The police service and the Government have been “lethargic” in driving through the reforms needed to properly tackle the terrorism threat faced by the UK, a report by the Home Affairs Select Committee has said.

The report, Institutional Inertia Threatening Effectiveness of Counter-Terror Operations, published this week, calls for the Government to overhaul some of its decision-making and to create a US-style national security committee.

The report has already received heavy criticism from Home Secretary Alan Johnson, who said it is “inadequate” and “wholly inaccurate”.

The committee said it is concerned that the Government and the police “appear to have been lethargic in driving through necessary reforms to the policing system”. In the report the Government and enforcement institutions are advised to be more proactive in identifying problems themselves. Reacting after disasters such as 7/7 have taken place is leaving it too late, the report says.

The committee also says that police must not become complacent over the power of regional counter-terrorism units (CTUs) to supply the skills and expertise needed to disrupt and prevent attacks happening. The committee warns that the CTUs are useless without sufficient information gathering from local communities.

“Despite creating regional bodies, the police must take every care to maintain the links with local communities which will be at the core of any intelligence gathering,” the report states.

The committee also warns that the creation of a National Terrorism Agency should be viewed with caution as, although it would remove the problem of coordinating the work of 52 separate police forces, the experience of the US suggests it is not a cure-all solution. “We remain convinced that police skills and knowledge, rather than policing structures, are the key to preventing terrorism,” the report states.

Keith Vaz, chairman of the committee, said: “Too often in this inquiry we saw suggestions for reforms to the counter-terrorism structure rebuffed. The Government’s response to terrorism must be as constant and adaptable as the threats we face are themselves, and should be clearly visible and accountable to both the public and Parliament.”

Mr Johnson said: “I totally refute the unsubstantiated and wholly inaccurate claims in this inadequate report. The Government fully understands the threat this country faces from international terrorism and has extremely effective systems and processes in place to deal with it.

“Indeed, it is all the more surprising, given that the same committee found only six months ago that ‘the UK’s counter-terrorism strategy is first-class, effective and as joined-up as any system of government can expect’.”

The Conservative Party welcomed the report, calling for a review of all counter-terrorism powers and legislation.