Business leaders in Birmingham have welcomed Government plans to invest more than #150 million in the West Midlands public transport network – but insist much more still needs to be done.

Transport Secretary Douglas Alexander yesterday judged the region's Local Transport Plan to be "excellent" and announced funding for a wide range of improvements, including new road safety measures, better street lighting, road maintenance, park and ride facilities and cycle lanes.

The new money is in addition to a #185 million package for the West Midlands, announced earlier this year.

But Mr Alexander's announcement does not bring any nearer delivery of the region's key transport projects – the refurbishment of New Street Station, extension of the Midland Metro tram system, four-tracking of the West Coast Rail Line and widening of the M6, M5 and M42.

James Cooper, policy adviser at Birmingham Chamber of Commerce and Industry, said: "Businesses in the West Midlands will welcome today’s announcement of #155 million of funding. Unfortunately, this will not deliver the big wins we need in the region to deliver real improvements to the connectivity of West Midlands and its attractiveness as a place in which to invest or locate a business.

"Schemes such as the regeneration of New Street Station, which, to put into context, requires #350 million of Government funding alone, are a priority for the business community.

"The region also badly needs the delivery of road schemes such as a widening of the M42 between the M40 and M6, with improvements at junctions 6 and 7, the rolling out of active traffic management systems around the Birmingham motorways box and more routes that open up the Black Country, all of which require significant investment."

In a separate announcement by Mr Alexander, it was confirmed that long-awaited improvements to rail links between Peterborough and Nuneaton, and Southampton and Birmingham will go ahead.

The decision means that freight travelling by rail from the West Midlands to the east coast ports will no longer have to go via London.

The move was welcomed by Advantage West Midlands chairman Nick Paul: "At the moment, we have the ludicrous situation in the West Midlands of our rail freight having to go through London to get to ports on the east and south coasts.

"So companies tend to opt instead to move their freight by road. And who can blame them? But more lorries on the road means more congestion for everybody which holds back our economic progress.

"Today’s announcement is the first step towards addressing this nonsense."