In current theoretical and policy debates concerning social cohesion, the neighbourhood has re-emerged as an important setting for many of the processes which supposedly shape social identity and life-chances. It is in this context of a renewal of interest in local social relations and particularly the deployment of notions of social capital that this paper offers a critical review of a wide-ranging literature. The paper explores initially and briefly the idea that societies face a new crisis of social cohesion and outlines the key dimensions of societal cohesion. The core of the paper is then devoted to an examination of where the contemporary residential neighbourhood fits into these wider debates, particularly in relation to the interaction between social cohesion and social capital. In this context, some of the key debates around the concept of social capital are outlined. In moving beyond abstraction, the paper also shows how social capital can be broken down into relevant domains for policy action at the neighbourhood level and how concepts such as social cohesion and social capital can be operationalised for research purposes.

A logistic regression model of individual neighbourhood dissatisfaction was developed using data from the 1997/98 Survey of English Housing. Housing satisfaction and the general appearance of the neighbourhood were closely associated with neighbourhood dissatisfaction, although perceptions of noise, friendliness, community spirit, schools and crime were also important. Although sociodemographic factors were much less important than residential perceptions in helping to predict dissatisfaction, the type of neighbourhood remained a signi cant independent predictor of dissatisfaction even when residents' views were taken into account. Some factors were more important in different areas: in particular, residents in less af uent areas were more sensitive to unfriendliness and crime. There were also indications that owneroccupiers were less satis ed in areas where they had a lower tenure share. The paper concludes that neighbourhood policies with a broad spectrum of goals are required, that pay careful attention to residents' own assessments of local conditions.

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