Thirty years ago this week, Aston Villa successfully began their defence of the European Cup by knocking out Besiktas of Turkey before going on to blitz Dinamo Bucharest 6-2 on aggregate. They were eventually eliminated by Juventus but would finish the season in the top six of the Football League, with Nottingham Forest, another Midlands club who had (twice) won the European Cup, ahead of them and five other teams from the area in the top division, about to be joined by the promoted Wolves and Leicester.

From nine clubs at that high-water mark in 1983, representation sank by 2006 to just one. And before local derbies reecntly in the Premier League – Villa against West Bromwich Albion, and in the Championship, the A52 dust-up between Nottingham Forest and Derby County – the consensus of Midlands observers is that the footballing health of the region where a Villa director, William McGregor, first came up with the idea of a Football League is sickly.

It was an irony that more than 100 years after McGregor ruled no town or city should have more than one club in his original League, Villa should have ended up six years ago as the only one from the whole of the Midlands in the top echelon. Relegated for only brief spells, they remain the region's biggest club, finishing highest for 17 of the 20 Premier League seasons. Yet they never threatened to win it, and since Martin O'Neill walked out on the eve of the season two years ago, the suspicion remains that ambition has been downgraded.

"The Aston Villa story is puzzling, because they do have a regional following and could be the leading club in the Midlands," says Professor Wyn Grant from the University of Warwick. "But Randy Lerner seems to have decided that it would cost too much to compete with the Manchester clubs. Attendances have declined."

The key moment was when James Milner followed Gareth Barry's path from Villa to Manchester City but O'Neill was not allowed to spend the proceeds, prompting his resignation. Dion Dublin, a native of Leicester who played for his hometown club after Coventry and Villa, believes that was a mistake from which the club may not recover: "They had one of the best managers in Britain, who always gets results over a period of time given his chance to put his stamp on a team. But if you're going to question who he wants to buy, you'll lose managers, and they lost one of the best."

Having also played for Norwich City, Dublin says the present incumbent at Villa, Paul Lambert, will find his new job to be on a different level from the Norfolk club. "Mr Lambert is a very good manager but it's a completely different prospect managing Norwich from managing Villa. In Norwich there's Norwich City football club and that's it. Come to the Midlands, you've got eight or nine other clubs who hate you straight away.

"If the fans are happy, it comes easy, but at the moment the fans are not happy. Alex McLeish [sacked by Villa after one season] is a good manager, but having come straight from Blues [Birmingham City] he was on a bit of a loser from the start."

The paradox is that the region's current success story, West Bromwich Albion, are succeeding either despite or because of the same policy of stricter housekeeping that Lerner has employed. When they were lasting only one season at a time in the Premier League, the chairman, Jeremy Peace, was a regular target of abuse. Now West Brom are held up as a model.

Dr Sue Bridgewater, who runs the League Managers Association's course for aspiring managers in Warwick, says: "On our course we've asked how you can structure to give yourself the best chance of building something without having to go out and buy a lot of expensive players on big contracts. West Brom built well and now we're not thinking of them as a yo-yo club. As a board you're thinking, 'Let's be careful', not jeopardise the future of the club. I come across a lot of positive reaction to Randy Lerner, who's come across as a benefactor and not someone who's done a leveraged buy-out like Manchester United's, so fair play for that. It's not easy to know how to break into the Champions' League tier. What level of investment, and how likely is the return? You might gain £30 million by being in the Champions' League. But how much do you have to spend to get there?"

In the Black Country and beyond, Wolves and Stoke have adopted the same attitude. In the East Midlands, meanwhile, Derby, Forest and Leicester regularly push for the Championship play-offs on good gates of 20-25,000 but remain a long way from former glories that were essentially overachievement inspired respectively by Brian Clough and his former acolyte O'Neill.

The saddest tale is that of Coventry City, at their lowest ebb for half a century near the bottom of League One, whose fate more than any other club in the region may be tied up with the boom and bust of the local economy, the motor industry in particular.

Dublin felt they lacked ambition even when he was there: "All we did was stay up but that was regarded as an achievement. We stayed up twice and we were regarded as heroes." Professor Grant says: "The rise of the Sky Blues coincided with the boom years in Coventry. I think their problems are related to the move from Highfield Road and the subsequent acquisition by [hedge fund] Sisu.

"There was an imperative to move from Highfield Road as it was inadequate for a then Premier League club and could not be readily improved. The Ricoh was meant to assist in the regeneration of north Coventry, but this has not happened, e.g. hotel developments have not taken place. It's a fine stadium, as we saw during the Olympics, but too big for the Championship, let alone League One football. And Coventry City don't own it. Sisu seemed to think they could make money out of a football club but have been inept at running it."

As titles go, the rank of leading Midlands club may be lacking in wow factor, but for West Bromwich Albion's captain, Chris Brunt, it is a sign that his club at least are on an upwards curve.

Albion were the region's top dogs last season for the first time since 1979, when Ron Atkinson's side featuring Bryan Robson, Cyrille Regis and Laurie Cunningham finished third in the old First Division. They ended 2011-12 in 10th place, nine points clear of Villa, with a first win at Villa Park since 1982. And this season they have made their best top-flight start since '79.

Villa have history on their side – "big club, big stadium, big fan base" – but Brunt sees Albion as a team "on the up": "We keep improving every season and if people tend to regard us as the best team in the area that is great, but that is just credit to what's gone on at the club over the last five or six years especially."

That progress has continued under Steve Clarke, Roy Hodgson's successor as manager. Albion's attacking armoury includes Shane Long, Romelu Lukaku and Peter Odemwingie. "The squad is a lot stronger and we have a lot more attacking options than we had last year as well," said Brunt. "Defensively we've probably been better as well – we've had three clean sheets at home. We're just all round probably a better Premier League team; we just know how to win games."