The explosion in demand for special educational needs (SEN) support is threatening English county councils’ ability to meet their legal duties.
The number of support plans they have to meet by law has risen by a half since 2014, the County Councils Network said.
A survey of its 36 councils found SEN budgets overspent by at least of £123m for 2018-19 alone.
The government says its investment into these budgets is significant.
Since 2014, councils have had to support 19- to 25-year-olds with special educational needs, as well as those of school age.
And this is one of the reasons for a 48% rise in the number of plans, EHCPs, setting out the care and support to which young people are legally entitled.
But in some of the 27 county council areas who replied, the increase in demand was much greater.
For example in the East Riding of Yorkshire demand rose 90%, in Somerset it rose 87% and in Kent the rise was 71%, the network said.
Councillor Carl Les said the 2014 changes had caused costs to spiral out of control.
“As this huge increase in demand is unfunded, the cost burden has come from other service areas,” he said.
“Counties already face a funding gap of £21.5bn over the next five years – and if we continue to overspend at the level we have done, it will break many of our budgets.
“Many councils in the future may be unable to set a balanced budget, whilst others will have to reduce other budgets further, which would run the risk of not being able to deliver statutory duties.
“It is clear that the current system is not working effectively when nearly two-thirds of councils nationwide over the past year are not reaching the expected level of service in their special educational needs departments.”
A Department for Education spokesman said: “We know that costs are rising in areas of the country, which is causing challenges for local authorities, and we are aware of the pressures on school budgets more generally, including the increasing costs of making provision for children with more complex needs.
“We are looking carefully at how much funding for education will be needed in future years, as we approach the next spending review.”
He added that high needs funding for children and young people with the most complex needs had also been increased, from £5bn in 2013 to well over £6bn this year. In December, an extra £250 million was pledged.
A spokeswoman for campaigning group SEND action said the county councils’ warning was extremely concerning.
She highlighted how the network acknowledges that two-thirds of councils have already failed to reach the expected level of service in SEND provision over the past year.
She added: “On June 26 three disabled children and their families took a judicial review against the Secretary of State for Education and Chancellor over the government’s SEND funding policy.
“The government’s barrister argued that where local authorities have statutory duties towards Paul (disabled children), then they must rob Peter to pay Paul.
“It shouldn’t be necessary to “rob” anyone to secure disabled children’s legal rights.
“The government put in place reforms that councils are legally responsible for implementing, but did not provide sufficient funding.
“Now councils are saying SEND duties are breaking their budgets.
“The reality is that disabled children and their families are being broken by an underfunded and dysfunctional SEND system which frequently fails to meet basic statutory duties.”