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An upsurge in violent youth offending, gang drug dealing and use of weapons is leading the Youth Offending Team in Medway to have to "rebuild" the service.
A report by the independent HM Inspectorate of Probation following a routine inspection gave it an overall rating of "requires improvement".
But inspectors found the service, which handles 10 to 17-year-olds who have offended or who are at risk of offending, had made "slow and determined" efforts amid uncertainty over its future.
The findings come following a visit in March at a time when Medway Council had abandoned plans to outsource the provision.
Chief inspector of probation Justin Russell said: "Last year, Medway YOT supervised more than 100 children who had been sentenced by the courts, as well as children who were being dealt with outside the formal system.
"The rise in local violent youth offending, gang-based drug dealing and incidents involving weapons has made YOT's work more complex. Its leaders are making more persistent efforts to rebuild the service to support children's specific needs."
Among areas highlighted for improvement were those involving girls, who make up 19% of the case load, and those at risk, including victims of exploitation.
"The rise in local violent youth offending, gang-based drug dealing and incidents involving weapons has made YOT's work more complex"
The report said that inspectors were concerned about the safety and wellbeing of a small number of vulnerable children.
It said the Youth Justice Board, which oversees the work of the YOT, is "under-developed and needs to step up".
Mr Russell said: "The board is made up of representatives from key agencies that can support children to move away from offending. Unfortunately the board failed to show us it understood the specific issues affecting these children and had a strategy to address their needs.
"The new chair has made a positive start and must now seize the opportunity to coordinate efforts and drive improvements."
Cllr Clive Johnson, Labour's shadow member for children's services, commented on the report.
He said: "It highlights some real positives and it is important for the administration to build on the clear commitment of staff to the young people they serve.
"However, there can be no hiding for the Conservatives: threats to outsource, failing budgets, the loss of wider services for children and a string of inspection failures have resulted in rising youth crime, the growth of gangs, rising violent crime among young people and children put at risk."
Cllr Josie Iles (Con), who is in charge of children's services at Medway Council, said: "Our YOT is an integral part of supporting young people who have found themselves on the wrong path to help break patterns of offending and start their journey to a more positive future.
"Whilst it is of course disappointing to have received an overall rating of ‘requires improvement’, it is worth noting that inspectors recognised a number of key areas in which the YOT works extremely well, with many areas individually being rated ‘good’, and our overall rating being just one point away from a more positive rating.
"The council also notes the improvements that have been made since the pilot inspection and the trajectory of improvement remains positive.
"I am disappointed that the Labour group fail to recognise the dedication and incredible efforts of the YOT’s staff."
Cllr Iles said the report also recognised "excellent case management and practitioners working well to understand the behaviour of children and young people and their aspirations for the future".
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