OXFORD will get its promised £2.28m extra to cover pensioners’ bus travel in a move that will help other areas of the city’s finances.

The Department for Transport confirmed the city council’s grant to cover the free bus travel scheme will increase from £860,000 to £3.14m in 2010-11.

Before Christmas, the Government indicated the council was likely to get the extra £2.28m, and confirmed this today.

The funding will ensure any council tax increase is limited to two per cent.

It can also fund community measures, including £120,000 to ensure the future of the Museum of Oxford and £120,000 to save four out of seven public toilets threatened with closure.

A budget report to the council’s executive board on Wednesday will highlight a potential £1.2m write-off of money invested in Icelandic banks.

But deputy council leader Ed Turner said the city had asked the Government to cover the shortfall as a loan, and expected to hear the outcome in days.

Mr Turner added: “We are very pleased to get this concessionary fares money. It’s justice at last.

“We shouldn’t lose sight of the fact that we have been ripped off for the past couple of years and that has made life difficult.

“It would have made it fantastically difficult to set the budget without the money, and we never like to celebrate until we have banked the cheque, but we have been told the money is now on its way.”

Stephen Brown, leader of the council’s Liberal Democrat group, said: “The Labour administration must be very relieved that they have had this fortuitous bail-out from the Government.”