Everyone agrees that the UK needs more economic growth. This is a laudable aim; a lack of growth is the root of many of our country’s woes. Without it, re-investing in the NHS, paying for net-zero and reducing crime will be a challenge.
In response, the government has defined itself as the government of growth; with growth supposed to be the singular stick of rock that runs through all its activity. It has driven a blizzard of announcements in 2025, from support for a third runway at Heathrow to making it easier to build small nuclear reactors.
However, focusing primarily on economic infrastructure alone will not deliver the government’s ambitions. Yes, we need more investment in capital investment. But the economics literature tells us that what makes those investments payoff is what we might call, borrowing from health policy, the ‘social determinants of growth’.
What are the social determinants of growth? They are the bonds and bridges of social capital that bring people together, that give them the confidence to plan for the future and that makes them willing to make sacrifices for the collective interest. As Putman puts it, social capital “refers to features of social organisation such as networks, norms and social trust that facilitate coordination and cooperation for mutual benefit.” Social capital is built through social infrastructure, what the Bennett Institute has described as the “physical and community facilities which bring people together to build meaningful relationships”. The community centres, the sports clubs, the parks and pubs and all the panoply of social institutions that bring people together.
A quick canter through British history shows us the power of this infrastructure in driving our economy. The political and social transformation in the 17th and 18th centuries paved the way for the Industrial Revolution through the spread of new ideas. Once the revolution started economists such as Nobel Laureate in Economics, Douglass C. North, have found that it was Britain’s social institutions where people from differing backgrounds could work together, invest together and pool risk, enabling the Industrial Revolution to spread. More recently, research from Andy Haldane and David Halpern, published by Demos, found that higher levels of social capital is strongly linked to higher levels of GDP growth and productivity. In the long run and the short run, social capital is critical.
Post-war governments equally understood the importance of social infrastructure. The period after the war was not just a period of economic investment, but social and civic institution building. New roads, public services and factories came with new community centres, sports facilities and youth services. These social foundations meant that areas could benefit from full employment and investments of private and public capital. Their erosion over the past thirty years coincided with a steady reduction in growth and its narrowing into those places that have been able to retain their social infrastructure.
The last Labour government tried to tackle this decline by kicking off a decade-long process of neighbourhood renewal. At its centre was the New Deal for Communities, a pioneering programme providing 39 communities of an average of around 10,000 residents with around £50m each over 10 years. A partnership model was used for decision-making, including local residents and local councillors, primary care trusts and the police. Normally residents were in the majority on the decision-making boards.
After so much policy failure and churn in recent years, we can sometimes forget that long-term, evidence-based policy is possible – and that it works. The New Deal for Communities certainly did. Crime – down. Health – up. Satisfaction – up. The programme’s evaluation – one of the most rigorous in the world – concluded that “… in many respects these neighbourhoods have been transformed in the last 10 years.” The NDC was cost effective too; in government spending terms, £2bn to transform dozens of deprived neighbourhoods is remarkably good value for money. We also know that such approaches align closely to the government’s five missions, particularly growth, health and crime.
Unfortunately, austerity, as well as a lack of awareness amongst policy makers of the importance of social infrastructure, has seen it taken for granted and wither away. Two thirds of council-funded youth centres have been closed in England since 2010. At least 214 playground facilities have closed since 2014. More than 7,000 pubs have closed in the last decade or so. Ultimately, local people will sustain social infrastructure but they need the active and full-throated backing of government, otherwise the scale of the challenge will simply be too great for them to overcome.
Continuing to ignore social infrastructure would be costly for the new government. Analysis conducted by the Centre for Progressive Policy has also found that ‘doubly disadvantaged’ areas, neighbourhoods without strong social infrastructure, are more economically isolated. This means that doubly disadvantaged places are less affected by the economic circumstances of their neighbours, over time, than other places.
Without investment in the social infrastructure of neighbourhoods we cannot expect them to gain from increased public and private investment or assume that they will gain access to the jobs that will be created by those investments.
Growth, growth, growth looks set to remain the mantra. But at the upcoming Spending Review, youth clubs and green spaces should get as much attention as runways and roads. Only then will growth be achieved in the long run and spread throughout the country; that is the lesson from both recent and comparatively ancient history.
Ben Glover and Andrew O’Brien work at The Independent Commission on Neighbourhoods (ICON)