Our understanding of the links between social networks and the causes or solutions to poverty have been enhanced through theoretical and empirical research on the concept of social capital. In this paper we discuss how social networks and social capital have commonly been presented as a problem or a panacea in policy regarding neighbourhoods and worklessness and then contrast this with recent evidence. We conclude that policy misrecognises the links between poverty and social networks and social capital and through cuts in public services in the UK, is currently undermining social capital and social networks.