Hackney Council's children's social care department has been given a "requires improvement" rating by Ofsted, with inspectors highlighting a "deterioration" in the quality of services for disabled kids.
The report follows a "focused visit" in February that found some children were living in situations of "significant harm" for too long before action was taken.
Inspectors said since the last visit in 2016 - when the service was rated "good" - there had been a "decline in the quality of practice and services for some vulnerable children and their families".
Ofsted uses four grades - outstanding, good, requires improvement, and inadequate.
Three of the four areas reviewed were given requires improvement - the impact of leaders on social work practice, the experiences and progress of children who need help and protection and overall effectiveness.
The experiences and progress of children in care and care leavers department was rated good.
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Inspectors found most children with disabilities and their families received timely support, but some experience delays in assessments and support plans.
They added: "There is a significant backlog of care packages to review, although this is being tackled and is reducing. Some children with complex needs experience delay in accessing suitable education provision, leaving them spending significant amounts of time at home and placing their families under stress."
The report does state action was taken earlier this year to improve the service, and that the work is beginning to have an impact.
Also highlighted was a slow response to deal with a "significant increase" in the number of children missing from education, as well as a backlog of assessments for those outside mainstream schooling, particularly in Stamford Hill's Jewish community.
Deputy mayor Cllr Anntoinette Bramble said: "The report highlights some strong, sector-leading social work practice but we recognise the whole council has work to do to ensure services are once again delivered to a consistently high standard.
"A decade of austerity means our children and families are living in more challenging circumstances than ever before, and that makes it even more vital we have the services in place to support them, and to support this rising demand."
Mayor Philip Glanville said: "Supporting vulnerable children and being a corporate parent is the council's most important responsibility, and we are more determined than ever to make sure we are providing the services our children need and deserve.
"It is our aspiration that services will perform at a level that would be judged 'good' within one year and 'outstanding' within two years. It's an ambitious target but one which the whole council is committed to."