Social capital has become an increasingly popular concept within some academic and government circles as a means of exploring how communities can embark upon a process of civic renewal by establishing bridges of reciprocity between community members from diverse social and cultural backgrounds. In this article we place the popularity of social capital within the historical context of the ‘hollowing out of the welfare state’. This allows us to highlight four interrelated problems that hollowing out processes pose for the establishment of social capital in the UK today.