the amount of funding passed on to schools for special educational needs makes little difference to quality, a report by the auditor general of Wales, Jeremy Coleman, has concluded.

And his office suggests that the more money councils hold on to, the more it is able to manage the SEN workforce effectively.

Huge differences of between 23 and 79 per cent for SEN money delegated to schools was found during the investigation by the Wales Audit Office as part of a major review into SEN provision.

Heads traditionally claim they should have more money for provision, with many saying local authorities don’t give them enough. But the audit office argues the reverse, saying that problems are down to ineffective management.

The office wants schools to become more accountable for how they spend SEN money and for councils to be more cost-effective.

The Assembly government estimates that almost pound;300 million was spent on SEN in schools by Wales’s 22 local authorities during 20067 an increase of 10.4 per cent on the previous year.

Budgets in the area are the fastest growing in education, according to the report. But the research, commissioned by the Assembly government for an earlier SEN review, found that LAs were unable to tell if spending was cost effective because of a lack of data or direction, although there were pockets of good practice.

LAs still spend only between 10 and 16 per cent of their education budget on SEN. And budgets varied greatly over the education year, between pound;444 and pound;790 per pupil in maintained schools.

Mr Coleman said: “Millions of pounds are being spent on children with special needs but it is difficult to know how much is being spent wisely. There is a general need to tighten up the way funding is planned, monitored and reported.”

The Assembly government said: “We welcome this report, which makes eight recommendations, six for the Welsh councils and two for the Assembly government. It will help us to develop guidance for local authorities on managing SEN funding.”

The Wales Audit Office, which worked closely with Estyn, found that councils handling more legally binding pupil statements spent more but did not appear to offer better quality. The office also criticises the way budgets reflect the previous year’s spending.

It says expenditure is often well over budget and planning tends to target the overspend. Unforeseen increases in the number or cost of out-of-county places was often a cause of over-spending. One of the report’s main calls was for more Welsh councils to collect data about the progress of SEN pupils so it can be analysed by school, type and severity.