The Home Affairs Select Committee said councils in Rochdale and Rotherham, which has also seen similar serious claims of child abuse grooming, were "inexcusably slow" to realise that sexual abuse was taking place on their doorstep.
Both councils had a "woeful lack of professional curiosity" and must be accountable for the "appalling consequences of their indifference to the suffering of vulnerable children".
The Committee called on the Ministry of Justice to put in place a number of reforms to court processes such as introducing specialist courts for child exploitation cases.
In addition, sufficient funding must be ensured for prevention and intervention for children at risk of sexual exploitation.
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