Bus companies are charging Oxford City Council for two single fares when a pensioner makes a return journey, it has emerged.

Since 1985, the council has subsidised fares for pensioners and they pay only 20p for all bus journeys.

Under the present system, which is also used in other parts of the country, the bus companies are only allowed to calculate the concession using single fares.

Stagecoach and Oxford Bus Company have calculated that the average single fare is 90p. The council pays the remaining 70p subsidy.

But return fares have not been taken into account since the scheme was established, and this could significantly reduce the average cost of a journey.

On Tuesday, October 9, the council's finance and performance management scrutiny committee began a review of the fares scheme.

Afterwards, Graham Smith, business manager in charge of the fares scheme, said the anomaly over return fares would be high on the agenda when the review was conducted.

He added: "We are making a contribution for two single fares instead of one return fare, and that is something we have to address.

"The cost of a return fare is always going to be cheaper than two singles. "It is not the fault of the bus companies, it is simply the way the scheme has always operated, but it is a built-in anomaly and I will be asking councillors to address it as a priority."

Last month, former Labour council leader John Tanner upset pensioners when he suggested that the concessionary fare should be increased from 20p to 25p.

The scheme costs the council up to £1m a year.

Yesterday, Mr Tanner outlined a series of objectives for a working party.

Mr Tanner said the fares scheme should be anti-poverty, promote public transport and be audited effectively.

He said the council should be able to predict accurately how much the scheme would cost each year.

Bill Jupp, chairman of the Oxford pensioners branch of the Transport and General Workers' Union urged the council to move towards free public transport for pensioners, rather than increasing fares.