The English bus industry is facing its greatest financial challenge for a generation, a report by MPs said today.
Funding changes by the Government have had an adverse impact on local bus services and the level of bus fares, the report by the House of Commons Transport Committee said.
The Government must not "wash its hands" of all responsibility for local bus services, the committee added.
The committee's report covered bus services in England, excluding London, in the light of the Government's 2010 spending review.
The report said the review had included three funding decisions which had "created the greatest financial challenge for the English bus industry for a generation".
The committee called on the Department for Transport to monitor the extent of bus service cutbacks and review service provision.
"The Government claims it wants to see better bus services with many more smartcard-enabled journeys. Yet, following the Government's spending review, we have seen a significant number of bus services withdrawn around the country and there is every indication that fares are set to rise well above the rate of inflation in some areas.
"We know that over 70% of local authorities have moved rapidly to reduce funding for (council) supported bus services, forcing most operators to withdraw services and/or push up fares.
"For the most part it is rural, evening and Sunday services that are most affected, although in some areas every scrap of funding has been withdrawn from subsidised bus services. In some cases, whole sections of the bus network have been scaled back with little or no proper consultation."
Bob Crow, general secretary of the Rail, Maritime and Transport union, said: "This report underlines the scale of the unprecedented crisis that threatens to rip apart bus services in many parts of the country.
"Lifeline services, particularly in rural areas, face total collapse with fares on whatever is left set to rocket as a direct result of Government cuts."
Stephen Joseph, chief executive of the Campaign for Better Transport, said: "We welcome the report which recognises the serious damage being done to local bus services by funding cuts.
"We've been warning for some time that things are likely to get worse with further cuts still to come and we are pleased to see the committee echo these concerns.
"The Government needs to take action and take action now to prevent the terminal decline of the country's bus network.
"It must reverse the planned cut to the bus service operators' grant as a matter of urgency or we will be faced with a skeletal bus service in many parts of the country."
Welcoming the report, Transport Minister Norman Baker said: "We are indeed monitoring the effects of the various changes to the bus market implemented since the spending review. For example, the grant arrangements are under review to ensure they deliver our goals of cutting carbon and supporting the economy and continue to offer value for money.
"However, nearly 80% of bus services outside London are commercially run so don't rely on direct funding from councils. There has been no cut in the financial support we provide for these services this year.
"We have also protected the concessionary travel scheme in full and provided £10 million of extra funding for community transport in rural areas."
Mr Baker continued: "The Government accepts that the overall funding settlement for local authorities is challenging. We are keeping a close eye on whether councils are approaching this imaginatively, finding savings in procurement and backroom staff, or just reaching for the axe and cutting frontline services.
"However, it is part of the localism agenda that local people will now be able to hold their local authority to account if they disagree with decisions they have made.
"The Government will be responding formally to the report's recommendations in the next couple of months."