Campaigners have called for the government to act to help dwindling bus services, as a report showed council funding had almost halved since 2010.

Budgets to subsidise routes were reduced by another £20m last year and 188 services were cut, according to the Campaign for Better Transport.

Its Buses in Crisis report found that squeezed local authorities across England and Wales had taken £182m away from supported bus services over the decade, affecting more than 3,000 bus routes.

Council funding has preserved funding for services, particularly in rural areas, that private firms have deemed unviable, and where no alternative public transport exists, accounting for more than one in five journeys. But most either cut funding – or spent nothing – last year.

Spokesman Steve Chambers said the research showed “the slow death of the supported bus”, with huge implications for people accessing jobs and education, as well as local economies, health, congestion and air pollution. He added: “The government must wake up to the crisis hitting local buses before it’s too late. We want to see a proper national strategy for buses backed up by funding, like those that already exist for all other modes of transport.”

The Local Government Association said it recognised the importance of buses but that councils had been put in an impossible position by the funding squeeze and the £200m annual obligation to fund bus passes for pensioners.

LGA transport spokesman Martin Tett said: “Councils know how important buses are for their residents and local economies and are desperate to protect them. It’s nearly impossible for councils to keep subsidising free travel while having to find billions of pounds worth of savings and protect other vital services.”

The bus remains the biggest mode of public transport, although passenger journeys declined to below 5bn across Britain last year and central grant funding to operators has also been cut.

A Department for Transport spokesperson said the government provided around £250m every year to support bus services and a further £1bn to support older and disabled people using the free bus pass.

According to research published today by another campaign group, Greener Journeys, every £1 invested in local bus infrastructure brings more than £8 in wider economic benefits, as well as combating car pollution and congestion. DfT figures due to be published this week are likely to show worsening congestion in the UK’s largest cities, where traffic speeds have fallen and traffic is 14% greater than five years ago.