The service, which merged with Connexions Greater Merseyside last year, was criticised on a range of issues including a lack of purpose in youth work sessions, insufficient resources for detached youth work, and a lack of knowledge of young people's needs.
Young people and youth workers were also poorly involved in decision-making.
Kieran Gordon, chief executive of Connexions Greater Merseyside, said: "We took over Halton Youth Service seven months before the inspectors came in, and the issues relate to the years of neglect prior to our involvement."
A spokesperson for Halton Borough Council said: "Since the transfer to Connexions, good progress has been made. We are devising an action plan to improve youth services."
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