Mainstream schools manage significantly more children with complex needs since the top-up funding (TUF) arrangements were set up in 2013.
North Somerset Council is conducting a review to ensure TUF supports children and young people with high-level needs and is used in addition to delegated schools funding.
There are 3,783 pupils with special educational needs in North Somerset, with 493 of them receiving top-up funding in mainstream schools.
Sheila Smith, director of people and communities at the council, said: “Like every other council in the country our spending on children with SEND is increasing and the available funding does not match the demand.
“While the LGA is lobbying government for funding increases, in the absence of additional funding we are subject to severe financial constraints on the level of spending and difficult decisions will need to be taken.
“At the same time, we want to make sure that needs are assessed in a robust and fair way, and that funding is used efficiently and effecti