Buckinghamshire County Council, which last year said it was "proud" of how it handled the case, said it now accepted "serious mistakes" were made. Its social services director, Jean Jeffery, is to take early retirement.
Residents of two private homes run by Gordon Rowe and licensed by the council endured mental, physical and sexual abuse over a period of more than a decade.
But although complaints were made, many families of the residents knew nothing of the scandal until 1994 when The Independent exposed a secret report into the offences.
Yesterday, the nine-month inquiry - ordered by the Government after Buckinghamshire refused to act - concluded with 95 recommendations to ensure such a tragedy did not happen again.
Among them was a plea for those who harm or exploit vulnerable adults to face up to 10 years in prison instead of the current maximum penalty of two years.
The report also proposed tighter regulations for the registration and inspection of residential care centres and of day services for people with learning disabilities.
Other local authorities should also take note, added Dr Philippa Russell, a community care adviser to the report.
The inquiry team, led by Tom Burgner, a former senior civil servant, found "serious mistakes" were made by the council and its inspectors concerning the homes run by Gordon Rowe and his company, Longcare.
Inspectors failed to investigate concerns raised as early as 1983 when Rowe first applied for registration and again from 1991, when the council began receiving complaints. "The abusive regime at Longcare should have been exposed and ended earlier," Mr Burgner concluded.
The report gives much support to families who argued that the council should never have allowed Rowe a licence because of complaints made at his previous workplace in Somerset, and that it should have been withdrawn when the new complaints were made.
Although progress has been made, Mr Burgner said Buckinghamshire's policies were still flawed. "The greatest single weakness in Buckinghamshire's services for people with learning disabilities is the absence of strategic direction and visionary leadership within social services and jointly with other key agencies."
Mr Burgner said openness, vigilance and support for staff who blow the whistle on poor practice were needed to protect such residents.
The report also stressed the importance of co-ordination with agencies, including health officials and the police.
Detectives who originally investigated the case did not consider charges under the Mental Health Act, although convictions were eventually secured under that legislation.
Up to 50 residents of Longcare, some with a mental age of three, are thought to have suffered abuse, ill-treatment or neglect at the hands of Gordon Rowe, his wife, Angela, and some staff. Rowe committed suicide before he could be charged with offences including rape. Mrs Rowe was jailed for two and a half years.
Yesterday Richard Worrall, the new chairman of the social services committee, said: "When I meet [the families and residents] I want to say to each and every one of them I am very sorry for what you have gone through."
But he said implementing the recommendations would require funding at a time when the authority was facing making cuts to services.
Paul Boateng, the health minister, said he expected Buckinghamshire to act on its "unacceptable failures".
Leading article, Review, page 3
Recommendations for the council and for government:
- A new criminal offence of causing harm to or exploiting a vulnerable adult with 10 years' imprisonment maximum penalty.
- All complaints to be investigated as a requirement of Registered Homes Act 1984.
- Staff making complaints should receive protection.
- Inspection unit to produce standards for residential homes for people with learning disabilities.
- Tougher checks on applicants seeking to register to run homes.
- Adult protection committees to be set up to coordinate action.Reuse content