Its move follows concerns that it would be unfair to label the whole of a children's services department as inadequate when either education or social care received this judgment.
Respondents to Ofsted's consultation on integrated inspection, which also covered joint area reviews of all services for children, said this could reduce local services to the lowest common denominator and diminish staff morale.
Ofsted has removed a rule so that a third judgment can be made in such circumstances. "Inspectors will have to make a judgment on balance," said a spokeswoman. "It will depend on how good the good area is and how poor the failing one is."
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