The Audit Commission described SEN support as "inequitable" and said children in some areas are five times less likely to receive a guarantee of additional help than others.
It said services such as speech and language therapy and mental health are often unavailable even when they are specified in a child's statement of need.
Parents are concerned their children will lose their right to additional help if they move house and cannot face repeating the "bureaucratic and stressful" assessment process.
It said that many children with special needs are being failed by a system which is unfair, too complex and out-of-date.
Although the system works well for some children, support depends on where they live, which school they attend and how hard their parents can fight for their rights.
The Commission's comments come in a report Statutory Assessment and Statements of SEN: In need of review which focuses on how the system meets the needs of the 3 per cent of pupils with the most severe needs.
The report warns that the system of statements swallows two-thirds of the total resources available to children with SEN.
As The TES revealed last month, the latest report criticises the system for being bureaucratic. Each statement costs pound;2,000 to produce, usually adds little to what is known about the child and are often confusing, the Commission found.
In one school, learning support assistants were put on a training course to help them make sense of statements.
Anne Pinney, author of the report, said some children's needs could be met with the money currently spent on the process of assessing them.
The report calls on the Government to set up a "high-level commission" to resolve tensions within the system.
Statutory Assessment and Statements of SEN: In need of review is available by telephoning 0800 502030, price pound;18 www.audit-commission.gov.uk https:www.tes.co.uk