The Office for National Statistics will carry out the next national census on 27 March 2011, with citizens being able to provide details on themselves and their families online for the first time.
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For 2011, the Office for National Statistics will hire 35,000 temporary workers to make sure census returns are maximised, and to clamp down on those refusing to fill in census forms - which is a legal obligation.
The New Local Government Network (NLGN) think-tank condemned the cost of the census, claiming an alternative system of collating census information from existing public sector databases could be £250m cheaper than the £480m earmarked for 2011.
It said much of the information in the 2011 census would also be out of date by the time it was published 18 months later.
James Hulme, a spokesman for the New Local Government Network, said, "We calculated that the government could save about £250m by drawing on records from existing public services, such as GP surgery lists and the electoral roll which is updated each year, rather than every 10 years.
"At a time when the public finances are stretched, this is an ideal way of saving money."
Local authorities rely on full census returns for their areas to maximise state subsidies for the delivery of public services.
Many have complained that missing data from migrant workers living in their areas has led to underpayments.