More money needs to be invested in buses to encourage growth in passenger numbers, according to a report from government advisers.

The use of buses has been declining in recent years, but the number of people using buses could soar if public subsidies were increased, it suggests.

The Commission for Integrated Transport, which compiled the report, recommends a 40% increase in subsidy to �1.5bn a year for buses outside London.

Our proposals will offer the government a real chance to reverse the historical decline in bus use

Professor David Begg, Commission for Integrated Transport

It believes this, and other measures could play a major part in improving the bus network to broaden its appeal.

The commission also advocates more half-fare concessions to include job seekers, 16-18-year-old students and others in full-time education.

The proposals could see passenger numbers increase by more than a third in seven years, persuading people to abandon their cars and helping the poorest travel to work and the shops.

It would lead to an extra 850 million bus journeys a year, or 2.3 million more passengers a day, added the commission.

Passenger rebate

It also called for more support for bus services in smaller communities and rural areas, as well as changes in the way buses are funded by the government.

The commission's chairman, Professor David Begg, said: "The bus can deliver change fast, cheaply and with enormous impact.

"It must be at the heart of the delivery of integrated transport."

Instead of a fuel duty rebate based on the number of miles the bus travels, the rebate should be based on the number of passengers carried, with more money as passenger numbers increase, says the commission.

Fare inflation

The report, entitled Public Subsidy for the Bus Industry, said that in the past 20 years, bus fares had risen much faster than inflation, outstripping both motoring costs and rail fares.

Rail and bus received similar levels of subsidy, while the bus carried about five times the number of passengers and was considered to deliver far greater social inclusion benefits, the report concluded.

Professor Begg said the bus had the opportunity to come into its own and put its "Cinderella past" behind it.

Rural buses need more support

However, it is not clear whether Chancellor Gordon Brown will agree to more subsidies, with tax receipts down and rising public borrowing.

Liberal Democrat transport spokesman Don Foster said subsidies to the bus industry in England - excluding London - had risen by 6% to �585m in recent years, while passenger numbers had fallen by 10%.

He said: "Public money is being used to keep ever emptier buses on the road, rather than focusing on measures to attract people out of their cars and on to our buses.

"Subsidies must be moved away from supporting bus companies to supporting the journey maker.

"Free off-peak travel for all over-60s and half-price fares at all times for 16-19 year-old students must play a part in any realistic socially inclusive transport plan.

A Department for Transport spokesperson, however, moved to quash speculation it would scrap the minimum discount for the elderly.

He said: "The government has no plans to either reduce the statutory minimum or stop local authorities introducing more generous schemes."