Rotherham council is to come under central government control after an independent inspection of its handling of child sexual exploitation concluded it was not fit for purpose and was more concerned about protecting its own reputation than its most vulnerable citizens.

The cabinet of Rotherham metropolitan borough council (RMBC) immediately announced their intention to resign en masse in the wake of Louise Casey’s scathing report commissioned by the communities secretary, Eric Pickles.

The council leader, Paul Lakin, said he would quit both as leader and councillor. He could and should have done more to prevent child sexual exploitation (CSE) when he was in charge of children’s services, Casey’s report said.

Casey report into child sexual exploitation in Rotherham: Susie’s story Read more

On Wednesday Pickles ordered commissioners in to take over the council pending new elections in the borough next year to “renew” its leadership, as the National Crime Agency announced plans to investigate criminal allegations stemming from the latest inspection.

The cabinet resignations came after Casey, the government’s lead official on troubled families, said the council lacked “the necessary skills, abilities, experience and tenacity within either the member or senior officer leadership teams”.

Concluding that the council needs a fresh start, Casey’s 154-page report said: “The council’s culture is unhealthy: bullying, sexism, suppression and misplaced ‘political correctness’ have cemented its failures.

“The council is currently incapable of tackling its weaknesses without a sustained intervention.”

She also criticised the council’s deep-rooted culture of suppressing bad news and ignoring hard issues, writing: “RMBC goes to some length to cover up information and to silence whistleblowers.”

Facebook Twitter Pinterest Communities secretary Eric Pickles speaks in the Commons about the Rotherham report. Photograph: PA

Her “reluctant” conclusion was that “both today and in the past, Rotherham has at times taken more care of its reputation than it has its most needy”.

Pickles’ response was to tell parliament he had put together an intervention package which was “designed to give the council the new start it needs and to put an immediate end to the council’s ongoing service and governance failure”.

This would temporarily outsource all the duties of the “current wholly dysfunctional cabinet” to commissioners, he said, who would take responsibility for all executive functions of the council, including children’s and young people’s services and adult care services, as well as taxi licensing. Pickles said he would also be making an order under the Local Government Act 2000 to compel Rotherham council to hold all-out elections in 2016 and every fourth year thereafter.

The Casey inquiry was commissioned following the publication last August of another report by social worker Alexis Jay, which said blatant collective failures by the council and police had led to the sexual exploitation of at least 1,400 children in Rotherham over a 12-year period.

Yet 70% of current Rotherham councillors, including cabinet members, dispute Jay’s findings. One told Casey’s team: “I would challenge lots of the Jay report, we feel bruised by it. Where is our right of reply? Who is fighting our corner? People are rolling over and just accepting [it].”

Denial of child sexual exploitation in Rotherham remains a serious problem, said Casey. “We have concluded that the 1,400 figure is a conservative one and that RMBC and South Yorkshire police (where some also dispute the figures) would do better to concentrate on taking effective action rather than seeking to continue a debate about the numbers.”

Casey said she considered it an uncontested fact that children in Rotherham were “sexually exploited by men who came largely from the Pakistani heritage community” and that not enough was done to acknowledge this, stop it happening, protect children, support victims and apprehend perpetrators.

Yet on arriving in Rotherham she found a council in denial. “They denied that there had been a problem, or if there had been, that it was as big as was said. If there was a problem they certainly were not told – it was someone else’s job. They were no worse than anyone else. They had won awards. The media were out to get them.”

Casey found that council staff and councillors lacked the confidence to tackle difficult issues “for fear of being seen as racist or upsetting community cohesion”.

She added: “By failing to take action against the Pakistani heritage male perpetrators of CSE in the borough, the council has inadvertently fuelled the far right and allowed racial tensions to grow. It has done a great disservice to the Pakistani heritage community and the good people of Rotherham as a result.”

Some of Casey’s interviewees talked about a historical context in which RMBC was concerned not to do anything that might be seen as offensive to a minority community. “We weren’t allowed to hold forums near pubs because it might upset the Muslim people … Muslim colleagues thought this was silly,” said one former officer.

A current serving officer said: “[The politicians] wanted to use any other word than Asian males. They were terrified of [the impact on] community cohesion.”

Others complained of sexist and bullying behaviour across the organisation. “One mayor said that in his year of mayoral office it was his right to kiss all the pretty ladies in the office. I remember thinking ‘this is so Rotherham’,” a former senior officer said.

The former council leader Roger Stone was said to have presided over a “macho” culture, with one colleague telling inspectors: “It was common knowledge that he wasn’t a fan of female councillors – although he’s not against women, he just sees councillors as being men.”

Stone resigned in August the day the Jay report was published. He declined to talk to Casey or her inspection team, as did Shaun Wright, the former police and crime commissioner for South Yorkshire.

Wright, who was the councillor responsible for children’s services during part of the period covered by the Jay report, became headline news when he refused to resign following the Jay revelations, despite the prime minister and home secretary, as well as victims, demanding he do so. He only reluctantly stepped down weeks later.

The new report also criticises some councillors for failing to set an example to the people they serve. Three councillors failed to pay their council tax until threatened with court action, according to Casey. The former deputy leader, Jahangir Akhtar, received a court summons and had a liability order issued against him for non-payment. “This cannot possibly be seen as setting the high standards rightly expected of those in public life,” notes Casey.

Though her report focused on failures in RMBC, Casey reserves some opprobrium for South Yorkshire police. “There seemed to be lawlessness in relation to CSE in Rotherham. Perpetrators seemed to face no consequences. Nor were their activities disrupted,” she wrote.

The report gives a number of examples of insensitive policing, such as the officer who consoled one victim by saying: “Don’t worry – you aren’t the first girl to be raped by XX and you won’t be the last.”

The Independent Police Complaints Commission is already looking into CSE policing in Rotherham. The watchdog is currently investigating 10 officers and has received 20 further complaints, said a spokesman.

On Wednesday the National Crime Agency confirmed it would be examining “a number of potentially criminal matters identified during a recent inspection of Rotherham metropolitan borough council”.

RMBC has 14 days to respond to the Casey report before the commissioners will be sent in.

Tendering their resignation on Wednesday, the council cabinet said in a statement: “[Casey] clearly has no confidence in the current political leadership of Rotherham borough council.

“As a cabinet, whatever the details, as the political leadership of the council we must take responsibility. We therefore announce our intention to resign our positions as soon as transitional arrangements can be put in place.”

Paul Lakin, the outgoing leader, was described in the report as “a decent, committed and hardworking councillor” who was poorly served by his officers. But Casey’s team said that when he was the lead member for children’s services from 2010 to 2014 “he could, and should have done more, sooner” about CSE in the town.

In a statement the council said: “Cllr Paul Lakin has confirmed his resignation as leader of Rotherham borough council with immediate effect. He will also stand down as local councillor for Rotherham’s Valley Ward.”

David Greenwood, a solicitor representing dozens of Rotherham victims, said: “The report inevitably means that the case against Rotherham council is strengthened. My aim is to improve the quality of life for girls affected by CSE. They should be able to complete their education, have help with housing and counselling support.

“It is shocking that the inspector found that the characters in positions of power in the council allowed this to happen for so long and ignored and impeded investigations which would have led to the prosecution of perpetrators.

“The dysfunctional nature of the council left safeguarding procedures unmonitored. We should not lose sight of the inaction of the police in many instances. My aim is to bring the council and South Yorkshire police to account for their failings.”

Rape convictions

Five men from Rotherham were convicted for rape and other sexual offences in November 2010 after a two-year-long police operation in the town. The investigation, Operation Central, culminated in a trial that was described by Louise Casey in her report as “extremely traumatic” for the girls who gave evidence. The jury heard that the men developed relationships with three teenage girls, having sex with them in cars and parks in the Rotherham area.

Zafran Ramzan, 21, was jailed for nine years after being found guilty of raping a 16-year-old girl in her own home and two counts of sexual activity with a child. The other four men were convicted of sexual activity with a child. Razwan Razaq, 30, was jailed for a total of 11 years and Umar Razaq, 24, for four and a half years. Both Adil Hussain, 20, and Mohsin Khan, 21, were sentenced to four years in prison. Handing down the sentences, Judge Peter Kelson described the men as sexual predators.

Three other men were cleared following the case.

As Operation Central was winding up, South Yorkshire police began a new investigation, discussing intelligence on an Asian man linked to 18 girls as well as three other males. It was alleged that one of the girls had had “a gun put to her head” by her abusers, according to Casey’s report. However, as the investigation proceeded it was decided that some of the girls deemed most at risk would be placed in care. As a result, the girls refused to participate in providing evidence and the police investigation swiftly collapsed.