TENS of thousands of unemployed young people will benefit from discounted bus fares under an industry-backed scheme designed to help them find work.

The UK's five major bus companies, including Scottish-based Stagecoach and First- Group, have agreed to subsidise fares for people aged between 16 and 24 who are not in employment, training or education.

Though details of the scheme are yet to be ironed out – including exactly how far ticket prices will be cut – it is expected to come into effect from September.

Discussions are ongoing with a number of smaller operators to secure their involvement, ensuring that it has a comprehensive reach across the UK.

The initiative has taken shape through Greener Journeys, an industry-backed group that aims to promote the environmental benefits of encouraging more people to take the bus.

It coincided with a report published yesterday which found bus commuters generate £64 billion of economic output in the UK every year and that one in 10 of them would be forced to look for another job if they could not travel by bus.

Sir Brian Souter, chief executive of Stagecoach, said: "For many young people, the bus is the only form of affordable transport available to them and they depend on it to get to their education or training.

"The discounted travel scheme being developed by the leading bus operators could make the vital difference between a life of worklessness and getting a job. This shows just how important the bus is to the future of our country."

A spokesman for Stagecoach said the details of the scheme would be ironed out over the next few weeks. While refusing to be drawn on the level of fare discount, he said it would be "significant".

The initiative follows a difficult period for the UK bus industry, which has suffered declining passenger numbers and cuts to government subsidies, including a 20% reduction on the Bus Service Operators' Grant and a cap on the level that bus companies can be reimbursed for the Scottish Government's free bus travel scheme.

A Government report in March found bus passenger numbers had fallen to their lowest level in Scotland in a decade, with 438 million passenger journeys made during the 2010/11 financial year, down from a peak of nearly half-a-billion in 2007/8.

The drop is thought to be driven by rising unemployment and economic uncertainty, which has led to fewer people travelling to work by bus and a drop in the number of people shopping.

The author of yesterday's report, Professor Peter Mackie of the University of Leeds, said buses had a "key role to play in growing the economy". He added: "The bus is a familiar part of everyday urban life. It receives a fraction of the attention given to rail and car, yet despite being taken for granted it is a vital cog in the wider economy, bringing access to jobs and training, facilitating retail spend, and supporting the vitality of our towns and city centres."

Claire Haigh, chief executive of Greener Journeys, said: "This report shows the value of the bus in generating sustainable economic growth.

"Buses play a crucial role in oiling the wheels of the economy as well as reducing carbon emissions, helping maintain the fabric of our communities and providing essential transport for the 25% of households without access to a car."