The whole issue of who gets what for "free" with the Concessionary Bus Passes does vary around the country, and is based around what each local authority is prepared to pay for. The PTE areas and London are the most generous, with rural counties being the least generous, generally speaking.
It is a contentious issue as while the actual travel may be "free" at the time of travel it is not "free" at all - somebody has to pay for it.
For rail travel it is often very difficult to describe how the funding in PTE areas is distributed, but for buses it is easier, and partly goes to explain why different areas have different priorities and things have changed over time.
A friend of mine is a bus driver for a small, local, family bus company operating in a rural area. Before the free bus pass came about the local authority issued a local pass to local residents. This gave half fare bus travel, which the bus company was happy to live with as some of the services the company operated were tendered by the council anyway (i.e. the council paid the bus company to run the bus in the first place). So, the bus company got a subsidy to run the bus, half fare from local residents (which obviously varied with the distance travelled) and full fare from everyone else.
After the free bus pass came about, the system was set up so that the local council had to pay the bus company the fare for any pass holder who joined a bus within their council area. The council decreed that they would pay the bus company a fixed amount per person, regardless of distance travelled. As it happened, the amount paid by the council did not match the amount the bus company used to collect in cash fares, so the bus company lost out in income. It also lost out in cash flow as the council only paid the bus company quarterly, rather than they bus company getting the money on a daily basis. Similarly the council said it couldn't afford to pay the bus company any more money as the amount it received from the government to pay for the scheme did not match the amount it needed to pay out to the bus operators. Essentially, the council was now paying for the subsidised bus twice - they were firstly paying the bus company to run the bus, then paying the bus company again for the (free) passengers who travelled. With it being a rural area, the majority of passengers were travelling "free".
The bus company was upset it was loosing revenue, so hiked the cash fares up for those that did pay. The council said it couldn't afford to pay for all the subsidised buses to carry around folk for "free", so cut back some of the subsidised services to save money. In the end everyone looses out.
In the area above the local council will subsidise the cost of a Senior Railcard for its own local residents however.
In the PTE area where I live they have now just conducted a "bus review" and revised - i.e. reduced - bus timetables start next month. My informed sources within the PTE advise a similar tale to the above. They simply couldn't afford to pay the bus operators to run the buses and then pay them again to carry folk for "free", as well as pay the rail operators for a generous concessionary travel scheme. So something had to give - namely the concessionary rail travel scheme became slightly less generous (half fare rather than a low flat rate) and a trimming back of subsidised bus services is taking place.
So, local authorities can give whatever concessions it likes, but somebody will pay - and the more you give out will be balanced by cuts or altered funding elsewhere. GMPTE likes to give lots away for free, and pours money in Metrolink, but apart from that it doesn't pay too much attention to train services and station environments or other things for the general masses. WYPTE however prefers to spend money on more things which benefit everyone, whilst balancing this with slightly less generous benefits for bus pass holders.