An inspection of Brent Council, which took place between 14 September and 8 October, found that work with children and young people who have been missing from home or care is not good enough and is not well integrated with work to tackle child sexual exploitation.
Meanwhile, although the stability of placements for children in care was found to be improving, it was still below the average for similar councils.
"There is insufficient capacity across the range of placement options to ensure that the needs of all children and young people are met," the report states.
The report adds that initial decisions to place children in care out of area are "not always made at the right level of seniority".
"Children’s services in Brent require improvement to be good," the report states.
"Although strong and focused leadership has led to the achievement of a number of important improvements in the quality of services, the local authority is not yet delivering consistently good services for children and young people."
However the report did highlight improvements achieved since the last inspections of child protection services and safeguarding and looked-after children services in 2012 and 2011, which included improved assessments and a stronger focus on the voice of the child, more manageable caseloads, and an increase in the amount of time social workers spend with children.
There was also found to be a significantly improved focus on assessing and meeting the health needs of looked-after children, and the adoption service had been strengthened.