A hospital for men with learning disabilities has been placed in special measures after there were "serious risks to patient safety".
The Care Quality Commission (CQC) inspected Cygnet Woodside, in Bradford, in September following allegations of abuse by staff towards a patient.
Police said they were investigating a report of an assault at the hospital on 31 August and had arrested two men.
The mental health hospital said it was taking action to address improvements.
Dr Kevin Cleary, CQC deputy chief inspector of hospitals and lead for mental health, said: "Our latest inspection of Cygnet Woodside found that the hospital was not ensuring its patients' safety."
He said there were "inherent risk factors and warning signs" including a high turnover of employees and an inadequate number of skilled staff looking after patients, which compromised care.
"The service showed warning signs that increased the likelihood of a closed culture developing. This would have put people at serious risk of coming to harm if we didn't take action," he said.
The CQC said senior leaders were not always fully aware of concerns in the service and "this included the concern relating to the allegations of abuse toward a patient which is being investigated by police".
'Suspended two employees'
Following the unannounced inspection, the commission also suspended the nine-bed hospital's current "good" rating for caring.
It has been given an overall rating of "inadequate" after a strong odour of urine, damaged walls and peeling paint on wards were also found.
Cygnet Woodside said it was "disappointed" with the CQC's assessment, that their report was "disproportionate" and "does not provide an entirely accurate representation" of the hospital.
A spokeswoman said it reported to police a "single safeguarding concern that was raised against a member of staff".
The hospital "immediately suspended two employees", she added.
Dr Cleary said there would be "further action to keep people safe" if inspectors saw insufficient improvement.
West Yorkshire Police said the arrested men were subsequently released under investigation but did not disclose the offence they had been held under.
Mencap, a learning disability charity, said the CQC report highlighted yet more concerns of inpatient units and called on the government for "the right support and housing in the community".