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Ministers have said that the £560m local sustainable transport fund will boost cycling and local buses.
At transport questions today Julian Smith (Con, Skipton and Ripon) said rural constituencies rely on local bus services and asked for that to be taken into account in "the new funding formula".
Transport secretary Philip Hammond said it is not a new formula, but a fund that local authorities can submit bids to.
The fund will back "innovative schemes to support rural bus services".
Shadow transport minister Diana Johnson asked about the impact of the CSR on the bus service operators grant.
Transport minister Norman Baker said there will be a 20 per cent cut in the grant from 2012/13 but the industry is hopeful that "in general" there will not be a rise in fares.
Johnson said the cuts will lead to a reduction in the less profitable bus services," as well as higher fares for people who are struggling already".
Baker said the cut in the grant is less than the average cuts in the department.
"When I spoke to the industry following the spending review announcement, it indicated that the cut was so minimal that it hoped that it could absorb it without fares having to rise."
Caroline Lucas (Green, Brighton Pavilion) complained that the "highly cost-effective" Cycling England has been axed and asked what "plan B" ministers have to deliver cycling's "many benefits".
Baker said the £560m fund will pay out grants over four years to "local transport authorities working with their communities".
He added that the Bikeability scheme has been retained.
"Funding for it will be top-sliced from the local sustainable transport fund," he said.
Baker told the House that bids to the local sustainable transport fund will be regarded more favourably if they have involvement from voluntary community groups.
Shadow transport minister Jim Fitzpatrick said the "accepted wisdom is that cycling is good for health, reduces congestion and reduces emissions".
He said there are " anxieties about the future of cycling".
Baker said cycling is a priority for the government and £560m is "a substantial amount of money for a local fund, by any degree".
Shadow transport secretary Maria Eagle said the country is in chaos, "with passengers forced to sleep at stations, freezing all night on broken-down trains or getting trapped in their cars".
She told MPs the disrpution is costing the economy of up to £1.2bn a day and asked why the findings of the review into last winter's problems being implemented.
Hammond said Eagle has not recognised "the scale of the weather event", involving a "significantly bigger snowfall" than at the start of 2010.
"The findings and recommendations of the review have been implemented ... we can see the extent to which they have been consistently implemented and whether there are any lessons that we can learn from the last few days."
And transport minister Mike Penning revealed that the govenment is considering legislation to lift restrictions on rallying, time trials and races on highways.
"We are looking to deregulate the position so that if local authorities want to hold rallies, time trials or races, they should be allowed to do so," he said.
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