The family justice system is in crisis, fuelled by an “untenable” workload created by a glut of applications to take vulnerable children into care, the senior judge about to become the next head of the family courts has said.

Sir Andrew McFarlane, who takes over as president of the family division of the high court of England and Wales in July, questioned whether the courts saw too many cases that may not be sufficiently serious enough to warrant the breakup of families.

McFarlane said the courts had to be careful to ensure that the increase in cases that sat relatively low on the spectrum of harm, such as those involving child neglect and poor parenting, properly met the high legal thresholds justifying intervention by the state.

The courts may be in danger of “slipping into the exercise of a broad benevolent discretion” and intervening on behalf of children who were “generally in need” rather than asking whether the conditions for removal from their parents had been strictly met, he said.

“It may properly be said that we have reached a stage where the threshold for obtaining a public law court order is noticeably low, whereas, no doubt as a result of the current financial climate, the threshold for a family being able to access specialist support services in the community is conversely, very high,” he said.

McFarlane’s comments came as he helped launch the Care Crisis review, an independent study of the child welfare and family justice system in England and Wales carried out by a group of senior lawyers, social workers, charities and academics.

The review found that the system in England and Wales is in crisis, overstretched by spiralling demand and diminishing resources, dominated by a suffocating culture of “shame and blame” in social work practice, and undermined by austerity cuts and rising poverty.

The number of care applications reached record levels in 2017, it noted, while the number of children looked after in the care system was at its highest since 1989. There are around 73,000 children in the care system, up from 60,000 a decade ago, and cash-strapped local authorities are struggling to keep pace financially.

“Many professionals described the frustration they feel at working in a sector that is overstretched and overwhelmed and in which, too often, children and families do not get the direct help they need early enough to prevent difficulties escalating,” the report said.

“There was a palpable sense of unease about how lack of resources, poverty and deprivation are making it harder for families and the system to cope.”

The review set out 20 options for reforming the system, including a call for the government to review the impact of poverty and cuts to social security benefits on care applications, and a recommendation that ministers meet the estimated £2bn shortfall in children’s social services budgets.

It said several complex and overlapping factors were driving the rise in children entering care and care proceedings, including rising family poverty and destitution linked to welfare reforms, and cuts to council support services for families struggling to cope.

Social workers were hampered by an “increasingly risk-averse” culture, it said, and often felt under pressure to play safe by taking a child into care rather than trying to work to keep the family together, because of a fear of media vilification in the event that the child is injured or killed.

The review was set up by the Nuffield Foundation and the Family Rights Group charity after comments made two years ago by the current family division president, Sir James Munby, that relentless rises in care applications had plunged the family courts into crisis, with no clear solution in sight.

McFarlane said Munby had been fully justified in labelling the increase in care applications a crisis, and “was plainly right to blow the whistle” when he did. “I too am clear that this is a crisis and I am extremely concerned to see that it is by no means abating,” he said.

Munby, who sat on the advisory body of the review alongside McFarlane, described it as “a fundamentally important report whose insights and recommendations must inform policymaking and decision-making, especially by government ministers and local authority directors of children’s services, if we are to have any chance of meeting the ongoing care crisis.”

Richard Watts, the chair of the Local Government Association’s children and young people board, said: “The crisis facing children’s services goes beyond providing vital support to a record number of children in care. In addition, councils are also now starting more than 500 child protection investigations every day on average, and have a child referred to them every 49 seconds on a daily basis.”

A government spokesperson said: “We want every child to be in a loving, stable home that’s right for them. In most cases children are best looked after by their families and children are only removed as a last resort.

“Vulnerable children and families rely on the hard work of social workers, which is why we are continuing to attract high-quality recruits to the profession and setting high standards for the knowledge and skills they need. We are also rolling out a new assessment and accreditation system and establishing a new dedicated regulator so that all vulnerable children and their families get the right support.

“We have made more than £200bn available to councils for local services, including children’s services, up to 2020 and we are improving children’s social care through a £200m innovation programme. As the report points out, many of these projects are doing effective and innovative work with families who are at risk of breakdown.”