Local government has been warned that it must do more to keep its information secure in a critical report by the government’s information watchdog.

Complaints relating local government’s handling of data made up a “high” proportion of the work carried out by the Information Commissioner’s Office (ICO), according to its annual report.

The report found that local government made up 12% of its casework relating to data protection in 2013/14, up from 11% the previous year.

The sector was second only to money lenders, which remained steady on 17% of the caseload. The health sector came third on 10% (up from 9%) while central government made up 7% (up from 6%) of work on data.

The report said: “Information on the type of data breaches and the sectors in which they occur shows the high number of incidents within local government and health sectors; in particular the disclosure of personal data in error.”

It said that it had written a letter jointly with the chair of the Local Government Association to remind authorities of their duties on data protection.

“Local government holds particularly sensitive personal information. However the high level of security breaches show that local government has much more to do to keep the information secure,” it added.

Councils accounted for 45% of complaints generated about requests for information under the Freedom of Information (FOI) Act, way ahead of central government which made up 26% of complaints. However, the local government figure was down 2% on the previous year.

Overall, the ICO dealt with 5,151 cases during the year, up from 4,688.

Among the actions it took to deal with complaints relating to local government, the ICO agreed improvements to FOI compliance at Liverpool City Council, including better staff training.

It also agreed an audit at Devon County Council after an increase in complaints and followed up a previous audit at London Borough of Southwark, reviewing its performance in handling information requests.