Racial equality could be set back 10 years if the Audit Commission takes over the role of inspections, leading black and minority ethnic housing chiefs have warned.
Anil Singh, chief executive of Manningham Housing Association, said: "Race equality and the Audit Commission don't appear to be on speaking terms.

"The Housing Corporation has championed issues with the regulatory function, and the commitment to racial equality comes from the top and filters down throughout the whole organisation."

Singh argued the Audit Commission's wide remit means that it will not prioritise race and equality.

He said the social housing sector may question whether the issue is really about "preserving jobs for the boys in the commission", given that it is to lose some of its health and social services roles.

He called on deputy prime minister John Prescott to consult with BME housing associations over the matter.

His concerns were echoed by Leslie Laniyan, chair of the Federation of Black Housing Organisations, who said: "It has taken a long time for the Housing Corporation to recognise the fact that inspections need to have a BME perspective.

"The record of local authorities isn't wonderful – and as the Audit Commission has been inspecting them from the start, it doesn't instil much confidence."

However Roy Irwin, chief housing inspector at the Audit Commission said: "Race and diversity is one of the major factors we look at when assessing how well an authority serves local people.

"When we have criticised poor performers, equality is often a deciding factor in that.

"The commission promotes good practice not only through inspection, but national studies. Housing associations may not be fully aware of the range of work we do."

National Housing Federation deputy chief executive James Tickell said: "Our main concern is the independence of our members.

"The Audit Commission regulates the public sector and it may give the wrong signal if our members are seen to be regulated by a public sector body."