The inclusion of ethnic and racial groups through participation is a key concern for planners, but far too little attention has been given to the way that groups become identified. Ethnic identity is presumed to be self-evident. Drawing on the political theory of Young and Gilroy the paper questions the basis for ethnic identity as a group membership. These theorists suggest that through attention to relationships between ethnic groups we can open up space to challenge existing ethnic power relations. The paper draws upon qualitative research in two English local authorities to explore how long-standing conceptualisations of ethnicity act to diminish the positive contribution that attention to difference can have. The findings suggest that planners make positive efforts to understand ethnic difference and engage with community groups. However, the identification of groups is not a neutral or objective process, but instead is power-ridden. This article argues that the progressive edge of planning and efforts of planners are undermined if we do not interrogate the basis for the understanding of ethnic difference.