Pathfinder asks bidders to spend 50% of budget with local suppliers and help those run by ethnic minorities

The procurement rules for regeneration contracts in east Lancashire have been drawn up to encourage the involvement of local firms, especially those run by ethnic minorities.

The initiative, by housing market renewal pathfinder Elevate East Lancashire, has emerged in one of the most racially divided areas of the UK at a time of heightened tensions between white and Asian communities.

In accordance with Elevate’s plan, the six firms that are negotiating to be lead developer in Burnley have agreed to spend at least half of their budgets on local businesses. There is no stipulation on the racial composition of those companies, although black and minority ethnic (BME) firms will be given help to bid for contracts.

Elevate East Lancashire, one of nine housing market renewal pathfinders working in the North and Midlands, is piloting the approach and plans to extend it to the four other councils in the region. The aim is to promote community cohesion.

Max Steinberg, chief executive of Elevate, said: “If we can encourage BME operators to get involved, that helps to foster community cohesion. This is a central role to what we are doing in the pathfinder and very welcome. It is entirely appropriate to pursue this strategy.”

If we encourage ethnic minority firms, that helps with community cohesion

Max Steinberg, Elevate

The pathfinder is updating its spending plans but in 2003 estimated it would spend £900m in public and private funds. It is working with the Asian Business Federation on the strategy.

The three elements of Elevate’s plan to ensure the regeneration funding is spent locally are:

  • The lead developer for each of the five local authorities in the pathfinder to spend at least 50% of its budget through local businesses.
  • Elevate and councils to help BME firms bid for contracts such as refurbishments.
  • BMEs and local people to be trained in construction and design to boost the region’s skills capacity.
Terry Fuller, chairman of the affordable housing group of the Home Builders Federation, said: “It is not that unusual for local authorities to do this type of thing for local communities. But on this scale it is slightly different.”