The Commission on Race and Ethnic Disparities said family structure and social class had a bigger impact than race on how people's lives turned out.
It said children from minority ethnic communities did as well or better than white pupils, but overt racism remained, particularly online.
The commission was set up after Black Lives Matter anti-racism protests across the country last summer - triggered by the killing of George Floyd in the US.
The #RememberOluwale charity, set up in honour of David Oluwale, a British-Nigerian who arrived in Leeds in 1949 and whose body was pulled from the River Aire, has condemned the findings of the report.
Two police officers from Leeds were convicted of actual bodily harm on Mr Oluwale in 1971, but acquitted, at the judge's direction, of his manslaughter. Both served time in prison. Mr Oluwale's death was the first officially recorded incident of police racism.
Ruth Bundey, one of DOMA’s patrons, who has worked as a solicitor in the Chapeltown area of Leeds for decades, said: “David Oluwale was hounded to his death in Leeds in 1969 by two police officers. My work now focuses on deaths in police custody and I am certain that racism is a major factor in most of the cases today where black people are concerned.”
In a statement issued after the report was published, Prime Minister Boris Johnson said it was "right" that ministers now consider its recommendations in detail and assess "the implications for future government policy".
He added: "The entirety of government remains fully committed to building a fairer Britain and taking the action needed to address disparities wherever they exist."