The government has been recommended to launch a “Work Out to Help Out” campaign to incentivise people to get involved in organised sport.
It comes after the cross-party Digital, Culture, Media and Sport Committee heard evidence that more than 100,000 fewer children in England met the minimum 60 minutes' daily activity recommended by the Chief Medical Officer last year compared with the year before.
It added the proportion of children and young people not achieving the minimum recommended level of activity is "of significant concern".
- National School Sport Week: Over 800,000 kids enjoy week-long celebration of sport
- What is National School Sport Week?
- National School Sport Week: Over 1,600 schools to celebrate to help boost participation levels
Just over half of children and young people achieved the minimum recommended level of an average 60 minutes activity a day in 2020, the report said.
"Despite the government allowing people to exercise outside for one hour a day, either alone or with their household, during lockdowns, team sport and group exercise was halted; gyms, leisure centres and swimming pools were closed down.
"After each successive lockdown, sport has been one of the first things to return but activity levels for 2020 fell below the figures for the previous year among adults, young people and children," the report said.
Community and grassroots sport is "heavily reliant on a relatively small volunteer workforce", it said, and the "shrinking" of that workforce is "one of the biggest challenges facing community sport post-pandemic".
The "Work Out to Help Out" initiative is recommended to encourage participation and volunteering in sport.
"The impact of successive lockdowns on activity levels was not as bad as initially feared," the report said, but it added: "Government and Sport England must renew their efforts on encouraging people back into sport to pre-empt any further drops in participation during 'Lockdown 3'."
It went on: "We recommend that the government initiate a sporting equivalent of the 'Eat Out to Help Out' campaign, entitled 'Work Out to Help Out', to incentivise volunteers and participants to get involved, participate in organised sport and support the sporting infrastructure, both in England and across the UK."
The name mirrors the state-backed Eat Out to Help Out programme, which offered customers a 50 per cent discount, up to £10, when eating in registered restaurants in August 2020, in an attempt to encourage a return to eating out after the first lockdown.
The report also recommends a campaign similar to the "5 a Day" public health message that encourages people to eat at least five portions of a variety of fruit or vegetables a day.
The committee also found sport groups and organisations have faced "unprecedented challenges" during the pandemic, and that financial models "which discouraged the accumulation of reserves left clubs and organisations, right up to national governing body level, in a precarious financial situation".
Senior Conservative MP Julian Knight, who chairs the committee, said the pandemic "has left the already perilous finances of grassroots sport in tatters".
Mr Knight said: "Today we've made recommendations to the government on how to better protect the spaces we exercise in and put grassroots sport on a more sustainable financial footing.
"The government must also play its part in getting people active again following the pandemic or risk consequences for public health in the future."
A Department for Digital, Culture, Media and Sport spokesman said: "Over the past year-and-a-half we have prioritised the importance of sport and physical activity, and they will remain at the heart of the government's coronavirus recovery plan as we build back fitter."
He said £1 billion in funding has been provided to help the grassroots, elite and leisure sectors, adding: "Working with the government, Sport England has now set out a 10-year strategy which focuses on driving up activity levels, helping to improve physical and mental health, and supporting our clear commitment to young people taking part in 60 minutes of physical activity a day, and adults two-and-a-half hours a week."