Transport Scotland has announced plans to spend £414 million on free bus passes for the elderly over the next two years.

Bus transport for disabled people is also set to be covered, building on a previous agreement from January 2013.

Operators across Scotland will be reimbursed for providing free travel to over-60s from April of this year by the Scottish government. There had been some debate over the precise percentage of fares that the companies can expect to be paid for.

Until the end of the 2014/15 financial year, Transport Scotland will continue to provide 58.1 per cent of the subsidised fares, from a total budget of £192 million. While the money available in 2015/16 will rise to £202 million, operators will only received 57.1 per cent of these fares.

Transport minister Derek Mackay said: "Concessionary travel is a key part of the Scottish government's social wage and makes a real difference to many of the 1.2 million national entitlement card holders, including our elderly and disabled.”