I think it's ashame to read that bus patronage has declined - it is expected of course. The harsh reality is that when a council/authority find they can't cut much else, cutting the bus funding for certain bus services is the next favoured option. I do hate how a council can consider withdrawing funding for a bus service that some of the most vulnerable of people use and they then realise that the bus company doesn't want to run it commercially, so have to put in funding again.
I think the government have got their ideas wrong on transport - and as a Tory member (boo, hiss), I can say that

Instead of funding big futuristic projects, they should be focusing on ensuring that everyone has a chance to use public transport, whether it be by train or bus (i'm also against the plans for HS2, as I believe that the money for that should be invested in improving local train services and adding back lines which were taken out by Beeching).
The issue is, and has been for many years, that the government's persuasion has been on the use of cars and until that changes and they start to draw their attention to public transport, numbers aren't going to increase in the way they should and some of the most vulnerable, yet independent people will continue to lose their local bus link.
It does seem a lot like the government isn't trying its best to encourage individuals to use alternative methods of transport. In my local area, there has been a proposal to put in a new park and ride in Bath, which our local MP has just presented a 6000 strong petition against putting in a new park and ride to parliament - I wonder how many of those 6000 are regular commuters into Bath and have to put up with the constant traffic problems. It doesn't exactly spell out encouragement to use buses when so many people oppose it.
Certain authorities have continued their funding, whilst others are really giving it all they can with cutting the funding. Bristol and Banes have continued a lot of their funding (Banes is going to start cutting from April though), whereas Somerset have continually cut everything they can - and are now consulting on cutting more. In the last year they have cut the funding for 2 specific services - 184 and 161 - 184 they virtually withdrew all funding leaving it to First to run commercially and 161 they cut the funding to end up with a service going every 2 hours. Then in August First near enough scrapped 161 and 184, leaving it to some very angry Frome residents to plea to Somerset for funding again - which they took on again until later this year when it's reviewed.
But it isn't just the authorities - the bus companies are making hard work for themselves all the time and I voice what other people have been saying - that the constant changes to both fares and services are adversely affecting the number of passengers that use the bus. It also doesn't help with the stupid regulation and competition rules that go on - in Bristol we now have Wessex competing against First on a lot of services (and vice versa) which do exactly the same routes but the fares are ever so slightly cheaper. It's the same in Somerset, where Webberbus are directly competing against First on virtually all of their services. In all of these cases I would prefer the competitors to focus on providing services to areas which have very little in terms of a bus service, rather than scrape a few passengers off of a service operated by a major operator - it is having a big effect - look at service 29 in Taunton - due to Webberbus competing with a Wells-Taunton service (that doesn't follow the same route), First have now cut their service back to every 3 hours, meaning that residents of the small villages across the levels don't have the opportunities they had to use a bus.
All of this, and all the silly adjustments that companies are making, are giving an adverse opinion to current and potential passengers. They then decide against using the bus and then use their car to cause more of a traffic jam, which in turn delays the buses and then turns more people against using the bus.
It's a vicious circle and if the government really want to get people onto public transport, they have to change their outlook and provide better funding to services, along with looking at the competition in the industry and the regulation.