The committee has urged the Government to produce a bus strategy to halt the decline in bus use and give passengers a fairer deal.
Its report states that in most parts of England bus use is falling, with more than 3,000 bus routes in the country reduced, altered or withdrawn since 2010/11.
MPs said money from the Government for buses is often seen by councils and operators as “uncoordinated and fragmented”.
Cllr Martin Tett, the LGA’s Transport Spokesman, said: “Bus journeys are in a downward spiral of decline, which is driving up fares and exacerbating cuts to the services and routes that are a lifeline for many communities and vulnerable residents.
“The Transport Committee rightly calls for the funding of bus services to be reformed and it is good to see several recommendations to improve this. The recommendations also include a single bus strategy for England.
“Any strategy would have to be backed by adequate resources and find a fully funded, long-term solution to concessionary fares that are underfunded by at least £652 million a year. This is unsustainable for councils already struggling to protect other subsidised bus travel in rural areas, or helping young people with their travel costs.
“Ahead of the forthcoming Spending Review, government needs to give councils control over the Bus Service Operators’ Grant, and properly fund national free bus pass schemes, if councils are to maintain our essential bus services, reduce congestion and pollution, and protect vital routes.”