An organisation set up 27 years ago to help young black Birmingham entrepreneurs set up their own businesses has gone into administration.

Handsworth-based Community Roots Enterprise Centre was formed in 1982, with the help of £312,000 funding from the city council.

CREC, which played an important role in raising confidence among black and ethnic minority communities following the Handsworth riots, moved to larger offices in Soho Road seven years ago under a new chief executive, Winsome Hutchinson.

It promised “innovative and practical solutions” to the challenges faced by people trying to get started in business.

Ms Hutchinson said at the time that she expected the organisation to grow and begin to provide employment advice for people over 50.

Telephone calls to the premises are being diverted to a voicemail answering machine, and the building is up for sale.

City council cabinet regeneration member Neville Summerfield has agreed a deal with the prospective new owners, which should see the building continue in some form of community use until May 2011 – the date until which CREC had originally said it would offer services in return for being grant-aided.

The council, in return, will agree not to pursue the new owners for return of the £312,000 grant.

The purchaser is not being named until a deal has been concluded, but council regeneration officer Vijay Kundalia said the premises would be maintained “in keeping with the original aims of the grant”.

He added: “The agreement between the city council and the buyer will provide that the premises be used as a facility for wider community training and enterprise development purposes.

“The buyer will agree to continue the original purpose, being to use the venue for training young people, but will also attract all age groups across all communities.

“Given that the communities to be served will have a range of ages, the services need to reflect this. Since CREC had also aspired to provide services for over 50s, women, single parents and youth, we take the view that this flexibility be supported.”