Mr Narey described how head-hunters approached individuals in the public and private sector, but they "refused" to even look at the post. When he became director general in 1999, he inherited a Prison Service in London that was a "nightmare".
He said: "Wormwood Scrubs was a deeply violent, evil place. Wandsworth was not a violent place but it was one where the staff culture was utterly reprehensible. Holloway was in a permanent crisis, or very nearly unmanageable. Brixton was filthy, with the most outrageously appalling health care. I could go on."
Mr Narey, now chief executive of the National Offender Management Service and the second most senior civil servant in the Home Office, was speaking at the inquiry into the death of Zahid Mubarek.
The Asian 19-year-old was beaten to death by his psychopathic cellmate, Robert Stewart, on the day in March 2000 that he was due to be released after serving a short sentence for theft. Stewart, who is currently serving a life sentence, was placed in the same cell at Feltham young offenders' institution despite warnings that he was dangerous and had written racist correspondence.
The inquiry was shown extracts from an internal Prison Service report, published after Mr Mubarek's death, which examined racism at Feltham. In its conclusion, the document said: "There is evidence that racism exists at Feltham, both overtly and by more subtle methods."
It highlighted how staff from all ethnic groups had spoken of an underlying culture that suggested the only way they could be accepted as part of the team was by enduring racist comments, banter and jokes.
In earlier evidence, Mr Narey acknowledged that the "horrifying" death had been "preventable". He said Feltham was institutionally racist and that 20 officers had been sacked in three years. The care provided, he explained, fell woefully short of his aspirations for a decent prison.
He acknowledged that even in the newest prisons, living conditions were "extremely undesirable". "I am very aware and regret that, every day, countless numbers of individuals have to share a cell meant for one and in living conditions in many cases which I consider to be little short of gross."
The hearing continues today.