Proposals to allow public bodies to share data - and improve services - have been shelved because more time is needed to reach agreement.
Ministers have been forced to abandon hopes of introducing the legislation before next May's general election, because they are still canvassing "a wide range of views".
Central government has been trying to tackle this issue for at least a decade: Tony Blair's 'Performance and Innovation Unit' published a report in 2002 calling for the legal position to be cleared up. A bill had been expected before the coalition faces the voters. In late 2012, Cabinet Office minister Francis Maude said: "It should be in this Parliament, with any luck." But the legislation was missing from yesterday's Queen's Speech - which means it has missed its last chance to be brought forward before the election.
The delay will disappoint ministers, who believe data-sharing can help deliver better targeted public services, and save public money lost through fraud, error and debt.
They accept there are too many restrictions on the government's ability to share data between different departments and agencies - making agreements difficult and time-consuming.
But the Cabinet Office has also spoken of "the need to maintain the trust and support of citizens to collect and use their data", by weighing up the risks as well as the benefits.
It is over a year since the Law Commission launched its own consultation on data-sharing, but the organization has yet to issue its report, promised "in the spring".
Asked about the missing bill, 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 both within and outside of government, are understood.
“The Cabinet Office is leading an open policy making process, working in partnership with civil society/privacy groups to discuss and develop, as far as possible, an agreed set of policy proposals."
The key restrictions on data-sharing are the Data Protection Act 1998, which sets the rules for handling personal data and the common law of confidentiality, which protects confidential or private information. Statutory bodies such as local authorities can also face challenges for acting "ultra vires" if they use information collected for a purpose other than which it was collected.
The Law Commission report will also ask whether the problem is "simply a gap in education, guidance and advice", rather than legal barriers.