incredibly complicated since you can't buy one nor anything
equivalent so no price to tax

I had envisaged that it would be taxed, like many benefits in kind, on
the cost to the provider (the default position)
..
plus the cost to the local authority can vary from the issue cost to
more than an annual season.

Sorry but I don't follow that. AIUI from the London Council budgets the
total cost of Freedom Passes is apportioned to boroughs on the basis of
usage data based on sampling, not records of every single journey by
every pass. So the cost of providing any single Freedom Pass does not
depend on the use of that pass by that particular person. It follows
that the taxable benefit would similarly not vary with use. (There is
ample precedent for that. Eg many employers provide employees with
private medical insurance under a group policy with a single premium.
Each employee is assessed on an apportioned share of the cost
irrespective of the use they make of the cover and of their age, medical
history etc.)

--
Robin
reply to address is (meant to be) valid