Doctors are wrongly approving disabled badges for people who exaggerate disabilities to gain a parking concession worth up to £5,000 a year, according to a report by MPs.

The number of blue badges in circulation has more than trebled in the past 20 years, from 670,000 in 1987 to 2.3 million last year. The number is continuing to rise rapidly and is projected to reach three million by 2012.

The Commons Transport Select Committee found that some councils were ignoring the Department for Transport's guidelines, which state that applicants for a blue badge should have an independent assessment of their mobility.

Instead, they accepted recommendations from the applicants' GPs, who were likely to be under considerable pressure to agree to a concession that cost them nothing to approve.

The report says: “The use of an applicant's own GP to assess their mobility, or of any other doctor directly involved in the applicant's care or treatment, is likely to produce a bias in favour of approving the application; it is also contrary to DfT guidance on the subject.”

The committee found that Westminster City Council, which employs occupational therapists to check whether applicants need a blue badge, rejected about half of all applications. Authorities that relied on a report from the applicant's own GP approved the majority of applications.

The report condemned the inconsistent approach of different authorities in applying eligibility criteria, meaning that people in some areas were much more likely to get blue badges than in others.

In Outer London, Bexley has 52 badges per 1,000 residents while Greenwich has only 16. In the North West of England, Liverpool has 111 per thousand, while Manchester has 37. In some authorities badges are issued by the social services department, in others by the parking department. The report says: “This is a fundamental matter of fairness: a person's entitlement to a blue badge should not depend on where he or she lives.”

Previous studies by local authorities have suggested that up to half of blue badges may be being used fraudulently. They are issued to an individual for use in any vehicle and drivers can easily claim that they were dropping off or picking up the holder.

Stolen blue badges change hands for up to £1,500.

The Audit Commission said last month that more than 16,000 blue badge parking permits belonging to dead people were still in use in England. The committee found that there was no process for rescinding a badge, which is valid for three years, after the death of the holder.

The committee recommended that a national database should be created to allow wardens to verify instantly whether any badge was valid.

It also called for car park operators, including supermarkets, to be held to account if they failed to address the misuse of disabled parking spaces. It said that Asda was the only national company consistently to fine people who misused disabled bays.

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