Councils in England have warned that home-to-school transport, on which many children with special educational needs and disabilities (Send) depend, is under threat because of “unsustainable” costs and insufficient funding.

A report commissioned by the Local Government Association (LGA) and County Councils Network has revealed that councils are spending more on home-to-school transport than they spend on children’s centres, family support or youth services.

In some areas where the costs of transport are disproportionately high, often because of long distances in rural settings, the LGA says the school transport budget is almost as large as the entire children’s social care budget.

According to the LGA, 550,000 young people currently receive free home-to-school transport each year, of which 145,000 are pupils with Send whose transport accounts for 69% of total expenditure. New analysis shows that annual costs have increased by £66m in the last four years and could rise by a further £127m to reach £1.2bn by 2024.

One of the key drivers for the increase in costs is that children with Send are increasingly being sent further afield to specialist schools because of a shortage of suitable places closer to home.

Campaigners have warned that cash-strapped councils are already making “ill-considered” cuts to home-to-school transport, prompting safeguarding concerns. In some cases, they say, disabled children with significant health needs are having to wait at pick-up points in freezing weather or are being asked to travel alone, when they really need support.

Shadow chancellor John McDonnell has called for a government investigation into the use of high-cost bank loans after a new report found local councils stand to waste up to £16bn on interest payments over the next 40 years.

Figures compiled by investigative cooperative Research for Action show that local governments which were saddled with complex borrowing schemes in the early 2000s could see annual interest payments halved if those debts were paid off with cash borrowed from the government’s Public Works Loan Board (PWLB).

The report explains that the top 10 council borrowers of lender option borrower option loans – knows as Lobos – stand to save as much as £4bn over the next four decades, while the 240 councils with high interest lobo loans could collectively save up to £16n.

McDonnell is now calling for government action: “The government has a role to play now in ensuring there is a full, independent and open investigation into the use of these financial instruments and action taken to restore any historic loss to the public purse