Are Policymakers Finally Ready to Invest in Social Capital Projects that Work?

Are Policymakers Finally Ready to Invest in Social Capital Projects that Work?

Associate Director of the Institute for Community Studies says the Levelling Up agenda could be a springboard for investment in infrastructure that supports social capital in our communities.

Richard Harries

Social capital is back in fashion and that can only be a good thing.

Of course, for a certain class of analyst and policymaker – of which I am one – it never went out of fashion, but for everyone else it is a curious concept that can often seem like the miracle cure for all our social ills. Worried about youth crime?  Concerned about health inequalities?  Want to level up the country?  All will be well if we just ‘invest in social capital’.

The reason the fortunes of this enticing academic concept have waxed and waned over the years is down to the difficulty of translating it into practical actions with a causal logic that can be clearly defined and empirically measured.

The Levelling Up White Paper could change everything. The term appears more than 25 times and is a core part of the government’s new “framework for evaluating geographical disparities”, alongside five other capitals: physical, intangible, human, financial and institutional. Indeed, according to Levelling Up Tsar, Andy Haldane, “of all the capitals that collapsed during COVID-19, social capital was the one that stood tall”.

The acknowledgement of a link between social infrastructure and social capital, the commitment to experimentation and the development of new measurement methodologies all cohere at a moment when the country most needs it. Perhaps this time, social capital is here to stay.


An excellent introduction to social capital can be found in this recent IPPO blog by Sir Geoff Mulgan, Dr Rachel France and Professor Joanna Chataway who together explore the role it played during the pandemic and ask how it might be ‘harnessed’ for the recovery. Their tl;dr takeaway is this: social capital comes in three flavours (bonding, bridging, linking), there is plenty of evidence connecting it to improved socio-economic outcomes, and it is most effective when drawn on by local communities themselves rather than being micro-managed from above.

This is not the first time that social capital has been lauded by policymakers. It first rose to prominence in the early years of New Labour, when “things could only get better”, before catching a second wind in the heady Big Society days of the 2010 Coalition government. Yet, despite repeated appearances on the policymaking landscape over the last 20 years, little is really known about how social capital is generated, maintained or distributed. Loose talk about ‘investing in social capital’ and ‘harnessing it’ for policy ends remain just that: loose talk.

This is important. The Levelling Up White Paper commits the government to investing its £2.6 billion UK Shared Prosperity Fund “in the places where social capital is weakest”. Yet elsewhere the same document suggests that “The distribution of social capital depends on how it is measured and experienced by people.” If levelling up is not to go the same way as so many previous government attempts at regeneration, then someone needs to find a way of reconciling these two irreconcilable statements.

What happens next?

There are, however, at least two reasons to be optimistic this time around. First and foremost is the clear commitment in the White Paper to experimentation; a recognition that while there are “legitimate reasons to avoid randomisation in some areas of government policy … there is clearly room to make greater use of experimental methods.” If ministers are serious about this, their officials could profitably review the methodology originally developed by the grant maker Power to Change and now curated by the Institute for Community Studies for robustly measuring population change at the hyper-local level.

This quasi-experimental approach, based on the long-established and well-respected Community Life Survey, allows evaluators move beyond traditional statistical measures of association to make strong statements about the presence (or not) of causal relationships. It adopts some of the same techniques for analysing data from natural experiments that were developed by last year’s Nobel Economics Prize winners and takes two clear steps up Judea Pearl’s ladder of causality, from the associational to the counterfactual. Perhaps more important in these circumstances, it is fully compliant with the Treasury’s Green Book guidance on project appraisal and evaluation.

The other reason to be cheerful is a long-overdue recognition of the vital importance of ‘social infrastructure’ as a key generator of social capital. Just as economic development depends on the provision of roads, railways, sewers and other forms of physical infrastructure, so our social development depends upon the spaces and institutions that facilitate relationship building within and between communities. While demands to ‘invest in social capital’ make no sense at all, it does make sense to invest in social infrastructure.

The government’s announcement that it’s Levelling Up Advisory Council will be supported by an expert sub-committee for “local communities and social infrastructure” is therefore a most welcome development. The Institute for Community Studies and Bennett Institute for Public Policy, under the guidance of Dame Julia Unwin and in collaboration with the British Academy and Power to Change, is gathering evidence right now about different countries’ approaches to social infrastructure as well as learning what real communities in the UK think matters most. This evidence will be essential if investment decisions are to be targeted to the areas where they will have greatest impact.