Charity, civil service and council representatives have said the damning Pressures on Children's Social Care report, published today by the NAO, highlights a mismatch between government policy, funding levels and local decision-making.
Central government policy needs to work to eradicate the "postcode lottery" currently faced by the most vulnerable, commentators said.
The NAO report states that government has "not yet done the work to tie together available sources of information" and therefore it is unlikely to achieve its target of giving all vulnerable children access to high-quality support, "no matter where they live", by 2022.
Jonathan Stanley, chief executive of the Independent Children's Homes Association, said that "devolving powers and practice to local authorities" had created problems.
Stanley added that yet another NAO report was pointing out the importance of a strategic plan.
"Providers now have sets of arrangements from local authorities that contradict each other," he said, adding that local arrangements "are not effective, in creating sufficiency of supply".
Association of Directors of Children's Services president Stuart Gallimore, said that cash-strapped councils are being forced to meet demand by axing preventative services that offer early help to families, creating "a false economy".
Gallimore warned that the "human and financial" costs being stored for the future were "huge".
He said: "We have worked hard to innovate and reshape our services to make savings and efficiencies but there is nowhere left to go now.
"The services we will have to cut in the next spending round are likely to make outcomes for children and families worse not better - this cannot be right."
Carl Les, children's services and education spokesman for County Councils Network, called for extra funding to help councils tackle the shortfall but agreed more insight was needed.
"The rise in demand for children's services is incredibly complex and cannot simply be put down to population increases," said Les.
"We want to work with government to fully understand what is driving demand."
Anne Longfield, the children's commissioner for England, called on the government to ensure its next spending review focuses on investing in early help to tackle rising demand.
She said: "At a time when budgets are squeezed and councils are under pressure, it is more important than ever that the DfE and local government identify the most vulnerable children before they reach crisis point and make sure they have measures in place to offer the support and protection they need."
Children's charities also called for more funding to avert harm.
"Behind these numbers lie vulnerable children in desperate need of support," said The Children's Society's director of policy and research, Sam Royston.
"Councils need more funding to prevent issues from arising and escalating, and ensure children and families get the help they need when this does sadly happen.
"Without it, more children will continue to be at risk of harm and there is a real danger that the life chances of hundreds of thousands of children will be damaged."
Action for Children's policy and campaigns director Imran Hussain added: "The government must act to close the growing gap between what children need and what current funding can deliver, otherwise more and more vulnerable children will be left at potential risk and without the services they desperately need."
Renuka Jeyarajah-Dent, deputy CEO of Coram, highlighted the "disproportionate rise in the number of children on child protection plans and being taken into care in comparison with the wider growth in population", set out in the report.
Jeyarajah-Dent said the report illustrates the "scale of the challenge" and the range of factors potentially behind local differences.
"Charities like Coram have seen the funding for vulnerable families declining," she added.
"Early help services are sometimes difficult to access and families are struggling to get the mental health services from the NHS that their children need.
"It is little wonder that problems escalate and more families end up not coping, resulting in more children needing to come into care."
On the other hand, young people in some areas are reporting their lives are improving, which Coram believes can be down to targeted initiatives.
Jeyarajah-Dent said: "Initiatives such as Coram Voice's Brightspots programme, which helps authorities to identify what they are doing well for children in care, and then supports the sharing of best practice, can help local authorities to provide children in care with a better quality of life."