Local councils are coming under increasing pressure to crack down on people who abuse blue parking badges for the disabled - yet some people who have never done so are falling foul of new government restrictions.

There are more than two million of the badges in circulation in England, more than three times the number 20 years ago. Sixteen thousand are in the names of dead people but are still in use, according to the Audit Commission, the independent body responsible for ensuring that public money is used economically, efficiently and effectively.

Abuses such as this - and a report from the Commons Transport Select Committee suggesting that councils are not vetting blue badge applicants properly - have prompted a Department of Transport crackdown.

However Renee Swannie, a volunteer for the St Michael's Day Centre for the Elderly in Wandsworth, south London, believes she is an unintended victim of the new policy. The centre provides activities for older people but also ferries them to hospital appointments and makes house calls, a service which has earned the charity an 'institution blue badge' for the past nine years. The badge has been renewed each year, but now the centre is being told that when the current one expires in August it will not be replaced.

'I have never abused this badge,' says Swannie. 'It is an integral part of our day-to-day work. For example, we recently had to rush round to one lady's house when we didn't get a response from her, only to find her on the floor. We had to park on a yellow line because there were no spaces, which we couldn't have done without the blue badge.'

The charity has been told that the only option available to it now is to buy an all-boroughs parking permit, which costs nearly £500, allowing parking in any bay, but not on yellow lines. 'We are having to do raffles to try and raise money for this,' says Swannie. 'I've been with the charity for 27 years and this is the first time I've felt really defeated.'

Wandsworth council says the rules on blue badges have been changed in a bid to tackle widespread fraud and misuse. 'It is a growing problem and councils have been urged by the government to do more to combat it,' says a spokesman.

On the day centre's case, he said: 'There is no real reason for Mrs Swannie to have a blue badge. If she is ferrying a disabled person around in her car, then she can use their badge. That is how the system is supposed to work, so she does not need a separate one.

'However, if she feels that she does need the ability to park almost anywhere, then her group could purchase a business permit which would give her this freedom. They are reasonably priced and easily covered by the grants given to her group by the council, which this year will total £50,000.'

Paying for a business parking permit would, of course, reduce the money available for helping the elderly in Wandsworth. The council spokesperson points out that 8,323 blue badges are currently in issue to the 270,000 inhabitants of the borough and that you do not need to be a car owner to apply for one. All the eligible attendees of the St Michael's Day Centre could apply for badges of their own, which could then be placed in her car as necessary.

The recent Select Committee report found that eligibility for a blue badge is effectively a 'postcode lottery', with individual councils deciding who to approve. Its proposed reforms include:

· The minimum issue period to be reduced from three years to one to help those with temporary disabilities.

· Eligibility to be based on mobility in a wider sense than simply the ability to walk or not.

· Tougher penalties for those who knowingly abuse the scheme, with those who use stolen badges having their vehicles impounded. A national database should be established to help combat fraud.

The committee said that Asda was the only example given of a major national company which consistently fines people who abuse its disabled parking bays.

· Have you had problems applying for a blue badge or had one taken away? Email us at cash@observer.co.uk.