Looked-after children and those with disabilities are not having their needs properly assessed in some areas, inspectors said in a review of children's services in almost 140 councils.
There is praise for the majority of local authorities, with 107 out of 139 making at least a good overall contribution to children's education, health and safety.
But for a significant minority of children, the provision is not good enough. "Authorities need to do more to redress this inequity," the report said.
In weaker authorities, thresholds for access to social care are set too high and there is a lack of placements for looked-after children, it was found.
There are also delays in completing assessments.
"The biggest challenge (for local authorities) continues to be narrowing the gap in opportunities and outcomes between most children and young people and those that are the most vulnerable in our society," the report said.
Support for poorly performing schools is good in the majority of areas, with strong intervention bringing rewards for children, inspectors said.
Poor levels of attendance, behavioural problems and high levels of exclusions are stopping children from achieving in weaker areas.
For young people not in education, employment or training, there is insufficient support and an inconsistent quality of post-16 provision in some parts of the country.
Inspectors said councils with strong partnerships with other agencies provided the best opportunities for young people.