Ask them what they suggest and what are they going to do about it? Just heard about lad in our area with behavioural issues caused by Autism I think and a new company are putting on a wrap around full service including Education and Care so it can be done. We're in the North East.
Mum to AS Big Fish (19, 16 years at home) and AS Little Minnow (13, almost 6 years at home), came separately, and now a wonderful, feisty horse who lets me escape from kids with attitude and the drudgery of disability services and a top of the range adapted van provided by the council fulfilling their legal requirements!
Hugs Leo, it is awful how children like ours are let down by services supposed to help.
As Esty says, put it back onto them to come up with something. You have been coping too well and doing too much home schooling your boys. You are too competent and the powers that be are relying on you too much. Am assuming both boys have EHCP's? What is in their plan for the future as they get older?
As hard as it is when its your child in the middle of this, if we are realistic, some children have needs that just can't be met in the standard state system . Schools can't possibly meet every child's needs.
So on one level I think I might be relieved that they are at least being honest about it. They are acknowledging his level of need, and not trying to shoe horn him into an unsuitable and damaging environment in school.
I think if they have said this they must therefore fund specialist provision for him. I've just lifted this from IPSEA
Myth: Local Authorities have no responsibility towards children who are unable to attend school because of their medical needs.
Fact: Local Authorities must make arrangements for the provision of suitable education for children who are unable to attend school because of their medical needs. In addition, Local Authorities must not refuse or reduce such provision on the basis on how much it will cost.
Law: Section 19 Education Act 1996 and the landmark case of R v East Sussex County Council, Ex p Tandy  AC 714
As Serrakunda says - the authority have a duty. You might find them quite helpful - ours was in terms of imposing certain things on the school once she had the EHC plan. The school tried to make out she wasn't suited to be there and the authority was very firm that they had to accommodate her needs. I know that's not what they're saying to you but they should come up with something. Have you contacted Sendiass? You could also try an education lawyer - my DH managed to get half an hours free phone advice from one at one time.