More young people in Northern Ireland have grown up to see the other side as an enemy, the chief constable said.
Matt Baggott noted the increased number of so-called peace walls separating Catholic from Protestant now than before the 1998 Good Friday peace settlement.
Serious sectarian clashes between loyalists and republicans erupted during the flags dispute in East Belfast.
Mr Baggott said: “What we are picking up is a significant number of young people are still growing up believing there is an enemy across the road and we have to name that for what it is.
“There is a lot of work to be done to deal with historical enmity. There is a lack of joined-up social planning in those areas because of the way politics is divided, different departments run by different parties.”
Public services are operated by a five-party power-sharing administration at Stormont. Ministers are still working on a cohesion, sharing and integration strategy.
The senior officer added political divisions made it hard to put in place 10-year improvement plans.
“The suspicion and the mistrust that people hoped would be resolved very quickly has not been and I think those old (sectarian) views remain entrenched,” the chief constable said.
He said the flag issue created a rallying point for a raft of diverse historical concerns among loyalists.
The chief constable observed that violence had happened in areas of high deprivation, tending to emerge in estates historically controlled by paramilitaries and among young people growing up without access to employment.
“It is, frankly, young people without enough to do,” he said.