Councils have been angered by a Department for Transport decision to keep a ringfence round a new fund for local sustainable transport projects.
The £560m fund is one of few additional source of money offered by the spending review.
It is intended to pay for transport works that will improve local economies or tackle environmental problems.
The DfT said its mix of £350m in resource spending and £210m in capital
had been agreed with councils, but the Local Government Association said the new fund “should be rolled into general funding to councils, not subject to separate bidding processes”.
It added: “We are very disappointed that DfT has opted out of the simplification of grants seen elsewhere.”
Spending review figures show that capital spending on local authority roads is one of few areas where spending will recover by 2014/15.
Funding stands at £1.62bn this year and will fall to a low of £1.48bn in 2013/14 before rising to £1.66bn the following year.
Resource spending on highways will though suffer a 28% fall from £473m to £420m over the same period.
The LGA condemned this as unfair compared with cuts to trunk road maintenance, and warned the £9.5bn backlog of highway maintenance would worsen, storing up higher long-term costs.
Highway maintenance capital projects will get £3bn over the next four years, a sum the DfT said took account of “the scope for efficiencies, for example through combining the purchasing power of local authorities”.
Matthew Lugg, vice-president of the Association of Directors of Environment, Economy, Planning & Transport said: “The settlement is better than expected in some ways, as in capital spending there is a dip but it seems to recover, though integrated transport schemes have been clobbered.”
The spending review has also removed PFI credits from streelighting projects at Durham and Stockton, Essex, Hertfordshire, Gloucestershire, Kirklees and Warrington.