Temp agency.. ok, they were paying 6.80p an hour.?

After a few weeks, they started paying 5.93p an hour. When questioned they said "Well, you claim for your mileage & food so that bumps your wages right up!". Then a thought occured, so i asked.. "And if I Live 2 minutes walk away? and dont drive there?" and they`ve told me "Sorry then you just get the 5.93p plus your food allowance, but you must put a claim in.. Isnt that just disgraceful really? What do you think?