This is a matter for individual local authorities who, like all public sector organisations are required to comply with data protection legislation.
The Local Government Association (LGA) have recently published “Data Handling Guidelines for Local Government” to complement the Central Government Data Handling Guidelines published by the Cabinet Office. We welcome the LGA guidelines and my officials were consulted on their publication. They are available online at:
http://www.idea.gov.uk/idk/core/page.do?pageId=9040133