A SHAKE-UP in the way cash is distributed to compensate councils for the number of free bus journeys made by pensioners could see Oxford City Council benefit by more than £2m.

The Vale of White Horse District Council is also set to gain £200,000, but the rest of the county’s local authorities would lose a similar amount.

The free scheme, introduced in April last year for people aged over 60, does not take account of extra journeys generated in tourist hotspots like Oxford.

The city council has to meet the cost of everyone entitled to free travel who gets on a bus in Oxford — regardless of whether they live in the city or not.

In its first year, pensioners took 4.5m trips in the city, which cost the council £3.2m.

But in a letter to Oxford East MP Andrew Smith, Transport Minister Sadiq Khan said the Government would consult on a new formula that would see Oxford’s grant increase from its current £860,000 to £3.14m — a rise of £2.28m and one of the biggest increases in the country.

Mr Smith lobbied the Government, arranged for ministers to meet city council representatives and raised Oxford’s plight in the House of Commons.

He said: “The free bus travel is a great scheme, hugely valued by older people, but it has been hitting the city’s budget – and therefore its taxpayers – and holding back cash from other services, totally unfairly.

“The Government has to consult on this new arrangement because some other councils will lose out.”

City council leader Bob Price added: “This is very pleasing news because we have been making our case to ministers for the past year, and believe we have a very strong case for the revision of the formula.”

The Vale council has calculated it would be about £200,000-a-year better off, but Cherwell, West and South Oxfordshire would lose about £200,000 a year.

West Oxfordshire leader Barry Norton attacked the proposal, saying it would put the equivalent of £5 on council tax bills in the district.

He added: “Why not simply put more money into the scheme to compensate the cities that are losing out the most?”