The government has given Brighton and Hove City Council £183,000 to tackle blue badge fraud.
The money will be shared between Brighton and Hove, East Sussex County Council and Sussex Police.
The funding will be used to crack down on the misuse of blue badges and free up parking spaces for disabled people.
The city will be the first in the country to offer offenders the option of a community resolution order.
This would involve paying a fine and watching a video highlighting the effects of depriving disabled people of parking spaces instead of receiving a criminal record.
The funding will also be used to help track down people who are misusing the badges, which are issued to disabled people so that they can park more easily.
And it will fund raise attempts to raise awareness of how blue badges should be used and the consequences of blue badge fraud.
Both Brighton and Hove and East Sussex councils will provide extra funding of £30,000.
The council said that there were about 13,000 blue badges in Brighton and Hove and a further 24,000 in East Sussex.
The Audit Commission has estimated that 20 per cent of blue badges are misused.
The council worked with the local Fed group – the Brighton and Hove Federation of Disabled People – in putting together the bid.
The Fed’s expert advisers said: “From our research and conversations with disabled people we know that blue badge misuse can have a very detrimental impact on disabled people.”
Councillor Ian Davey, the lead member for transport in Brighton and Hove, said: “Disabled people rely on blue badges to access all the facilities and leisure activities the rest of us take for granted.
“It is essential they are able to park close to where they want to go, so this funding will help us tackle misuse of blue badges much more effectively.”
The funding is being provided by the Department for Communities and Local Government (DCLG). It will fund two blue badge fraud investigation officers operating across East Sussex and Brighton and Hove to improve detection and share intelligence.
Over the past few recent years Brighton and Hove has worked with Sussex Police and parking enforcement contractor NSL on Operation Bluebird, an initiative to target stolen blue badges and highlight fraud.
When the partnership started, there was a 25 per cent drop in thefts of blue badges – in 2010-11.
This year it was recognised at the British Parking Awards in the Parking Partnership category. The funding will allow the work to continue and be extended.
Chief Inspector Gareth Davies, of Sussex Police, said: “We have been working closely with our partners and will deal robustly with those fraudulently using the blue badges and who illegally seek to take advantage of the scheme at the expense of those it is there to assist.”
Councillor Davey added: “We want to make sure everyone can get to and enjoy what Brighton and Hove has to offer.
“Any surplus parking income in Brighton and Hove is reinvested into to transport improvements and most of it is spent on concessionary travel for older and disabled people.”
Simon Kirby, the Conservative MP for Brighton Kemptown, said: “I am delighted at the announcement that Brighton and Hove City Council has been awarded £183,000 of funding from the Department for Communities and Local Government to combat blue badge fraud.
“This is an area that is close to my heart. In 2012 I introduced a Private Members’ Bill in Parliament, which has since become law, to make it easier for local authorities to tackle this particular issue.
“I am a firm believer that disabled parking spaces should only be for people who are genuinely disabled and have a real need for the parking space.
“Having seen statistics showing the prevalence of blue badge fraud in the city, I am looking forward to the city council using both their new powers and the recent funding to take the fight to those people who are fraudulently using blue badges thus depriving genuinely disabled residents.”
