Thursday, 19 July 2012

African businesses haven’t had their share of the 2012 Olympics bonanza, claims BAME groups

This article was initially written months ago for an African business publication. With Olympics 2012 almost upon us, and in light of the recent last moment but spirited campaign to get African British newspaper The Voice an Olympics 2012 media accreditation, I've reproduced it here for wider circulation.

African businesses haven’t had their share of the 2012 Olympics bonanza, claims BAME groups

This summer, the world’s eyes will be upon London, as it hosts the Olympic games from 27 July to 12 August. As it will be the first city to host it for a third time, having been Olympic city in 1908 and 1948, the expectations are especially high for London to get it right.

But whilst Britain will no doubt be showing its best PR face for the world
to see, and expecting its contingent of athletes, which includes African Brits such as long distance runner Mo Farah and triple jumper Phillips Idowu, to win some precious medals, there are rumblings within London’s African and ethnic minority communities even before the first start pistol has been fired.

Some of London’s small African-led businesses, which are lumped under the so-called Black, Asian and Minority Ethnic (BAME) category, claim they have hardly had the share of the Olympics contracts and other business opportunities they had expected. A lot was promised to small and ethnic minority-led businesses from 2005, when London won the Olympics bid.

Indeed, the London 2012 Olympics bid was won on the diversity and equal inclusion ticket. Even Nelson Mandela endorsed London’s bid, citing the diversity of London's communities for providing the ideal setting for the Olympics. The London Organising Committee of the Olympic Games and Paralympic Games (LOCOG) talks about how central this was within its strategy. It states in one of its documents that “during the bid process diversity was a key reason why London, one of the most multicultural cities in the world, was chosen to host the 2012 Games.”

In order to cater especially for small suppliers, CompeteFor was created. Described as a “business dating” agency, its developers include London Development Agency (LDA), LOCOG, the Olympic Delivery
Authority (ODA), and London Business Network. It’s a free website dedicated to helping small and medium-sized (SME) businesses find and apply for contracts, by providing a brokerage service between buyers throughout the London 2012 Olympics supply chain.

It was meant to provide a transparent and level-playing field whereby
businesses with the required capabilities are offered appropriate contracts to bid for.

Good idea, except that the majority of African and ethnic minority-led
businesses are actually micro businesses, which the EU defines as one with less than 10 employees and less than 2 million euros (£1.7 million) annual turnover. Whereas a small enterprise is one that has under 50 employees staff and an annual turnover of up to 10 million euros (£8.4 million), whilst a Medium Enterprise is one that that has 50-249 employees and an annual turnover of 50 millio euros (£41.7 million). Hence, many BAME-led businesses in this category seem to be excluded from the procurement process because of the SME threshold.

It's no wonder there’s a perception that CompeteFor is little more than window dressing to tick the diversity and inclusion boxes. Many of the BAME SMEs that do qualify and have registered on the CompeteFor website are simply not satisfied, according to Engage Enterprise, a London organisation founded in 2006 to deal with diversity issues within the supply chain on behalf of small and BAME-led businesses.

“You bid for it and never hear anything from them,” says Engage Enterprise boss Craig Cordice, who actually did feed into the beginning of CompeteFor, which was created in 2007. “We were just put on there  just to make up the numbers,” he adds, saying he’s got evidence from his organisation’s contacts. CompleteFor was giving an opportunity to respond, but had not done so by the time this article was submitted.
Some within London’s African and ethnic minority business community feel they’ve been “carved out of the Olympics contracts”, and have teamed up with Engage Enterprise to launch the Burning Injustice petition (

It’s an on-going process aimed at producing “a level-playing field”, and the results are to be used to explore any last minute Olympic opportunities and feed into the post-Olympics evaluations. Also, Cordice feels lessons learnt from this Olympics procurement investigation can be used to give African and ethnic minority-led businesses a fair chance of getting their share of other large-scale developments across London, such as Crossrail, which with a £15.9 billion budget, is Europe’s biggest construction project.

Bearing in mind their disadvantage in winning contracts directly, Cordice tried to get small businesses to look at sub-contractor opportunities. But from his experience, a lot of the big businesses that won contracts stating they would be using small, local businesses as sub-contractors, simply have not done so. And there are neither proper monitoring nor sanctions to compel the big businesses to use small sub-contractors, claims Cordice.

CompeteFor was created specifically to address a long-known fact, which is that small businesses have difficulties achieving any meaningful stakes in large-scale public developments. One of the reasons, apart from not having long and proven track records, is that they are usually too small with poor prospects for growth.

As if it was worth pointing out, last December, Leicester-based Minority Supplier Development UK (MSDUK) published research showing that lack of access to finance for ethnic minority SMEs is a major barrier to growth. “Ethnic minority business owners would like to grow their business, but lack of sufficient finance opportunities currently stand in their way,” says the report of a survey of over 300 businesses in which 1 in 2 respondents said that they had applied for bank finance in the last 18-24 months, and of which 60% had been unsuccessful.

Interestingly, last November, deputy prime minister Nick Clegg spoke about the discrimination against ethnic minorities by British banks in the way they distribute loans and set interest rates. “If all black entrepreneurs and businesses could borrow, compete and grow on equal terms, our whole economy would grow faster. Jobs would be created in every community,” said the minister, adding: “So now is the moment to unleash black talent, ethnic minority talent, for the good of us all.”

For Cordice, not seeing Clegg’s sentiments being translated in the way the
Olympics’ £9.3 billion budget has trickled down to small and BAME-led businesses, isn’t something new.

Engage Enterprise has had former prime minister Tony Blair and London Mayor Boris Johnson lend their support to his organisation in the past with fine words about the “highly significant contributions” made to the British
economy by the BAME community, which is projected to rise from 40% to 80% of London’s working age population by 2014.

But figures revealed thus far do not match the fine words, especially as London’s Olympics bid was won on a commitment to diversity and inclusion. According to a CompeteFor souce, nationally, around 74% of contracts made available via CompeteFor have been awarded to SMEs, with approximately two thirds going to businesses located outside of London.  Crucially, only around 6.2% nationally (15.9% within London) of these contracts were awarded to BAME-led businesses.

45,000 are London-based  out of over 157,000 businesses have so far registered on CompeteFor, of which around 27,000 businesses have been anonymously shortlisted for over 10,700 contract opportunities. The budget through CompeteFor is around £2 billion. There are two other sources for procurement – LOCOG, which is expected to generate the £750 million needed to host the Olympic games, and ODA, which with a budget of over £6 billion, is responsible for the delivery of the venues and physical infrastructure for the games. However, this are not viable routes for most small businesses, simply because they offer mainly high tier contracts.

For the developers of CompeteFor, this “businress dating” agency has been a success. This is what LDA’s chief executive Lurene Joseph had to say: “From the start, we wanted to open up London 2012 contracts to competition and, through CompeteFor, thousands of small businesses are now benefitting from the opportunities brought by 2012 and the regeneration of east London.”

However, the Olympics is not just about the sports events that take place over a few weeks, and what businesses want out of it. A whole raft of regeneration and employment projects have come before it, and a positive lasting legacy has been planned for long after the last strains of
victory cheers.

According to official figures, LOCOG estimates that around 7,000 direct contracts, with the potential for 25,000 supply chain opportunities would have been created by the Olympics. ODA planned for around 10,000 contracts dealing with the majority of the contracts for the infrastructure, transport and construction of the Olympic parks.

The LDA announced a £9 million funding package to support employment and skills in the run-up to the Games. It launched an £11 million Opportunities Fund aimed at ensuring Londoners were able to  take advantage of Olympics employment opportunities. It also also set up the Olympic Park Legacy Company to transform the Olympic Park site after 2012, to ensure a lasting physical legacy from the Olympics.

Additionally, over 6,200 residents of one of the five host boroughs have received employment support via LDA programmes, and almost 2,300 have secured employment. Over 12,000 people from across  London have benefited from construction training, directly funded by the LDA and its partners. Of those trained, 5,722 have been residents of the five host boroughs.

A total of 25,000 previously unemployed Londoners have been assisted into jobs through the London Employment & Skills Taskforce for 2012. Of these, more than 50% are residents of the five host east London boroughs.

Finally, there are some Londoners who are simply not interested in the
Olympics, but they still have to pay for it, whether directly or indirectly. Like this writer, who recently had parking restrictions put on his street, simply because it’s a few miles from Wembley stadium, which is one
of the Olympic locations. He now has to pay to park in front of his house.
© 2012 Kwaku


  1. It is not surprising that African businesses are frozen out of these contracts. The minute the Labour government started bundling instead of unbundling contracts and awarded contracts based on efficiency in delivery and financial muscle rather than the effectiveness of the outcomes, we were bound to be outside the stakes. Unfortunately the Conservatives were keen to continue this bundling and all governmental institutions have taken it up.
    We cannot protest effectively because we are not united, we cannot be united because there is not binding objective that we can rally around. Those that have attempted to protest, the response has been silent.
    If we are to move forward as a people and to make an impact for the sake of our children and those yet unborn in this country then we must seriously start exploring how we can set up a national multifaceted institution to advocate on our behalf.

  2. Thanks for feedback

    I'm not sure we all need to unite for things to happen.

    A case in point is that it took an individual outside of The Voice to get a campaign going for the newspaper to be given an Olympics media accreditation; to some extent, the same happened when a community organisation galvinised people to write and phone councillors and to be at the premises of Voice of Africa Radio, in order to resist a planned eviction of the station. Both got the right results.

    In any case how could these businesses have united?
    Engage Enterprise initiated the Burning injustice campaign - I wonder how many businesses responded?