Achieving for Children was established in April 2014 to run children's services in the neighbouring London boroughs of Kingston and Richmond, and expanded to a third borough, Windsor & Maidenhead, in 2017.
The ombudsman said it has uncovered evidence of children missing out on support and education in three separate cases in Richmond it has recently investigated, "giving cause for concern about systemic failures between the council and its provider".
In one case, a sixth former with mental health issues was repeatedly let down and missed out on her education because the council took too long to make the appropriate provision.
In another case, a primary school child with disabilities missed out on the support he needed because the council took nearly a year to complete his Education, Health and Care Plan.
In the third case, a teenager with SEN who was about to sit her GCSEs, missed out on a year’s education at a private special school because the council failed to tell her parents it had agreed to fund it.
The ombudsman said the council’s poor responses to its enquiries caused significant delays in the cases, with some of the events remaining unclear despite investigators spending significant time examining records.
When investigators visited the council to inspect case files, they found documents often named or filed incorrectly. The investigation found the council had three separate IT systems for managing information, one of which could only be accessed by a single member of staff. In one of the cases, investigators were only able to discover what had happened because the family had kept thorough records.
It has called on the council to complete an audit of all the children for whom the company appointed to run its SEN provision is responsible, in order to identify if others have been affected in the same way.
Michael King, local government and social care ombudsman, said: “The three cases highlighted in my report give rise to serious concerns that there may be systemic failures within the processes operated by the London Borough of Richmond and Achieving for Children.
“I have published this report in part because other families may very well be affected by issues similar to those I have raised.
“I have now asked the council to undertake a full audit of its education provision and report back to me about what it finds. If the council finds other children have been affected, it should take steps to ensure they do not miss out on the services they are entitled to receive by law.”
Richmond Council has agreed to pay the parents of the first child £1,500 for the delay and lost education provision, along with £500 for distress and a further £250 for their time and trouble in bringing the complaint.
In the second case, the council has already apologised and offered the family £4,400 to reimburse the cost of a psychology report the family had commissioned. It has also agreed to pay them a further £1,500 for the loss of SEN provision and £250 for their time and trouble.
The council has agreed to pay the third family £8,600 to make up for the loss of education provision and for distress, along with a further £500 for the time and trouble caused.
Ian Dodds, director of children’s services for Richmond Council, said providing high-quality SEND support is a priority for Richmond Council and Achieving for Children.
However, he warned that implementation of the government's 2014 SEND reforms had been an "enormous challenge for all local councils, particularly in a context of increasing need for support and raised expectations without adequate government funding to support their effective delivery to all the children and families who need them”.
“The [ombudsman's] report is accepted in full and clearly shows that there were significant failings for some children and young people between 2016 and 2017,” he said.
“This does not reflect what I want to see in place for every child and young person. It does show that Richmond Council and Achieving for Children were slow to recognise the increased demands of the 2014 Act and our sincerest apologies have been extended to the families of the children and young people the ombudsman has reported on.
“Since the period of the ombudsman’s investigations, much has been achieved and significant investment has been made locally. There is new leadership in place and a renewed commitment to continuous improvement of local SEND services through our SEND Partnership Board."
Last year a damning report by the National Audit Office warned that SEND support "is not, on current trends, financially sustainable", calling on the government to take urgent action to adequately fund the system.
The government has said it will carry out a review into the SEND system and has promised to increase funding in 2020/21 for pupils with the most complex needs.