Nearly £30m has been cut from local authority supported bus funding in the last financial year, according the Campaign for Better Transport.
This represents an 11% reduction in England and 7% in Wales compared to 2015/16.
The 'Buses in Crisis' report also shows that more than £100m or 33% has been cut from local authority bus funding since 2010.
See also: Bus cuts leave communities isolated
Public transport campaigner Lianna Etkind said some 2,900 bus services had suffered cut backs and withdrawals resulting in huge disruptions for communities.
"As our research shows, buses across the country have been hit hard by funding cuts.
"Year on year we are seeing more bus services lost, with some local authorities stopping supporting buses altogether."
Ms Etkind said the cuts came on the top of cuts to school transport and the underfunding of free pensioner travel.
She warned: "Together these threaten the viability of whole bus networks and will lead to 'transport deserts' in some rural and suburban areas where there is no public transport at all."
The Campaign for Better Transport argues that the decline is not inevitable.
With the Bus Services Bill currently going through Parliament, it says there is hope that powers in the bill will help local authorities to better plan and set standards for their bus networks.
It says this could improve people's access to jobs, services and education.
Ms Etkind said: "We urge the government to ensure that all local authorities have the full range of powers at their disposal; and to put in place a plan to ensure buses have the funding they need.
The government needs to understand the vital role buses play in the economy, the environment and to wider society and to commit to protecting bus services, not just in towns and cities but in rural areas as well."
The 'Buses in Crisis' report found that 66% of local authorities had reduced their spend on supported bus provision this year.
It found that 10 councils around England and Wales already had no supported bus services at all as of 2016/17.
The North West is the region that has seen the highest bus cuts this year, with an average reduction in bus spending of 15%.
The Buses in Crisis research is based on Freedom of Information requests to all 110 local transport authorities across England and Wales.
Sign up to our newsletter to receive all the latest news and updates.