Councils will be ordered to stop spying on local residents amid Government concerns over the continuing creep of the surveillance state.
The review was triggered by ministers’ concerns that incidents where council staff were found putting microchips into residents’ dustbins and tailing parents to school had eroded public support for the entire enforcement system.
Two-thirds of councils have taken up the snooping powers open to them under the Regulation of Investigative Powers Act since its introduction in 2000.
Ministers believe that while surveillance including covert cameras is sometimes necessary to detect offences such as fraud, it must only be used as a last resort and in the most serious cases.
They plan to issue guidance and set strict new limits to ensure that in future the RIPA powers are not used to tackle minor infringements or the law or local regulations.
John Healey, Local Government Minster, said: “My main concern is to tighten up the operation of the system so it can command the public confidence that is needed.
“Councils do need these powers, but they need to use them only when it is necessary and proportionate, and only if the information can not be found another way. They should not be used lightly, because their use is a serious business.”
A number of councils have been accused of snooping since the introduction of Ripa, often for putting microchips in rubbish bins to discover if items had been thrown away which should have been put out to be recycled.
Earlier this year, Poole council in Dorset defended its decision to tail three families as they walked with their children, to find out whether they had given a false address in order to appear within the catchments area of a popular school.
Under the new guidelines council staff will be warned that they should not generally use surveillance to check domestic waste or to detect low grade offending such as dog fouling or the misuse of disabled driver badges.
Instead, Ripa powers should be limited to serious cases, such as loan sharks, fly-tippers and rogue traders.
In Wolverhampton recently, covert cameras were used to catch fly-tippers who had vandalised CCTV, leading to the prosecution of an offender who had dumped 300 tyres, while Birmingham council was able to catch 150 loan sharks using communications surveillance.
Mr Healey said: “As well as being a matter of principle, the problem with using Ripa too freely is that every time one of these cases comes to light it leads to serious criminals like loan sharks and rogue traders rubbing their hands together.
“They know that growing public concern means councils are more reluctant to use the powers that they should quite rightly be deploying against proper crooks.
“As long as councils and other public bodies understand that they should be adopted only as a last resort, then we encourage their use in the right circumstances.
“These are heavy duty powers and they are needed to detect heavy duty crimes in cases were evidence can not be gathered in any other way.”