Edward Chaplin, ambassador in 2004, said that despite billions of dollars being diverted towards Iraq, the majority was spent in and around Baghdad and on security.
'The frustration was that the south, being relatively quiet in this period, was not a very high priority for the Americans,' Mr Chaplin told Sir John Chilcot's inquiry in central London.
'They had a huge reconstruction programme, but on both the military training side and on the reconstruction side not much of that was finding its way down to Basra and that was damaging.
'It reinforced the feeling the south had always been neglected under Saddam Hussein and, so far as they could see, really nothing had changed.'
But Mr Chaplin added that UK forces had still made impressive achievements in the south where they were concentrated around Basra.
'Yes I think so, I can only judge from the reactions of Iraqis we spoke to,' he said.
'But I think in the training of the security and police forces, there was a lot of admiration of the way we went about it.'
'The frustration was that the south, being relatively quiet in this period, was not a very high priority for the Americans,' Mr Chaplin told Sir John Chilcot's inquiry in central London.
'They had a huge reconstruction programme, but on both the military training side and on the reconstruction side not much of that was finding its way down to Basra and that was damaging.
'It reinforced the feeling the south had always been neglected under Saddam Hussein and, so far as they could see, really nothing had changed.'
But Mr Chaplin added that UK forces had still made impressive achievements in the south where they were concentrated around Basra.
'Yes I think so, I can only judge from the reactions of Iraqis we spoke to,' he said.
'But I think in the training of the security and police forces, there was a lot of admiration of the way we went about it.'
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