It comes after Prime Minister Boris Johnson announced £3bn for a “bus revolution” outside London last year that will put an end to the “fragmented, fully commercialised market” which has operated outside London since 1986.
Council leaders and city region mayors were then invited to submit bids for funding and outline their plans to make services cheaper, greener, more frequent and more reliable.
The DfT said it approved bids in areas which have ambitious plans to “repeat the success” seen in London, where there has been a dramatic increase in bus usage since the late 1990s, but bids which failed to show “sufficient ambition” were rejected.
West Yorkshire Combined Authority submitted a bid for £168m, but has been given £70m. While City of York Council wanted £48m and got £17.4m.
North Yorkshire County Council applied for £116m, but it will not receive any funding.
Michael Leah, assistant director for transport, said the council is “extremely disappointed” as it had submitted “a strong and ambitious bid”.
“We are keen to speak to the Department for Transport to understand its decision and to discuss the possibility of any future opportunities to bid for funding," he added.
South Yorkshire Mayoral Combined Authority said it needs at least £430m to transform bus services and it is currently looking at options to bring services back under public control.
But it has not been granted any money under the bus service improvement scheme and South Yorkshire Mayor Dan Jarvis said: “We’ve been shafted”.
He added: “We submitted a visionary and detailed bid to transform our bus services; we needed the central Government to put its money where its mouth is and back our ambition.
“They have once again failed the travelling public in South Yorkshire.
“The Government’s so-called commitment to levelling up – which supposedly has buses at its heart – is nothing more than an empty promise.”
However, South Yorkshire Mayoral Combined Authority is planning to use some of the £570m City Region Sustainable Transport Settlement (CRSTS) it received from the Government to upgrade services.
Around £5.7bn of CRSTS funding for city regions across the country was announced by Chancellor Rishi Sunak during his Autumn Statement in October.
Transport Secretary Grant Shapps said: “Buses are the most popular way of getting around in this country – but for too long people outside of London have had a raw deal.
“The investment we’re making today to ramp up the bus revolution will drive down fares at a time when people’s finances are tight and help connect communities across England.”
The Government has also announced a £23.5m pilot project will begin in Cornwall on Sunday, which will reduce bus fares across the county. Short journeys will be 20 per cent cheaper, with tickets for longer trips reduced by as much as 40 per cent.