I think yamin is right, a sliding scale would be good, the problem is that free buses are provided to everyone or no one, it's based on safety rather than money. As in, your child has been offered a safe mode of travel to their nearest school.
We have a ludicrous situation in our village, the closest school is a boys grammar, followed by a mixed upper that is oversubscribed and our village is not in it's catchment and a child would never get a space there, followed by the catchment upper school which doesn't qualify for a free bus pass as its not the nearest! So to get a free bus pass you either have to be a boy who is clever enough to go to grammar or a child whose parents were savvy enough to put the oversubscribed school first on the caf, be rejected, get their catchment school allocated and therefore get a free pass as its their second closest upper.
I don't think we should have a free pass, but we do, we are not on high income but perfectly able to pay for public bus fare if we were careful, or he could cycle, we certainly wouldn't pay £570 for a seat on a coach each morning. I know many others wealthier than us who get free passes too, some of whom rarely use the bus but keep a seat/pass as its free and can be used in times of desperation, such as when the nanny's 4wd Mercedes is being serviced.
Really by opting for a grammar school if it's not the closest school, having to pay £60-80 a month per child for bus fare isn't a huge sacrifice for 90% or more of the parents involved, it simply means reigning in the spending on other areas, which considering that elderley/disabled day care facilities have been financially bashed and the verges and trees are so over grown you can barely see the road signs, is a small sacrifice in the bigger picture.
My biggest bug bear is the disproportionate cost of paid for fares over distance, which is ludicrous and probably due to coach companies rather than the council. How can it cost £570 to travel four miles there and back each day, yet only £960 to travel 23 miles there and back? Local families subsidising out of catchment pupil's bus journeys?