People with invisible disabilities can now apply to use blue badge parking permits, the government has announced.

The Department for Transport (DfT) issued the new guidance on Saturday, advising that those with conditions such as dementia or anxiety disorders could be eligible for the scheme, which allows people to park closer to their destination.

But despite the new criteria, local authorities will still have the final say on who does and does not qualify.

There are about 2.35 million holders of the blue badge in the UK at present. The DfT could not estimate how many more people would qualify after the extension of the rules.

The transport secretary, Chris Grayling, said: “As a society, we don’t do enough for people with hidden disabilities. I hope this change to blue badge guidance will make a real difference to people’s lives.”

Justin Tomlinson, the minister for disabled people, said: “Extending the blue badge scheme is a watershed moment in ensuring those with hidden disabilities are able to travel with greater ease and live more independent lives.”

The DfT is also launching a review into blue badge fraud, after the Local Government Association estimated that theft of the parking permits rose by 45% in 2018, a six-fold increase since 2013.

More than 1,200 people faced legal action for misusing the blue badge in 2017-18; however, only 40% of local authorities in England did not have a policy on prosecutions.

The LGA said: “Despite limited resources, councils are trying to crack down on dishonest motorists by prosecuting offenders and seizing blue badges suspected of being used illegally, so it is good that the government has listened to our concerns and has committed to a review which will support councils in tackling fraudulent use.

“People can help councils win the fight against blue badge fraud, by tipping us off about people they suspect are illegally using a badge, bearing in mind this new eligibility and that people’s need for a badge might not be obvious.”