Special needs and disability support in London schools is facing “unsustainable financial risk” according to a report from London Councils.

A “dramatic and sustained rise” in demand for special educational needs and disability services (SEND) has led to a £77 million funding gap in the capital, research found.

There are more than 200,000 young people in London with special educational needs or a disability, and almost a quarter have high needs.

Children with high needs often require more support, which may include an education health and care plan. This is a record of the support that a child needs, helping them to access specialist services from their local council.

Demand for health and care plans in the capital has increased rapidly, rising by 31 per cent between 2014/15 and 2017/18. All but one London council now has a deficit in its budget for children with high special educational or disability needs.

Councillor Nickie Aiken, leader of Westminster Council and London Councils’ executive member for schools and children’s services, said the current pressure on council budgets was “unsustainable”.

She said: “When children and families aren’t getting the right support at the right time, the effects can be disastrous.”

She added: “The Government needs to boost investment in children’s services in line with councils’ rising costs. That’s the only way to ensure the sustainability of the high-value, high-impact local services that make such a difference to children’s lives.”

Responding to the report, the London Assembly’s education panel chair, Jennette Arnold, said the Mayor must continue to put pressure on the Government to increase funding in line with demand.

She said: “SEND pupils are more than capable of having a bright future and a good life in adulthood if the resource is made available to ensure the work to make that happens starts as early as possible.”

A spokesperson for the Department of Education said SEND funding for schools had increased from £5 billion in 2013 to £6 billion this year, with an extra £42 million earmarked for London in December.

He said: “Our ambition for children with special education needs and disabilities is the same as for every other child – to achieve well in education, find employment and go on to live happy and fulfilled lives.

He added: “We are looking carefully at how much funding for education will be needed in future years, as we approach the next spending review.”

London Councils could not publish borough-specific budget data, or confirm which boroughs had a deficit.