The Commons education select committee is calling for stronger government guidelines for councils, to end a "postcode lottery" of provision.
It also wants ministers to clarify their policy on whether to include special needs children in mainstream schools or educate them separately.
The government said it had "done much" to improve the situation.
According to the committee, those with special educational needs (SEN) are being "sidelined".
It also claims the government's "inclusion" policy - teaching pupils in mainstream schools wherever possible - is causing confusion about whether this means closing special schools.
About 1.53 million children in England are judged to have SEN.
The number of special schools in the state and private sectors fell by 7% from 1,239 in 1997 to 1,148 last year.
The committee says special schools, dealing with issues such as autism, behavioural and learning difficulties, are "invaluable" for many pupils.
It recommends more mainstream and special schools joining in federations to share ideas.
Committee chairman Barry Sheerman said: "Many of the problems identified in our report stem from the fact that SEN provision has not been given sufficient priority by successive governments."
