He told the inquiry: "We've got huge experience in this country - we're not using it and we're putting amateurs into really really important positions and people are getting killed as a result of some of these decisions.
"It's a huge responsibility and I just don't sense we're living up to it."
Without naming individuals, he said he blamed those at the highest levels of government.
"I am not talking about the soldiers and commanders and civilians... who did a great job. But it's the intellectual horsepower that drives these things [which] needs better co-ordination," he said.
Later, the commission heard that decisions on medium and long-term strategy had been imposed on regional commanders without consultation.
There was a terrific argument about this but actually there was no point in us discussing it as it already been discussed in Washington and was immutable
Sir Hilary Synnott CPA regional co-ordinator
Sir Hilary Synnott, the Coalition Provisional Authority's (CPA) regional co-ordinator for Southern Iraq from July 2003 until January 2004, described the moment a long-term plan for the governance of Iraq had been revealed.
"It caused an explosion among American commanders," he said.
"This was a long-term plan going up to the end of 2005.
"It was deeply flawed.
"There was a terrific argument about this, but actually there was no point in us discussing it, as it had already been discussed in Washington and was immutable."
He said when they had later been told that the CPA was to be wound up it had come as a "total surprise".
"The decision was made in Washington," he said.
"The assumption at the time among us was that the decision was greatly coloured by the imminence of the mid-term elections.
"The CPA was not winning, best to hand over responsibility for Iraqis and to cease to be responsible for Iraqi sovereignty.
"That's how it came to pass".
He said resource and expertise problems had hampered the coalition's mission.
"Life was getting worse for the Shia under us than it was getting better," he said.
AT THE INQUIRY
BBC World Affairs correspondent Peter Biles
The scale of the chaos in post-war Iraq was revealed today.
Sir Hilary Synott disclosed that before he left for Iraq in 2003, he had been told that Basra was "a bloody mess". He soon confirmed this for himself. He arrived in southern Iraq to find there were no secure communications with London.
He persuaded the Americans to provide him with a computer and set up a free Yahoo mail account to send his confidential despatches to the Foreign Office.
In Baghdad, we heard how the "top end" of the Ba'ath Party was still driving around in cars with black-tinted windows after the invasion.
Adding to the instability were the 150,000 criminals released from prison by Saddam Hussein just before the war, who were also on the loose and "tooled up".
Relations between the British and the Americans in the Coalition Provisional Authority were often strained. But Sir Hilary Synott said that when he was able to make a worthwhile argument for additional funding for the south, suitcases stuffed with US dollars would simply be flown from Baghdad to Basra, aboard C130 Hercules aircraft.
For example, Iraqis in Basra had electricity for only 12 hours a day, compared with 18-20 hours a day under Saddam Hussein.
Bureaucracy had made it difficult to show people in Basra how they were helping, he said, and failure to meet the expectations of the Iraqi people was "never really [come] to terms with."
He said he spent seven months trying to obtain money to mend a bridge, but was told it would be seen as breaking Treasury rules and "the money was tied up in a separate package".
Later, Lt Gen Sir Graeme Lamb, who was in charge of the multi-national forces in the south-east of Iraq from July to December 2003, and senior British military adviser to Iraq between September 2006 and July 2007, likened the CPA to "dancing with a broken doll".
"It was a lot of effort and your partner wasn't giving you much in return.
"We were finding ourselves presented with a number of problems which had not been anticipated which we were not structured or resourced for," he said.
During his time in Iraq, he said disorder turned from an "insurgency on steroids" to serious sectarian violence.
"My sense was we had held the line. We contained what was unfolding chaos," he said.
But asked what lessons had been learnt, he replied: "A raft of lessons - few of them learnt I sense."
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