A thematic report by Ofsted, HMI Constabulary and Fire & Rescue Services, the Care Quality Commission and HMI Probation, found that much has been done by many local partnerships across the country to deal with child sexual exploitation, but learning must be used to successfully tackle other forms of exploitation.
"All children are vulnerable to exploitation, and agencies, locally and nationally, do not yet fully understand the scale or level of risk to children," the report states.
County lines crime occurs when individuals or gangs use vulnerable children and adults to transport and sell class A drugs primarily from urban areas into market or coastal towns or rural areas, establishing new drug markets or take over existing ones.
Perpetrators also use children to transport and hide weapons and to secure dwellings of vulnerable people in an area, so that they can use them as a base from which to sell drugs.
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Other forms of criminal exploitation considered by the report included instances where children were coerced to, for example, work on cannabis farms or commit theft, as well as non-physical grooming of children through technology.
The inspectors found cases of children caught up in such situations being subject to sexual violence, stabbings and being killed by rival gangs.
The report findings are based on joint targeted area inspections of practice in three local authority areas, Greenwich, Southend-on-Sea, and Dorset.
Inspectors visited children's social care, education, health services, the police, youth offending services and probation services, and found children of all circumstances being made victims of exploitation. Examples included gangs grooming affluent children attending public school, as they were less likely to be identified by police.
The inspectors said poor intelligence sharing between agencies is resulting in services responding inadequately to the issue, and have recommended that agencies follow a "whole-system" approach to tackle the problem.
The report also recommends that professionals receive better training to ensure they see children as victims, not perpetrators of crime, they can recognise behaviour that indicates exploitation, and that they share information more quickly between agencies.
"Children who were once captain of their school football team, musically gifted or academically excelling may lose interest in activities that were once very important to them," the report states.
"Recognising the signs of criminal exploitation is crucial."
Ofsted national director for social care Yvette Stanley said agencies needed to be able to work "quickly and effectively".
"Children who are being exploited cannot wait for agencies that are lagging behind or failing to recognise this issue," she said.
"In responding to this dangerous situation, we must not repeat the mistakes of the past, where some partners were too slow to recognise the risk of child sexual exploitation in their areas, or somehow felt that it ‘doesn't happen here'."
The report follows a report published jointly by the inspectorates in 2016, Time to Listen, which reviewed joined-up responses to CSE and missing children.
Earlier this week the Home Office announced £18m of funding for 29 youth projects aiming to divert children and young people away from violent crime over two years in England and Wales.
