Labour had not thought seriously about how government works when they took office in 1997, according to a civil service union.
Johnathan Baume, general secretary of the FDA union that represents senior public servants, told the public administration committee that Tony Blair and his ministers came to Whitehall with "a year zero mentality".
The civil service structure and methods were seen as "old fashioned and not quite 'cool Britannia,'" he added.
Baume said it took time for the government to recover from that initial attitude, and any incoming administration should have the "humility" to learn the lessons and "recognise there is a machine and a process" already in place.
He told the committee those processes are the result of the "lessons of history" and added that the interface between the political and civil service machines is "a point of weakness".
Committee chairman Tony Wright began today's evidence session into "the high-minded issues of how we govern in this country" by asking former minister Lord Sainsbury if the Whitehall machine was "designed for a simpler, slower world" and not fit for the modern pressures of governing.
Sainsbury, who was director of the family supermarket business before taking up a seat in the Lords, said he came into government thinking the biggest mistake would be to try to take ideas from his previous career and try to make them work in Whitehall.
It had been tried before and did not work, he added.
"In business you have very clear measures of performance and it is easy to cascade them down an organisation to meet targets," Sainsbury said.
Measuring government output is "rather more difficult".
He said it was unclear who is responsible for what in government, especially between ministers and civil servants.
He gradually began to understand why centrally-made decisions were sometimes not implemented - there was no mechanism for ensuring compliance.
Departments and quangos were "very confused" about who set budgets and policy, while policy processes were chaotic and basic principles not followed.
Wright asked Sir Richard Mottram, former permanent secretary at the Cabinet Office, if the government is dysfunctional.
He replied "not the departments I was running," but added he had seen everything described by Sainsbury.
"I have not run departments where they could not make policy," he added.
Mottram said he had been "involved in systems of government where there was insufficient focus on strategy" and no proper focus on financial management.
However, the better government initiative is engaged in trying decide how the system could be altered to focus on process to produce a better result.
Sainsbury said it is not a case of politicians or civil servants being in the wrong: both operate and interact in a way that is dysfunctional.
He said that the role of cabinet secretary is "like a senior partner in a law firm".
He or she deals with problems that have to be dealt with but has no line responsibility over different departments.
The civil service is not run like a business, instead their power comes as servants of the minister, who is in turn responsible to parliament.
"There is no one whose job it is to join up government," Sainsbury said.
It is unrealistic for minsters to still be held responsible for everything a department does as neither he nor the permanent secretary has clear, defined responsibilities.
Sainsbury also criticised the fast turnover of civil servants, who are encouraged to move on after four years so as not to become "stale".
Coupled with a high turnover of ministers, it meant departments lacked institutional memory.
He revealed that after eight years in the same job he was often briefing his civil servants rather than vice versa.
Wright asked if senior civil servants are anxious about a hung parliament.
Baume said people are "conscious of the pressues it would bring to bear" as well as the "practical difficulties".
He added: "It is not that it is not do-able".
Scotland and Wales both have experience of handling the complexity of governing with no working majority, Baume said.
However, it would be stressful for "the work of government in the round".
Baume added that it is "not inconceivable that you could have a hung parliament for a number of years".
Dods Parliamentary Communications Ltd