CUTS to bus services are damaging people’s employment prospects and even worse reductions are to come, MPs have warned.

The Commons transport committee said extensive cuts to rural, evening and weekend bus services were also affecting the ability of many people – especially the old, young or disabled – to participate in education or voluntary work as well as access vital services such as healthcare and shops.

The English bus industry was facing its “greatest financial challenge” for a generation, said the committee that warned of even deeper cuts next year.

Dozens of services have already been axed in the North East amid fears of a “rural exodus” in parts of Durham and Northumberland as councils struggle to support services as a result of budget cuts.

MPs also urged town halls and bus operators to improve public consultation on changes to routes as well as sharing of best practice in terms of delivering cost effective and flexible services.

But ministers could not wash their hands of all responsibility for local bus services and they were urged to monitor the impact of spending cuts.

The Commons transport committee also called for the concessionary travel scheme to be preserved so that the elderly and disabled continue to enjoy free bus travel in a review of England’s bus services outside London after the coalition’s spending review.

But the report said MPs heard the concessionary fares scheme was “discriminatory” because it did not apply to most community transport providers – usually independent charities providing dial-a-ride bus services for example.

And ministers were urged to legislate to permit the use of the concessionary pass on a wider range of community transport services.

Jeff Reid, Liberal Democrat leader of Northumberland County Council, said: “It is about the Government and local authorities not having money to support rural services. But it is also about people not using them.”