Exclusive: Transport Scotland has called in police to pursue rogue bus operators who have �attempted to defraud millions of pounds through the government�s concessionary travel scheme, The Herald has learned.

Transport Scotland has called in police to pursue rogue bus operators who have attempted to defraud millions of pounds through the government's concessionary travel scheme, The Herald has learned.

The government agency has appealed for public help to identify suspect practices by bus operators and overhauled its procedures after evidence emerged of abuse under the flagship policy, which offered nationwide free bus travel to elderly and disabled passengers following its introduction in 2006.

Bus operators have welcomed the initiative, warning that widespread abuse of the scheme could pile further pressure on an already overstretched budget and ultimately threaten its survival.

Under the terms of the scheme, bus operators are entitled to reimbursement from the government for a portion of ticket value of each free journey.

Transport Scotland, which administers it, clawed back £2m from bus operators last year after investigating suspicious claims, although it is thought that not all of these will constitute fraud.

However, concern over potential abuse under the system led to the agency to introduce a "zero tolerance" policy for dealing with fraudulent claims earlier this year, which included the option of referring investigations to the police, according to documents released to The Herald under Freedom of Information legislation.

Officials at the concessionary fares unit within Transport Scotland are pursuing claims against a handful of suspected offenders worth nearly £100,000 which may result in criminal prosecutions. A number of those have been referred to police and some have resulted in reports to the procurator fiscal, although officials have refused to disclose details for fear of prejudicing the investigations.

Ronnie Mellis, Operations Manager at Transport Scotland's Concessionary Fares Unit, said the "vast majority" of bus operators had acted responsibly and helped clamp down on abuse.

He added: "We take allegations of abuse under the scheme very seriously and the fraud policy that we have introduced is evidence of how we have acted on these concerns."

Mr Mellis said tackling fraudulent activity had been made more difficult by the delay in introducing smartcard ticketing, which will allow information from buses to be automatically recorded and used for claims under the concessionary travel scheme.

The technology was due to be rolled out across Scotland in 2006. However, only 55% of bus companies currently have smartcards and it is not expected to be expanded across the rest of the fleet until early next year.

It is thought that some bus operators have attempted to defraud the scheme by issuing tickets for longer journeys than actually take place. Another scam is to simply invent passengers when submitting claims.

The fraud strategy introduced by Transport Scotland has seen under-cover inspectors board buses to check that passenger numbers reflect the levels that are being claimed under the concessionary fares scheme.

Ministers moved to expand the concessionary fares scheme to include young veterans in May, despite an official review which found that its £185m budget could be exceeded by up to £13m this year and could prove unsustainable in the long term. The popularity of the scheme has resulted in some 1.1 million Scots issued with a free travel pass.

Documents seen by The Herald show that the Transport Minister, Stewart Stevenson, was briefed in December 2007 that it was pursuing claims from four bus companies worth £2.2m that it believed to be suspect, warning that this could escalate to £3.3m in 2007/8 if not addressed.

A spokeswoman for Transport Scotland said that suspect claims would not be paid until properly verified and that funding would be reduced from the following year's budget if paid in advance.

The action was welcomed by the Confederation of Passenger Transport UK, which represents bus and coach organisations.

Paul White, CPT's public affairs executive in Scotland, said: "It's definitely the case that there's been fraud under the system from some operators at the bottom of the market which we have been keen to tackle. It tends to be the same operators who are engaged in fraudulent activity who also are failing to keep their vehicles in good working order and keep to timetables."