Speaking in parliament, Communities Secretary Eric Pickles said Casey will probe the authority on its governance, its work with children and young people, and how it licences taxis and private hire vehicles.
Her remit includes looking into whether the council “covers up” information, whether “institutionalised political correctness” affects decision making on sensitive issues, and whether the authority is taking the necessary steps to address past weaknesses.
News of the government investigation follows a report commissioned by Rotherham Council, published last month, which estimated that 1,400 children were sexually exploited between 1997 and 2013, and was highly critical of the response of authorities.
Casey will also examine links between Rotherham Council and the police and justice system.
And she has been asked to draw out any lessons that could be useful to other local authorities or service providers across the country.
Casey will report to Pickles by 30 November.
Pickles said: “I have appointed Louise Casey to carry out this sensitive task rigorously and independently.
“I am confident that with her track record of working in public service and particularly in challenging established practices in regard to the most vulnerable – for example, in reducing rough sleeping, as commissioner for victims and witnesses and in her current role as head of the Troubled Families programme – she has the experience and skills to undertake a robust and independent inspection which will provide a full and comprehensive report on these matters.”
Pickles added that should Rotherham Council be found to be failing to fulfil its statutory duties under the Local Government Act 1999, he will consider government intervention.
He said intervention could take “a number of forms”, including directing the authority to take certain actions, or taking responsibility for certain functions of the authority himself, or handing them to a commissioner.
“We cannot undo the permanent harm that these children have suffered,” Pickles said.
“But we can and should take steps to ensure that this never happens again and make sure that all local authorities deliver on their essential duty to protect vulnerable children.”