Slashdot [1] reports on somehting that will doubtless make the job of a lot of server jockies a bit harder.
If I read the reports from other sources, though, the records weren’t lost, per se’… rather some backuptapes (apparently a few of several generations) containing the records went missing.
My take, based on personal experience with backup systems involving large servers, councils that some yahoo either threw them out, or over-wrote them… and that the chances of there being an actual rather than imagined security breach are rather small.
They’re reacting properly by what I can see in the reports, but until I see reports of someone actually trying to access the funds made available in those records, I’d say the story is being overblown by the press.