BUS services need to be better regulated outside London, says a think tank report.

Britain's bus passengers have been let down by a lack of competition and a failure of deregulation, according to the Institute for Public Policy Research (IPPR).

It calls for local transport authorities modelled on Transport for London to be rolled out across the country, with stronger powers to introduce London-style bus regulation.

The study – Greasing the wheels: supporting and improving Britain's rail and bus services – can be downloaded here.

The report shows that one in eight people working in Britain rely on the bus to get to work, with the poorest making more than three times as many trips per year by bus than the richest.

It shows that while car ownership is nearly universal among richest half of the population, only 30% of households in the poorest income decile own a car.

Poorer groups are therefore reliant on poor bus services or have to rely on taxis.

The report shows that the poorest fifth of households take more taxi journeys per year than any other income group.

The report shows that 37% of weekly services outside London do not face any effective head-to head-competition and just 1% of weekly services face effective head-to-head competition.

It argues that liberalisation has not resulted in a competitive market.

The report shows that bus fares in England outside London rose by 35% above inflation between 1995 and 2013, and by 34% in Wales and 20 per cent in Scotland over the same period.

The report recommends the creation of local transport bodies modelled on Transport for London at the level of city-regions and combined authorities.

It says they should have a remit to take on the delivery of transport policy, including the regulation and contracting of bus markets where the private sector is failing to deliver an adequate service.

The study argues that this would allow for better services, quality and fare levels and allow for greater integration of transport services.

IPPR associate director Will Straw said it was no accident London had the best buses in Britain.

"Transport for London has been a great success while the deregulation of buses outside London has largely failed," said Mr Straw.

"Outside London, bus passenger journeys are down and fares are rising higher than inflation."

Examples of successful bus markets outside London were "all too rare" so local transport bodies should be given greater powers to hold uncompetitive providers to account.

As well as regulating bus services, Mr Straw said these new bodies should have a wider role of encouraging better integration between buses and other modes of transport including rail.

"This will help increase the number of passengers using public transport," he said.

Responsibility for transport related to schools and hospitals should be devolved to these regional transport bodies, Mr Straw said.

Any savings reinvested in other local sustainable transport projects, he added.