The badges enable disabled people to park for free in pay and display bays and for up to three hours on yellow lines, while in London they exempt holders from having to pay the congestion charge.
However, the Local Government Association, which represents more than 100 councils across England and Wales, has warned that there were 2,056 instances of blue badge theft in 2015.
This was a 26 per cent increase on the 1,620 instances recorded in 2014.
And figures show that the number of recorded blue badge thefts stood at just 656 in 2013.
The Local Government Association said the increase has been accompanied by a rise in the number of people prosecuted by councils for using stolen or lost badges to park for free dishonestly.
The number of people caught abusing the scheme has almost trebled in five years.
Figures from the Local Government Association reveal that there have been a total of 985 successful council prosecutions in 2015.
This compared with 330 prosecutions for abusing the scheme in 2010.
But town hall chiefs are now calling on people to help councils to further crack down on the problem.
Coun Martin Tett, the Local Government Association’s transport spokesman has strongly criticised those who are seeking to steal badges or abuse the scheme.
Coun Tett said: “The theft of blue badges is clearly a crime on the rise and it is alarming that incidents have trebled in just three years.
“Illegally using a blue badge is not a victimless crime.
“For disabled people, blue badges are a vital lifeline that helps them to get out and about to visit shops or to family and friends.”
He added: “Callous thieves and unscrupulous fraudsters who are using them illegally are robbing disabled people of this independence.
Mr Tett said that local authoritie “come down hard” on motorists who use stolen blue badges.
“It is important to catch these criminals in the act,” he said.
“To help councils win the fight against blue badge fraud, residents must keep tipping us off about the people they suspect are illegally using a badge, but bearing in mind people’s need for a badge might not always be obvious.”
Blue badges are only allowed to be used in a car when the holder of the badge is either driving the vehicle or is a passenger on that occasion.
Misuse of a blue badge is a criminal offence.