A panel investigating "institutional racism" at a council discovered evidence of serious victimisation and bullying.
The cross-part working group has recommended Brighton and Hove City Council takes urgent steps to improve the diversity of its workforce and improve the experiences of staff from minority groups.
A council worker who gave evidence to the panel told The Argus there was a "culture of fear" that would take years to change.
Chaired by Paul Elgood, the equalities panel was set up last year following a report by the Brighton and Hove Racial Harassment Forum which said institutional racism at the council was hindering its work in reducing racist incidents.
The council worker said: "Members of the public would be shocked to know what is going on at the council.
"There is a culture of fear that permeates the whole organisation.
"It's often because of a lack of skills or a lack of support for them to deal with situations that occur. The blame then shifts on to the victim.
"In a survey, 21 per cent of staff said they had experienced bullying or harassment. That is absolutely disgraceful.
"There is a real fear of coming forward because staff who raise issues then become the problem.
"It doesn't help anyone and inevitably ends up in tribunals.
"Substantial change will require an entire culture shift and proper resources and will take five to eight years."
The panel's key findings recommend that the council:
Takes urgent steps to improve the diversity of the council's workforce, particularly the numbers of ethnic minorities and disabled employees, and proactively seeks to attract more staff from a wider range of backgrounds.
Provides greater support to its employees against victimisation and bullying.
Improves the monitoring of its performance and service delivery to ensure all residents receive equal treatment and opportunity.
*Improves its consultation and feedback with partner organisations and communities.
Improves its programme of training on equalities at every level of the council, especially for middle management and including councillors.
Becomes more proactive in its equalities work, for example providing an access officer to promote issues around disability.
Coun Elgood said: "There was explosive evidence.
"What we often found was that the intentions were good but in practice this wasn't trickling down through all areas of the authority's work.
"There is good work going on, and we do not want to undervalue that.
"However, I have to say that the evidence we took was so serious in nature we cannot underestimate the need to implement the recommendations we are making in this report."
Council leader Simon Burgess, who sat on the panel, said: "I wouldn't want the many staff who work really hard on tackling equalities issues to feel down-hearted by this report because we have recognised how much good work goes on.
"But we can never become complacent over equalities issues and every organisation has to keep looking at how it can improve."
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