PENSIONERS will be allowed to use their bus passes on ‘Dial-a-Ride’ after a U-turn by transport chiefs.

But bosses warned they face the biggest funding shortfall of all English shire councils for free travel schemes.

Oxfordshire County Council wanted to axe free travel on Dial-a-Ride, which picks people up from their doorsteps for essential trips, to try to save £100,000 a year.

But it is now expected to use cash in its reserves to pay for the service, used by about 900 county residents.

The authority is, however, pushing ahead with plans to stop offering travel tokens as an alternative to bus passes, used by 12,000 county residents.

The tokens, worth up to £40 a year, could be used to pay for taxis and were popular in rural areas with few bus services.

Yet it means the council is struggling with the £8.7m bill for concessionary travel, which it is taking over the running of from district councils, as it was given £4.3m by the Government for the service.

Ian Hudspeth, county council cabinet member for infrastructure, said: “Of all the shire counties we have received the poorest funding settlement.”

More than 3,000 people responded to the tokens and Dial-a-Ride plans.

Some 77 per cent backed keeping travel tokens but Mr Hudspeth said the scheme was “unaffordable” as it would cost £700,000 compared to £200,000 now.

This is because the county council will take on concessionary schemes from April.

Three districts offered tokens but the council would have to pay for none or all.

Mr Hudspeth said: “We recognise some people find them invaluable but the cost is prohibitive.”

He said: “This is a demand-led service with no upper limit and we cannot control how many people get on the buses.”

Colin Walsh, 73, chairman of campaign group Transport for All, said of Dial-a-Ride: “For some, this is the only way they can get out of the house.”

But he said of the withdrawal of tokens: “It is bound to make life more difficult.”

The revised deal, set to be agreed by the county’s cabinet on Tuesday, will increase pressure on County Hall’s fin-ances. It needs to cut £119m in the next four years.

Rhodri Jones, spokesman for the Department for Communities and Local Government, said: “From April 2011, all funding for concessionary fares will be provided through formula grant which gives local authorities the freedom and flexibility they want in their use of funding.

“Formula grant is allocated on the basis that the level provided overall is sufficient to enable local authorities to deliver effective local services, whilst ensuring that authorities do not set excessive council tax increases.

“If councils share back office services, join forces to procure, cut out the non-jobs and root out the overspends then they can protect frontline services.”