A TRANSPORT operator has said it will be left with a shortfall of millions of pounds following Government plans to provide free travel for elderly and disabled people.

Nexus will tell the Tyne and Wear Passenger Transport (PTA) next Thursday that it is seeking a change in Government funding allocations with regard to cheaper travel for elderly and the disabled people.

Nexus spends £22.4m a year on subsidised travel on buses and the Metro in Tyneside and Wearside.

However, Chancellor Gordon Brown's latest budget revealed the Government's intention to provide free travel on local bus services for elderly and disabled people from April 1 next year.

Nexus and PTA chairman Councillor David Wood welcomed an additional £350m to fund the change from half-fare to free travel, and the benefits for pensioners.

But they said the amount set aside for Tyne and Wear fell short of what was required. They said it may cost them as much as £20m a year.

Nexus director general Mike Parker said: "If we were compelled to pay for this new concession ourselves, we would have to make substantial cuts across the board, such as reducing those very services which pensioners use and depend on, which is patently absurd."