data could be used to identify and target services and support for families with multiple disadvantages, the document said.

It could also be used to inform support for specific groups with 'a particular data sharing need' such as the vulnerable elderly, ex-offenders, gang members, long-term unemployed and carers.

The document added that the government is "acutely sensitive to the potential concerns of citizens and proposals need to be designed in a way that safeguards people's privacy".

It said that the policy making approach will be 'open' and will be subject to some sort of scrutiny or wider public consultation.

The Cabinet Office emphasised that the work "does not involve the initiative which is led by NHS England".

The department said that "everyone agrees that there's a public interest case for this".

However, they admitted: "If we don't manage to persuade civil liberty and privacy groups that our proposals are proportionate and sensible, then we would find it difficult to go ahead."

The proposed changes would require legislation to be passed through Parliament, most likely after the next general election.

A Cabinet Office spokesperson said: "Before a decision can be taken on whether to introduce draft legislation, it is important that a wide range of views, from within and outside government, are understood.

"The Cabinet Office is leading an open policy-making process, working in partnership with civil society and privacy organisations to develop policy proposals for areas where we believe data sharing, as one possible option, could significantly improve the way we currently work. This process is ongoing and we cannot pre-empt the solutions that it may produce."