Social Capital Index (SCI) compared with the Retail Prices Index (RPI)

"The Retail Prices Index (RPI) is the most familiar general purpose domestic measure of inflation in the United Kingdom. It is available continuously from June 1947. The Government uses it for uprating of pensions, benefits and index-linked gilts. It is commonly used in private contracts for uprating of maintenance payments and housing rents. It is also used for wage bargaining."

"The [Consumer Price Index] CPI is the main UK measure of inflation for macroeconomic purposes and forms the basis for the Government's inflation target. It is also used for international comparisons. The RPI is the most familiar domestic measure of inflation in the UK; its uses include indexation of pensions, state benefits and index-linked gilts. CPI and RPI both measure the average changes month-to-month in prices of consumer goods and services purchased in the UK, although there are differences in coverage and methodology.

The CPI contains price indices, percentage changes and weights for the Consumer Prices Index (CPI), Retail Prices Index (RPI) and the components that make up these indices. Internationally, the CPI is known as the Harmonised Index of Consumer Prices (HICP), although the two indices remain one and the same."

There is no index of 'social capital' in the UK, but worldwide the literature on the subject is growing fast as people are becoming more aware of its significance.

The ONS provides 'Measurement of social capital in the UK 2005'. This paper presents the context for social capital measurement in the UK, the approach taken and international measurement issues. Author: Penny Babb.

"The rise in popularity of ‘social capital’ as a social concept in the late 1990s coincided with a new interest in evidence-based policy in the UK – drawing on social research to inform the nature, implementation and evaluation of policies. There was also a desire in Government to address social inequalities and social exclusion – looking for ways to reduce the gap between the advantaged and disadvantaged, and meet the needs of the excluded members of UK society. This focus resulted in the development of community policies, to regenerate neighbourhoods and promote cohesive communities. The principal aim of the community policy is to:

'develop strong and active communities in which people of all races and backgrounds are valued and participate on equal terms…'

The OECD definition of social capital presented in The Well-Being of Nations describes it as:

'networks together with shared norms, values and understandings that facilitate cooperation within or among groups'

This embodies both networks and norms and so was adopted in the UK to form the basis of our data collection and analysis.

To measure social capital, we first needed to identify the key dimensions that underpin it. Five main aspects form the basis of the UK work:

• civic participation – the propensity to vote, to take action on local or national issues
• social networks and support – such as contact with friends and relatives
• social participation – involvement in groups and voluntary activities
• reciprocity and trust – which include giving and receiving favours, as well as trusting other people and institutions such as the government and the police
• views about the area – although not strictly a measure of social capital, it is required for the analysis and interpretation of the social capital measures, and includes satisfaction with living in the area, problems in the area."

The ONS seems to be going down a route that requires the completion of questionnaires even though 'proxy' measures could be used. For example from the list above:

1. 'problems in the area' could be represented by social statistics that are already available, such as truancy, ASBOs, etc..
2. 'Social networks and support' and 'reciprocity and trust' could be represented by marital status, domestic violence figures, household size etc., data that is already available.

The RPI and SCI have in common a basket of components that are weighted. The added dimension of the SCI is that it applies to each neighbourhood, like the ONS Neighbourhood Statistics and indices. As a tool for decision makers the SCI could prove very useful to local people - community and faith leaders, parish councillors, school governors, GPs, health visitors etc.. The question is, "When will politicians recognise that these local leaders are much more likely to be able to address the problems in their area than occupants of the Westminster village?"