Northamptonshire County Council needs to make £60-70m worth of savings in 2018/19 and is currently under threat of being axed due to its financial plight.
The government has recommended the local authority be split into two separate authorities and has also banned it from any new spending, except on safeguarding vulnerable children and adults.
"It is important to recognise that the move to two unitaries could also be a major disruption," states the report.
"Many of the current partnership structures are county-wide. This creates risks that the move to two unitary authorities increases the operational layers beneath county-wide partnerships, creating a burden on partners in health, police and the voluntary sector.
"There are some specialist and strategic key services that might operate better across the area due to their size, their skills (or difficulty recruiting).
"Consideration will need to be given to this during detailed design work - for example, assessing the safest arrangement for adults' and children's safeguarding, as well as some services that act as a bridge between hospitals and community services and work at a cross-county level."
The report says that specialist provision for disabled children in care, virtual school heads and educational psychology could also be hampered by reorganisation.
"It can be argued that moving to two unitary authorities reduces resilience," says the report.
"For the aspects of the existing county services that are not organised on an area basis, two teams will need to be created where there is currently one. For example, in children's services, virtual school, educational psychology and children with disability social workers are specialist services organised county-wide."
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The report also highlights the scale of problems already affecting children's services in the county, particularly around increasing demand and stretched funding.
Spend on children in care in Northamptonshire is the highest per head of 0-19 population among English counties in 2017/18 and the third highest per child in care.
The county is the ninth most deprived in England and has high numbers of unaccompanied asylum-seeking children, adds the report.
It is estimated that the number of under-19s is set to increase in the county at a higher rate than the national average by 2021, putting growing demand on children's services, such as school transport and social care, adds the report.
Population growth among 10- to 14-year-olds by 2024 is also high.
"This will be significant for a children's service that already has an increasing number of children in care; on education, health and care plans; has high costs for home-to-school transport; and the added pressure of high numbers of unaccompanied asylum-seeking children," adds the PWC report.
The report is due to be discussed at a council meeting on 28 August.
Earlier this month, the Conservative-controlled council discussed a recovery plan which put forward proposals for dramatic cuts to services, including those for vulnerable children.
Children's services were rated as "requires improvement" when last inspected by Ofsted in April 2016.
It plans to transfer children's services to an independent trust called Children's First Northamptonshire by April 2019.