An inquiry report found that hundreds of children were sexually abused by predatory foster carers and children's home staff over more than five decades, under the watch of Nottingham City and Nottinghamshire County councils.
Some foster carers were able to carry on looking after vulnerable children even though they were "known perpetrators", the inquiry found.
Council staff were too willing "to take the side of the foster carers and to disbelieve the child", the report states.
County councillors were guilty of a "serious failure of scrutiny and governance" because they "did not question the scale of sexual abuse or what action was being taken".
Criminal prosecutions spanning the late 1970s to this year have seen 16 residential staff and 10 foster carers convicted of sexual abuse of children in their care.
While the report's recommendations are primarily aimed at safeguarding in Nottinghamshire, they have wider implications for councils.
The report states: "Other local authorities should consider the issues identified in this report and take action as appropriate to their own circumstances."
The two recommendations are to assess potential foster carer risk in relation to the sexual abuse of children and to commission an independent review of practice relating to harmful sexual behaviour.
The first recommendation also states that any concerns which arise should be referred to relevant agencies including the Disclosure and Barring Service, the local authority designated officer or equivalent, the fostering panel and the police.
The second recommendation states that the evaluation of practice should include "responses, prevention, assessment, intervention and workforce development".
It adds: "An action plan should be set up to ensure that any recommendations are responded to in a timely manner and progress should be reported to City's Safeguarding Children Partnership."
The Association of Directors of Children's Services and the Local Government Association have been approached for comment on the wider implications for councils.