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Despite belt-tightening to claw back a £6m budget overspend last year, Kent social services have "very promising prospects of improving services", government inspectors have concluded.

But the department, which is praised in a new joint review report as a "vanguard of new thinking and innovation", has also been warned that its ambition to improve could outstrip its capacity to deliver unless new initiatives are prioritised.

Inspectors from the Social Services Inspectorate and the Audit Commission who visited Kent in January and February this year raised concerns about an imbalance in the level of service available in the east and west of the county, and about Kent's purchasing relationships with smaller service providers.

The department should give "a higher priority to locality planning, spelling out its purchasing intentions at a level to which smaller providers are able to relate," the report says. "Agencies remain confused about where the commissioning authority lies in the council."

The department is praised, however, for staff commitment and high morale despite a recent succession of major challenges, including flooding, an unprecedented influx of asylum seekers and a significant budget overspend.

Inspectors also credit Kent for placing nearly 80 per cent of looked-after children in foster care, and for initiatives in child and adult care.

Director of joint reviews, John Bolton, said: "Kent faced some very challenging tests in the time leading up to this review, but they met these with resilience and innovation. Long-term improvement will rest on prioritising initiatives and making some tough decisions to ensure the capacity is there to deliver."

Kent's director of social services, Peter Gilroy, said it was a just reward for social services staff that Kent had been placed among the best performing authorities in the country.

"The report has also been helpful in pointing out some areas of service that need improvement, which we are taking very seriously," he added. "These are already being addressed through an action plan that has been drawn up to ensure that we continue to improve."