ON A steamy July day, as the temperatures soared in Whitehall, a meeting of senior ministers, business and union leaders and race campaigners put the final touches to some coolly ambitious plans.

The Ethnic Minority Employment Taskforce, set up three years ago to tackle unemployment among black and Asian people, approved the Government’s first moves to question firms seeking to win government contracts about the ethnic make-up of their workforce.

Ministers present included John Healey, Financial Secretary to the Treasury; Jim Fitzpatrick, DTI; Lord Adonis, Education; Richard Caborn, from Culture, Media and Sport; Pat McFadden, Parliamentary Secretary at the Cabinet Office ; and Meg Mann, from the Department for Communities and Local Government.

Trevor Phillips, the chairman of the Commission for Racial Equality, was also present, as were representatives of the Confederation of British Industry and the Trades Union Congress.

Together they authorised three pilot projects in which companies bidding for contracts would be questioned over their employment of ethnic minorities and asked to account for those numbers.

Their plans, based on controversial US policies of “positively vetting” firms seeking public contracts, may be extended to cover a large proportion of the Government’s £100 billion a year expenditure on projects.

Iqbal Wahhab, 42, a Bangladeshi-born entrepreneur and founder of such London restaurants as The Cinnamon Club and Roast, is a member of the task force. He said: “Ministers were very encouraging of this scheme. They could see that this is possibly the only way to get a substantial reduction in ethnic unemployment.”

One pilot project is to be implemented in Jobcentre Plus offices. When firms bid for contracts with the organisation to supply training and courses for the unemployed, the ethnic backgrounds of their existing workforce will be scrutinised as part of the contract process.

A separate Home Office scheme will use ethnic monitoring when seeking tenders for temporary staff contracts in the much-criticised Identity and Passport Agency. Another pilot scheme has been authorised for the Department for Education and Skills, details of which are still being finalised.

Minutes from the meeting conclude that the scheme will only work properly if it is enforced across all government departments. “If we are to make a significant impact on ethnic minority employment rates and earnings, we would need a government-wide application of policies to promote equality in suppliers’ workforces and a mechanism to support and enforce it.”

The minutes add that civil servants have examined the US Government’s schemes to increase the number of black workers through ethnic monitoring. “We have begun to consider options for what this may look like including looking at the role of the US Department for Labor’s Office of Federal Contract Compliance Programmes and the creation of a database for pools of labour.”

In the US, companies with more than 50 employees working on federal government contracts worth more than $50,000 (£26,000) must develop an affirmative action plan.

Members of the taskforce are keen to emphasise that external factors, which may affect the number of ethnic minority employees in a company, will also be taken into account.

Firms based in rural areas are less likely to have ethnic minority employees because most black and Asian people live in urban areas, the source said. Companies that work in specialist areas, such as construction, will not be expected to employ large numbers of Asian women, who are less likely to work outdoors.

It is understood that ministers will only wish to apply the criteria to large companies. Firms with less than 100 employees may not be expected to reflect the ethnic make up of their local communities.

Business leaders remained sceptical yesterday. John Cridland, the CBI’s deputy director-general, said that the Government’s new scheme would be watched closely by entrepreneurs who are concerned that they may lead to an introduction of “racial quotas”.

“Business supports the sensible use of procurement to promote ethnic employment, but quotas are blunt instruments that do not address the real cultural and educational issues that need tackling,” he said.

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