Sunderland's 54,000 children are being put at risk because of a 'corporate failure by senior leaders and managers that leaves children and young people potentially at risk' according to an Ofsted report published today.
Standards have dropped significantly since the last inspection in 2012 when the local authority's performance was judged to be 'good'.
Twenty one cases - one in every ten looked at by inspectors - were referred back to the authority by inspectors to ensure immediate action was taken to keep vulnerable children safe.
The report specifically criticised the high number of unallocated cases which have not been passed onto a caseworker. 122 cases have been held by the council for 5 more than five months, leaving these children unprotected during that time.
Ofsted also noted that caseloads for workers were very high due to reliance on agency staff and temporary workers.
The report points to the particularly poor care given to those leaving the care system. They are often left in inappropriate accommodation with little support.
The local authority has come under increased pressure in recent years. Demand for council services has grown markedly: around 25% of children in Sunderland are living in poverty. The number of children needing support from Children's Services has increased by 562 in the year from March 2014, from 2,663 to 3,225.
This demand comes amid cuts to the council budget. The authority had its annual grant cut by £170m over the last five years and faces a requirement to save a further £100m in the next three.
Following the inspection, Her Majesty’s Chief Inspector, Sir Michael Wilshaw, wrote to Secretary of State Nicky Morgan to express his concern over the inspection findings and to recommend remedial action be taken at the earliest opportunity.
Concern has also been expressed over Northumbria Police's contribution to protecting children in Sunderland. The sharing of information between police and the council was considered 'poor', and police failed to attend 'Strengthening Families" panel meetings with other agencies.
In total the report made 163 recommendations about how care for children in the authority could be improved.
Leader of the council Paul Watson said: " We completely accept the report and have already started work on the recommendations."