The civil service should be monitored by a new watchdog body similar to the National Audit Office, MPs have said.
Some 84,000 Whitehall jobs are set to go in 2008
The Public Administration Select Committee criticised government efforts to improve civil service performance.
A report said Whitehall job cuts were a "poor tool" for saving money, and that setting targets for numbers of posts to go was "crude and counterproductive".
The committee also highlighted failings of the Rural Payments Agency and online recruiting for junior doctors.
The cross-party group said capability reviews of departments suggested a "lack of leadership and serious deficiencies in service delivery".
The report added: "No department seems to be exactly 'fit for purpose' although the Home Office is unique in being well placed in none of the categories measured."
The Gershon Review set a government target of axing 84,000 Whitehall jobs and saving £21.5bn for 2008.
The report said: "There may well be substantial scope for efficiency savings in the civil service, but headcount cuts are a poor tool for achieving those savings.
"Setting numerical targets for departments is crude and counterproductive."
The committee also called on Gordon Brown to consider the effects ministerial reshuffles had on departments.
"The prime minister must bear in mind when managing ministerial moves that these can have a significant effect on civil service performance," said the MPs.
Tony Wright, the committee's Labour chairman, backed a call by former Cabinet Secretary Lord Butler for a National Performance Office for the civil service.
"Standards of government will be increased both by external audit and by greater parliamentary accountability," he said.
He added: "Few civil servants will have forgotten the apparent auction between the government and the opposition in the run-up to the last general election over who could cut the most jobs in the service."