An update for anyone interested.
I had a phone call this morning from the Blue Badge Team saying pretty much the same as I have read here. Assessments are a requirement and cannot be cancelled on the basis of a doctors recommendation. Then to my surprise said " Our manager has decided to make an exception in this case and you will not be required to attend, your badge will be sent as soon as we have it printed. We thought we would inform you of this decision". Not what I was expecting at all but it just shows it was worth a try and not everone is a Jobsworth.