Inspectors have rated Cumbria's social services as one of the worst in the country.
The report says the service is not serving children well
The Department of Health (DoH) has published performance ratings for each of the country's 150 councils.
Cumbria is one of just eight given a zero star rating out of a possible three and is now classed as failing.
Cumbria County Council's Conservative leader, Rex Toft said the authority acknowledged "something had gone seriously wrong" and was determined to address it.
Inspectors found the service was badly managed and that when it comes to care, cases are poorly assessed and recorded.
The department was rated for both adults and children's services.
For the adult services, inspectors said some people were served well and capacity for improvement was uncertain.
But for child services, they said the department was not serving people well and there was poor capacity for improvement.
Zero star councils
It comes after the social services inspectorate warned in 2000 and in 2001 that there was a problem.
Mr Toft said: "As councillors we thought that we were giving the department the money which it needed to provide a safe and robust system.
"And suddenly to be told out of the blue that it was not safe really was a body blow to us and we are absolutely determined that we are going to get to the bottom of what has gone wrong and to make sure the system is improved as quickly as possible."
An internal investigation has now started to find out where the problem is.
Mr Toft said: ""We are absolutely frank about acknowledging the fact that something has gone very seriously wrong and that we are determined to put it right."
Paul Moore, head of children services, said he was disappointed with the report.
He said: "I am disappointed for the children and families of Cumbria first and foremost that the service is not meeting their needs as well as I would expect.
"And I am disappointed for the many social workers who do an excellent job throughout Cumbria and who have been failed by some of the systems that have not been in place."