Torbay was judged “inadequate” for the second time in June 2018.
A Devon council is taking too long to tackle “critical weaknesses” in children’s social care, inspectors say.
A team sent in to monitor progress in Torbay found the quality of help and protection for vulnerable children continued to be “very concerning”.
A report on the visit said the council had made some progress on carrying out improvements since being judged “inadequate” for the second time in June 2018.
But it said the pace of change for children in need of help and protection was “too slow”.
The report identified a lack of co-ordination with police on how to disrupt children being groomed by adults to sell drugs.
It said staff knowledge and understanding of national issues of criminal exploitation of children or ‘county lines’ drugs gangs was limited.
The report said the concern was raised in 2018 and action was now being taken.
It also said there was evidence of “drift and delay” causing too many children to be left at risk of harm.
It highlighted the cases of two “very vulnerable” children raised during an earlier monitoring visit.
They were referred to senior managers again because no action had been taken and they remained “at risk of serious harm”.
Two inspectors from the government regulator Ofsted carried out a monitoring visit of the children’s social care service over two days in early October.
The report by inspector Brenda McLaughlin published on Friday said: “Senior leaders understand the significant weaknesses. They fully accept that progress is too slow and has stalled in some areas.”
The letter to Torbay’s director of children’s services Alison Botham identified “serious shortcomings” in the audit system for cases.
It said the council’s officers and leader were strongly committed to helping and protecting Torbay’s vulnerable children.
The report added that the recent appointment of an interim deputy director had brought a sense of urgency and focus on the needs of children.
In a short period she had carried out a “much-needed” review and analysis of quality of practice.
Social work caseloads had been reduced, but they needed to come down further.
The inspectors found improvements including staff had more time to plan work, more children were being visited by the same worker, staff morale was high and fewer social workers and team managers were leaving at short notice.
The report said: “Highly committed social workers told inspectors that they are supported by managers who now know the children who they work with well.”
But it added that the quality of help and protection and management oversight remained “highly variable” for too many children across all teams.
Children’s services director Alison Botham said in a statement: “The recent monitoring visit letter sets out Ofsted’s findings from their visit on 2nd and 3rd October and shows that there has been limited progress since the last visit in April.
“We share Ofsted’s concerns about the pace of change, and continued variability in practice.
“We have revised the improvement plan and increased capacity in the service so we that are able to achieve increased improvements for children and young people.
“Inspectors recognised the Leader’s and senior leadership team’s continued commitment to ensuring that the necessary improvements are made.
“I am pleased that inspectors also acknowledge that our social workers are highly dedicated, recognised the continued hard work of the staff and managers in Torbay’s Children’s Social Care services, and that they highlighted some examples of good practice.
“It is a real credit to all staff and managers working in Torbay that their determination to doing the right thing for children remains undaunted and this was acknowledged as a significant strength by Ofsted.”
The revised improvement plan will be considered by councillors at a scrutiny committee meeting next week.
The children’s services budget was reported to be heading for an overspend of around £4m this year due to rising care costs and an increased number of complex cases.