The communities department faces a “significant hole” in its funding, according to a report from a committee of MPs.

The select committee which scrutinises Communities and Local Government (CLG) said the department would find it “extremely challenging” to deliver the £887m efficiencies it pledged at the 2007 spending review.

The report points out that at last year’s Autumn Performance Report, CLG revealed only £40m, five per cent of the planned total, had been saved so far.

The vast bulk of these savings were to come from the Homes and Communities Agency encouraging more private finance in building affordable housing, but the report suggests that the property downturn jeopardised these plans.

The committee called for the department to provide much more information on its success in making efficiencies.

MPs also accused the department of lacking the "full range of skills" required to do its job properly, of failing to come up with the figures needed to judge its work, and called for better workforce planning.

A policy of moving staff on after nine months was "not a sensible way to run an organisation", the report warned - but also criticised frequent ministerial turnover.

CLG has had three secretaries of state since its inception as a separate department in 2006, and four different housing ministers since 2007.

Committee chair Phyllis Starkey said there had been improvements in departmental performance in recent years, but said it had “yet to become a ‘big hitter’ in Whitehall”.

“We have yet to see consistent and sustained evidence that [it] possesses the full range of skills required for the effective formulation and delivery of the policies for which it is responsible,” Starkey said.

"It cannot help that officials serve an average tenure of just nine months and that, over the lifetime of the department so far, senior ministers have remained in post for barely a year."

A CLG spokesman said the department had worked hard to respond to the recession by delivering “a comprehensive package of support to homeowners under threat of repossession and to deliver the housing pledge in Building Britain's Future”.

"The speed at which we responded to these new priorities demonstrates just how adaptable the department is: the measures we have taken have made a real difference,” he added.