Putting the "Community" in Community Building and

the "Social" in Social Capital:

What Governments Can and Can't Do

Presentation to the Centre for Public Policy, University of Melbourne

Forum on Capacity Building and Social Capital

16 September, 2003

Vern Hughes - Executive Director , Social Enterprise Partnerships

Community capacity building and social capital are terms which governments of all persuasions are now using freely in many areas of social policy and human service provision. There is, however, an enormous amount of misunderstanding within government about these terms and a great deal of misuse of the term social capital. In the perennial rush to be seen to be delivering something, governments are now seeking to deliver stronger communities and to build social capital.

There is, however, one small problem with this. Governments cannot create community, no matter how hard they try, and they cannot build social capital. At best they can create policy environments which assist individuals and institutions in civil society to do these things, or at least, do not stifle their efforts or make their task more difficult. To acknowledge this is not to suggest that governments should simply sit back and hope social capital will grow before them. On the contrary, it is to advocate a radical re-invention of government and a wholesale move away from the old service delivery paradigm in the human services so as to remove some of the key governmental obstacles to civic engagement, responsibility and reciprocity at grass-roots levels of our society.

I will outline the direction in which this reform should occur in four policy areas – community services, indigenous affairs, education and health – by looking at four grass-roots innovations around which a new paradigm is being built.

To begin, a note on our history. It would be a big mistake to think that this current interest in community capacity and social capital is a new interest in Australian history. In the decade from 1915 to 1925 there was a major debate in Australia about the state of our civil society and whether community participation and non-government institutions were weaker and more undeveloped than in comparable western societies. Having achieved a pattern of development which was often called, in the 1890s, ‘colonial governmentalism’, meaning a relatively extensive and interventionist role for the state, the debate by 1920 was about the consequences for community and civil society of this ‘governmentalist’ pattern. Did this phenomenon of Australian statism mean that communities and their capacities were weaker than in Britain or the United States ?

 Sir Keith Hancock’s Australia , first published in 1930, was and remains a seminal text in understanding the Australian statist tradition. Here was a nation, argued Hancock, whose prevailing ideology was ‘the appeal to Government as the instrument of self-realisation’.(1) The course of Australian history had run as follows: the state had preceded civil society; a relatively early achievement of self-government and a democratic franchise had generated a belief that the state could be made an instrument of popular will and social development; extensive state enterprises and interventions in turn discounted the need for autonomous institutions and stifled the development of a vigorous associational life; and a distinctive political culture was formed which regarded leaning upon the state as a natural means of individual and social advancement.

Thus Australian democracy has come to look upon the State as a vast

public utility, whose duty it is to provide the greatest happiness for the

greatest number … To the Australian, the State means collective power

at the service of individualistic ‘rights’. Therefore he sees no opposition

between his individualism and his reliance upon Government.(2)

Hancock identified in Australia a relative absence of intermediate associations between the individual and state of the kind celebrated in de Tocqueville’s Democracy in America. It was this social vacuum between individual and state that generated the habit of what Hancock called ‘leaning upon the state’. ‘As for the industrial and commercial associations which exist in Australia ’, he lamented, ‘they are the constant victims or beneficiaries of political manipulation’. Local government, for its part, was weak, and formed ‘no effective barrier between the isolated individual and the central power’. Without a rich associational life ‘the political parties have almost a monopoly in the manufacture of public opinion’.(3)

But there was twist. The faith in the state created expectations which could never be delivered.

Government, being constantly overstrained, is constantly discredited.

Almost everything is absorbed in politics; but almost everybody believes

those knowing fellows who say that politics is a ‘dirty business’. This is

precisely the danger of credulous idealism, that its disillusioned victims

console themselves with an equally credulous cynicism. Australian

idealism has put too many of its eggs into the political basket.(4)

In the period between 1915 and 1925, there were four social movements that sought to build what we would now call community capacity: labour movement ‘guild socialists’, Catholic distributists in the Belloc and Chesterton mould, adult education activists in the Workers Educational Association, and ‘co-operators’ in the co-operative and friendly society movements. The ‘credulous idealism’ which placed too many eggs in the political basket was their common enemy. And it remains the primary obstacle for contemporary efforts to build community capacity and generate social capital.

Cut to 2003. The social policy debate in Australia is still stuck in this ‘credulous idealism’. In education, health and welfare, politicians are still able to get away with promising more schools, more hospitals, more nurses, more police, as if the volume of government spending in these areas is the primary determinant of good policy or good outcomes. It’s not, of course.

Governments and oppositions would still have us believe that pouring more money into public hospitals will relieve waiting lists. When the demand for health care is growing exponentially, governments seem unable to find alternatives to Australia ’s ballooning hospitalization rates, now the highest in the western world.

And why do governments still try to argue that the drift from public to private education will be stopped by more public sector spending on schools? The more politicians promise greater spending on state schools, the more parents vote with their feet in going private.

The one exception to this trend is in Aboriginal affairs. Largely through the work of Noel Pearson and Richard Ahmat, there is an emerging acceptance that indigenous disadvantage cannot by alleviated by throwing money at it. Pearson’s argument that the condition of ‘passive welfare’ has been generated by the very service delivery paradigm intended to ‘help’ blacks, is now contested by only a few.

Yet the same service delivery paradigm remains intact in education, health and white welfare. In stress-ridden public schools or over-crowded public hospitals or chaotic disability services or in areas of white male welfare dependence, the old paradigm still rules: a plethora of agencies dispense services to disconnected, passive and disempowered ‘clients’ using standardized programs and resources for which the agencies are accountable not to their ‘clients’ but to their funders.

The key relationship in this paradigm is that between public funder and service provider. The end-users or consumers and their relationships and communities are external to this financial relationship. Fashionable references to consumers and communities as ‘stakeholders’ does not alter their systematic exclusion from the financial relationships, and with it, the accountability relationships, in every area of social policy.

It is little wonder, then, that there is an emerging consensus on the ground that this old paradigm in the human services has delivered fragmented, provider-driven outcomes which contribute little to social capital formation, community participation or end-user empowerment.

The good news, however, is that there are many micro-level innovations emerging around the country which are challenging this paradigm and breaking new ground.

Person by Person is an initiative of families of children with severe disabilities in Melbourne . Sick of standardized services for their children, these families have successfully negotiated with the Department of Human Services to have their service entitlements cashed out and administered by a budget-holder of their choice. The families in small groups select and appoint a Support Co-ordinator for their children: the Support Co-ordinator purchases a mix of services chosen by the family (which may be education, home help, day care, singing lessons, respite care) with the budget-holder administering the financial allocations and acting as the employer on behalf of the family. They call this model ‘family governance’.

In Aurukun on Cape York , indigenous families have taken an initiative based on similar principles to deal with alcohol and financial issues. As welfare beneficiaries, the families have arranged for payment of their benefits to an indigenous credit union, with individually negotiated allocations of money going to education, savings, and daily living expenses. This Family Income Management Scheme has cut spending on alcohol drastically in this previously alcohol-ravaged community.

In Noosa, a non-school community organization (Noosa Youth Services) has undertaken the management of a state secondary school on a trial basis. This is effectively a ‘charter school’ where control of the school is given to a community organization with a licence to act independently in educating a mix of students with social and behavioral difficulties and mainstream students. The school is developing projects and employment opportunities around an environmental theme in partnership with businesses and institutions, with a wide variety of community mentoring and voluntary engagement in the educational and social formation of their students.

In Melbourne ’s western suburbs, the only consumer-owned primary health centre in the country is pioneering new models in health care. South Kingsville Health Services Co-op is a community-initiated venture owned and run by its patient-members. It bulk-bills its members for medical services (others pay a fee) and engages dentists and allied health practitioners to provide low-cost services. It attempts to integrate health care with social supports, with volunteer inputs in supporting the sick and elderly and an emphasis on breaking social isolation as a health care strategy. It is trying to entice health bureaucrats to move from episode-of-care payment systems to capitation-based models so that it can focus on keeping its patient-members well and out of hospital, rather than intervening only at their points of ill-health.

The emerging new paradigm in human services is being built around these grass-roots innovations. It shifts the focus away from standardized supply-side delivery to demand-side personalization for consumers/users and their relationships. It involves a consumer-directed flow of resources held on their behalf by a budget-holder of their choice. The focus for participation, innovation and decision-making shifts from the service provider to the end-user or consumer, their relationships and their community.

All of these innovations strengthen social capital and social relationships in ways that the old paradigm can not. Family participants in Person by Person assume mutual responsibility for growing their capacity to support their disabled members rather than live as passive clients of providers and bureaucrats. The community capacity of Aurukun has been transformed in a way that an external program could never achieve. A charter school in Noosa has allowed a new configuration of social relationships to emerge which is growing social capital inside and outside the school. Socially connected people live healthier lives, but South Kingsville Co-op remains one of the few health institutions in the country that is structured as if it actually believes this to be true.

One of the pre-conditions for capacity building and the generation of social capital is the creation of civil space in which communities can allow relationships to form and follow complex paths of mutuality and shared responsibility. These four innovations have created this space and then used it to build relationships and social capital. The building of relationships is not, and can never be, a function of government.

The most important thing governments can do in social policy is to create space of this sort. This will mean a joining of the discussion about social capital to social policy reform in ways that have scarcely begun in the public arena or in government departments. Education, health and welfare reform should be directed in ways that build social capital, and that means breaking up ‘top down’ bureaucratic structures, empowering consumers and communities, and devolving power and responsibility.

The old service delivery paradigm is one of the key obstacles to civic engagement, capacity building and social capital regeneration. We will need to find the courage to sweep it away if we are serious about these objectives.


1.W.K. Hancock , Australia (Brisbane, Jacaranda Press, 1930. Reprinted 1961), p.57.

2. Ibid., p.55.

3. Ibid., p.235.

4. Ibid., pp.237/8.

Vern Hughes is Executive Director of Social Enterprise Partnerships and a member of the National Roundtable on Not For Profit Organisations.

Vern Hughes
Executive Director
Social Enterprise Partnerships
2 Elm St

North Melbourne Vic 3051
Phone - 03 9326 4481
Fax - 03 9326 8030
Mobile - 0425 722 890
Email - vern@partnerships.org.au