The “woefully underequipped” Independent Police Complaints Commission (IPCC) is “on the brink of letting grave misconduct go uninvestigated”, the MPs said.
Their damning report, which found one in four officers faced complaints last year, warned: “At the core of public mistrust lies the suspicion that police are getting away with misconduct and criminality.”
But the watchdog is hamstrung and simply can not deliver the “powerful, objective scrutiny” that is needed, leaving the public frustrated and faithless, the Commons home affairs committee said.
Keith Vaz, the committee’s chairman, said it was “an insult to all concerned to do no more than scratch the surface of these alleged abuses”.
The watchdog was “buried under the weight of poor police investigations and bound by its limited powers”, he said.
“The public are bewildered by its continued reliance on the very forces it is investigating.”
The report comes after it emerged the officer cleared of killing a newspaper vendor during the G20 riots had previously served with the Metropolitan Police (MPS) but was allowed to retire on medical grounds in 2001 despite an unresolved disciplinary proceeding.
Just three days later Simon Harwood rejoined as a civilian before eventually transferring back to the Met, who sacked him in September for gross misconduct over the death of Ian Tomlinson.
The police watchdog said Mr Harwood’s case “must never be allowed to happen again”.
Yet the committee’s inquiry found “every year, 200 police officers facing disciplinary panels retire or resign in order to avoid misconduct proceedings”.
It suggested officers’ contracts could be amended to impose a duty on officers, even after retirement, to assist in any police or IPCC investigation.
“Public confidence in the police has been shaken,” the report said.
The phone hacking investigations, payments to police officers, and the pleb-gate row between Andrew Mitchell and officers in Downing Street “all cast doubt on police integrity and competence”.
One in three appeals into investigations conducted by police forces were also upheld in 2011/12, along with three in five appeals into a police force’s decision not to formally record a complaint, figures showed.
“The police do not appear to be very good at investigating themselves,” the report said.
“A botched job is an offence to all concerned.”
Criticism focused on the watchdog’s lack of power and resources, with MPs finding it has a smaller budget than the complaints department of the Metropolitan Police alone.
“Too often the work of the commission seems to exacerbate public mistrust, rather than mend it,” the report found, adding inaccurate IPCC statements “intensified anger” during the riots in the summer of 2011.
“The commission must bring the complaints system up to scratch and the Government must give it the powers it needs to do so.”
The MPs called for it to take on more of the serious cases, saying so-called “supervised investigations” were “no better than a placebo”.
Investigations also came too late, trails were left to go cold, and the watchdog “can’t afford to do more”, they added
It called for the Home Office to provide the commission with a “specific budget for a serious case response team” after finding its ability to deal with cases involving “fitting people up”, withholding evidence and “covering up” was limited.
Dame Anne Owers, the watchdog’s chairman, said: "This report recognises that we do not yet have the resources or powers to do all that the public rightly expects and needs from us.
“That is what we have been saying for a long time. Without that, we will continue to struggle to meet the legitimate expectations of complainants and of families who have lost someone in tragic circumstances.
“We are a demand-led organisation, and, as the committee's report shows, the demand for our services continues to grow.”
