THE Government has a crucial role to play this year in the development of the Tees Valley, according to one of the region's senior spokesmen.

Alistair Arkley, chairman of Tees Valley Partnership, said reviewing the criteria for regional aid and a report on the relocation of public sector jobs would be vital.

The Tees Valley has made a strong case to house any civil service departments moved to the regions in the wake of the Lyons Review.

The area was also heartened by indications from London that the rules governing Regional Selective Assistance grants could be changed.

The Government is considering awarding grants on the basis of the benefit they would bring to the local economy rather than focusing on the number of jobs they might create.

Mr Arkley said: "Over recent years, the Tees Valley has led the way in making the case that in key industries, especially manufacturing and the chemicals sector, the Government grants system should reflect not simply the immediate number of jobs created by a patricular project but the wider impact on the continuing viability of the industry as a whole.

"The integrated nature of the chemicals sector means that one plant may supply materials vital to other parts of the local complex and companies in other parts of the country which can employ very large numbers of people.

"Without these supplies the plants may close and their owners move production abroad.

"The Tees Valley chemicals complex supports 20,000 jobs locally and almost 50,000 people in other parts of the UK depend on it for their jobs, which is why the review of the Government's system of Regional Selective Assistance grants is so important."