Responding to an increasingly diverse society is essential if public services are to meet their full potential, according to Sir John Bourn, head of the National Audit Office (NAO).
The report - the first of its kind by the NAO - looks at the way in which all government bodies are taking steps to better tailor their services to the needs of these diverse groups.
This reflects the Government's emphasis on improving the diversity of the Senior Civil Service and on designing services to meet the different needs of the citizens who make up modern society.
The NAO report is based on a survey of 131 government bodies. It assesses their performance under each of the Government's six key diversity strands: disability, gender, race, religion and belief, age, and sexual orientation. In addition, the NAO used interviews with public sector staff and stakeholder groups.
The report finds that knowledge of customer diversity; the diversity of the workforce; and the success in meeting diverse needs through service delivery, tend to go hand in hand.
In terms of its own staff, the Civil Service as a whole is broadly representative of the wider population in terms of gender and race. At senior grades, while it is still far from being as representative, it is making steady progress on its targets for increasing the percentage of women and people from ethnic minorities.
However, there appear to be particular challenges in improving the workforce representation for disabled people. There is a continuing shortfall in the ratio between disabled staff and the wider population at all grades throughout the Civil Service.
Some 13.6 per cent of the economically active population of the UK are disabled in some way; but only 2.3 per cent of the Senior Civil Service have declared they are disabled.
The NAO survey also reveals that government bodies seem less confident of their performance in meeting needs connected with race, than with other diversity strands. Another finding is that government bodies possess much less information for religion and belief and sexual orientation than for other diversity strands.
Bourn said: "Tailoring public services to address diverse needs can be seen as important, not simply as a moral end in itself, but also to improve the efficiency and effectiveness of public services