It would have been no use his asking help from the linguists (who are presumed to know about meanings) because they have already taken over institutional for one of their own technical terms. An institutional text, we are told by David Crystal in his Cambridge Encyclopedia of the English Language, is anything that is couched in the language of "political speeches, sermons, government/public talks, legal proceedings, council meetings" etc etc, while the Oxford English Dictionary understandably shies off making its own definition of "institutional linguistics" and quotes someone else's: "A branch of systemic linguistics", says this one, of which the aim is "to confront tongues and communities as social institutions." Thank you very much.
The real trouble with the word institutional is that it sends out a number of different signals, some of them quite inappropriate to the doings of the Metropolitan Police. Its commonest association is not with the worthy institutions David Crystal had in mind - Parliament, the Law, the Church - but with others of a humbler kind: the old poorhouses, the mental hospitals, the houses of correction, the kind that is quite clearly understood when it is said of some unfortunate person that they were "living in an institution". And the first thing we think we know about such a place is that all its members are subject to the same regime, which is imposed on them, compassionately or not, by those in authority.
The attitude towards blacks deplored in the Lawrence report seems to have had little or nothing to do with those in authority, some of whom did their best to stop it. But by calling it "institutional" the report inadvertently suggests otherwise.
The word "institutionalised", which has also cropped up (as in "pernicious and institutionalised racism") is nearly as unhelpful. Institutionalise was a Victorian coinage which meant giving formal recognition to something, again not what Sir William Macpherson meant. Later it was applied to people who had been (as the OED puts it) "housed, trained, or brought up" in an institution, and had perhaps been depersonalised by the experience. This gets closer, but it doesn't quite fit the police canteen.
There are plenty of words that have changed so much over the generations that their origins are now irrelevant, but it can't be said that institutional is one of them. The Latin institutum was a purpose or plan, which is just what institute first meant in English, and an institution was the embodiment of such a plan; and there's still no getting away from the idea of an institution as a deliberate formulation - not some grassroots culture that has sprung up without anyone having planted it.