Ofsted found a number of areas of "significant weakness" concluding that, as a result, children and young people's needs are not identified, assessed and met in an effective way.
The regulator, along with the Care Quality Commission, inspected SEND services provided by the council and South Tyneside Clinical Commissioning Group (CCG) in June, and has demanded the council produce a written statement of action to address their concerns.
Inspectors highlighted problems with the quality of education, health and care (EHC) plans and the frequency with which they were reviewed. The involvement of education, health and social care professionals in the development and review of EHC plans was also too variable.
The regulator found that strategic, needs-led joint commissioning has not been fully developed or embedded and there are "unacceptably" long waiting lists for some services.
- Increased demand for EHC plans exacerbates SEND funding crisis
- Securing support for children with SEN
Council leaders were also criticised for not fully understanding the impact of the local area's provision on the experience and outcomes of children and young people with SEND and their families.
Co-production and engagement and communication with parents was found to require development.
Arrangements for meeting the needs of 16- to 25-year-olds with SEND and improving their outcomes, especially in preparing successfully for adulthood, were judged to not be fully effective.
However, Ofsted did note that "committed" frontline professionals "go the extra mile and make a valuable difference to children and young people with SEND and their families".
Also, despite gaps in commissioning, some children and young people do access high-quality services that make a positive difference to the outcomes they achieve.
Ofsted also acknowledged that in the past 12 to 18 months, there has been more focus on the SEND agenda in South Tyneside.
A spokesperson for South Tyneside Council and South Tyneside CCG said that education, health and social care services acknowledge the issues highlighted in the report and are "fully committed" to working together to improve provision and outcomes for children and young people.
"An improvement plan is well underway. Our scrutiny committee had already identified SEND as an area for improvement and a review was launched in October 2018. This work is being prioritised by all organisations involved to ensure a clear focus on improving standards and addressing the concerns highlighted. There are already firm plans in place to improve.
"We will be increasing our resources across the partnership to support children and young people with SEND. Planning is already underway to involve South Tyneside's families in developing the local offer and access to services, and plans are being brought forward to increase provision for children with social, emotional and mental health needs."
The spokesperson added that demand for SEND services is increasing, with the number of children with EHC plans almost doubling since 2015 in South Tyneside.
"The government has acknowledged the chronic underfunding in SEND having recently announced an extra £700m for SEND support nationally. We wait to see how that is distributed across authorities.
"Despite our restricted financial position, we are absolutely clear that services need to improve significantly and rapidly so that children and young people in South Tyneside have their needs met and are properly supported.
"We are on a journey of improvement. The needs of the borough's children are paramount, and we will work hard to ensure the services we provide to our children and their families are of the highest standard."