Council finance bosses facing a budget shortfall of more than £3m have been criticised by inspectors.
Northampton council is faced with a budget shortfall of £3.15m
The Audit Commission has branded financial management at Northampton Borough Council "poor" because it lacks leadership and has limited expertise.
The report accuses politicians of "undermining" improvements to services called "among the worst in Britain".
Leader Tim Hadland calls for a "massive turnaround" and the opposition said electors would judge performance next.
The Audit Commission report said: "Northampton Borough Council has made little progress since 2004 and has deteriorated in some key areas such as planning.
"Its weakest services continue to be among the worst in the country and weak political leadership is undermining improvement.
"Managerial leadership is inadequate and there is no stable and cohesive senior team.
"A vision is beginning to take shape and priorities are emerging but it has not yet been agreed with key partners.
"New finance systems have not yet been put into place to monitor spending accurately and the council has no clear picture of the likely out turn for the current year."
Mr Hadland, leader of the ruling Conservative Group, said: "This is clearly a disappointing report. It acknowledges that a great deal of work remains to be done.
"The inspectors have set out some time-critical actions that we must take, such as setting a balanced budget, and we intend to take those actions.
"There remains a need for a massive turnaround. It will clearly be a challenge but we know from the experiences of other councils that it is possible to do this.
"For now, we intend to strengthen our leadership, strengthen our focus on our recovery and bring about much needed change."
Leader of the Lib-Dem opposition Tony Woods said: "It is blatantly obvious that Northampton Borough Council has been failing for a number of years and its financial management is inadequate.
"It comes as no surprise that the Audit Commission states the council lacks clear political leadership but they must bear some of the blame.
"The council was subjected to 19 inspections in 2006 and this has intruded into the work on improvements."
He also said the next inspection of the ruling group's performance would come from the electorate.