Local authorities in England now spend more than pound;500million every year placing complex special educational needs pupils in specialist institutions outside their own schools.
According to an Audit Commission report published this week, the average annual cost per pupil had reached pound;57,150.
Although councils had made progress in supporting children with complex needs in recent years, the full costs were often unknown and many local authorities had not challenged the fees.
"Ultimately this means that some councils are being charged increasing amounts for provision that may not be the most appropriate for an individual child," the commission said.
Les Lawrence, chair of the Local Government Association's children and young people board, said the report did not fairly represent councils'
drive to help children with special educational needs.
"They still have a long way to go to develop integrated programmes but, like so many areas of state support, councils cannot deliver the services in isolation," he said.