The DCSF Capability Review, published by the Cabinet Office to assess the department against leadership, strategy and delivery objectives, found the DCSF was improving in all areas.
It examined internal and external issues including staff management, forward planning and resource allocation, and looked at how well the department worked with external partners.
Findings revealed that the department has developed clear priorities, while the Children's Plan has helped the DCSF create a shared purpose and direction.
However, the report highlighted a need to identify and develop the skills mix needed to meet its future goals and called for a stronger, more focused leadership of people.
It added the challenges of the Children's Plan would test the department's delivery systems and called for a clear understanding of the motivations, needs and behaviour of the people who use and deliver services.
Martin Johnson, deputy general secretary of the Association of Teachers and Lecturers, said: "We always look forward to working with ministers who have a real commitment to education and children. It is a shame the commitment does not always translate into the right policies for children and those working with them."
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