A failure to meet important targets has led to £2 million being slashed from the West Midlands' annual transport grant for small projects from the Government.

A sharp fall in bus patronage and failure to sufficiently increase light rail passenger numbers are the main reasons for the cut from an indicated £44.6 million to the actual grant of £42.4 million.

The small projects block of Local Transport Plan allocation to the conurbation's seven authorities was reduced by five per cent because progress on "core performance targets" was only ranked as "fair" by the Department for Transport.

Other local authorities that have reported "excellent" transport performance have seen their allocations increased by 12.5 per cent.

Overall, the conurbation has been awarded £188 million for the next year, a figure which includes ongoing work on major schemes and highway maintenance.

The West Midlands' LTP document for future transport cash - submitted in July - was ranked as "promising" by the DfT but it criticised the conurbation for not addressing congestion in the short term, despite greater emphasis on the problem by the region's politicians.

The West Midlands is being courted by the DfT to pilot a road user charging scheme and is currently working on a feasibility study thanks to a grant of £2.6 million from the Government's Transport Innovation Fund.

However, in a letter to the region, the DfT states: "Congestion has been flagged up as the most important problem the West Midlands has to tackle and whilst the recent announcement of support from the Transport Innovation Fund should help to develop longer term solutions, we would like to see a clear strategy for addressing congestion in the short term."

Moving on to performance indicators, the letter says: "Of the five relevant core targets, West Midlands are on track to achieve the two road casualty reduction indicators.

"Bus patronage has continued to fall and no progress has been made against either the cycling or the light rail patronage targets.

"There is little prospect of the cycling target being achieved but It was accepted that there are future proposals which could see the light rail and bus patronage targets being met."

It also reveals the West Midlands underspent on cycling schemes by more than £1 million, which the DfT described as "disappointing, particularly given the continued poor performance in achieving the cycling target".

A spokesman for the West Midlands LTP team said, despite some criticism, the region was still awarded the biggest amount of any English conurbation outside London.

"The Government has praised the West Midlands for its transport delivery and for the way we are involving local stakeholders in the development of our transport plans.

"Of course there is still work to be done. The final LTP is not submitted to Government until March next year and we will continue to develop it.

"Many of the points raised by Government have already been addressed since this document was last submitted in July, particularly those around tackling congestion in the short term, value for money and our transport targets. We are still waiting for approval of a number of important major transport schemes, including an Urban Traffic Control scheme for the West Midlands.

"Having had the good news about Government funding for a West Midlands congestion study, we are very keen to make progress on these vital local schemes."

Unlike previous LTP settlements, the allocation of money for major projects - including the upgrade of New Street Station and expansion of the Midland Metro network - has been put back until the spring because of the Government's desire to see greater work done by the regions on transport.