There has been a cross-departmental failure in the government to meet employment duties under the Race Relations Act, a report claims.
A three-year study from the Commission for Racial Equality (CRE) cites a "systematic" breakdown of race relations commitments among public bodies.
In its final report, before being merged into the Commission for Equality & Human Rights in October, the CRE says its findings are "very troubling".
Nick Johnson, the commission's policy and public sector director, said: "While some public bodies such as the criminal justice agencies have made huge strides in the area of race relations, others have fallen down.
"It is shocking that Whitehall departments and those leading our Olympic delivery rather than leading by example are in fact failing us time and time again."
Departments ‘committed’ to addressing concerns
Commenting on the CRE report, a Cabinet Office spokeswoman said: "Departments have reacted positively to the recommendations made by the Commission for Racial Equality.
"Ministers and senior officials are fully committed to the government's diversity agenda. While we do not accept all of the CRE's findings, all departments are committed to taking robust and positive action to address their concerns."
Racial inequality warning
In an accompanying final legacy document, the commission warns of the "parallel lives" of various communities in the UK.
"The simple fact is despite the progress that has been made, if you are an ethnic minority Briton, you still are still more likely to be stopped by the police, be excluded from school, suffer poorer health treatment and live in poor housing," Mr Johnson added.
"The language may have changed but the reality is racial inequality is alive and kicking."