FA chief executive Brian Barwick has claimed that top-flight clubs have a responsibility to bring through more English youngsters into their first teams.
Arsenal, who often have no English players in their squad, are frequently cited as one of the worst examples of a club shunning domestic talent.
But Hill-Wood believes everything possible is being done to produce the next generation of England stars and insists the raw materials are simply is not there.
“It seems to me the people at the FA are out of touch with reality,” Hill-Wood said.
“I can’t think why anybody would make these comments when Arsenal and many Premier League clubs are spending a lot of money on their academies.
“It is not our fault if many English players are not good enough. It is the same for every one of the big clubs now. We find players worldwide. Football is now global.
“It is also the same in any other industry. You go along with the trends or you suffer badly.”