Balsall Heath, Birmingham, getting prostitutes off its streets, seemed a perfect experiment in communitarianism. Nick Cohenfinds a less inspiring truth

At the beginning of the Nineties, few groups were more marginal than the intellectuals of Demos and the poor of south-central Birmingham. Demos was founded in 1993 to bring together in a think-tank ex-communists and Trotskyists who had dropped their socialism, so that they might applaud the political and economic dynamism of a modern world which had been getting on quite happily without them. The residents of Balsall Heath - Pakistani, Irish and English - had, if anything, been treated with greater indifference. Their schools and public services varied from the mediocre to the appalling. Their council estates and rundown Victorian terraces were infested with prostitutes and pimps. Soiled needles and condoms piled up in gardens and stairwells. Women were harassed by kerb-crawlers and everyone who wasn't selling bodies or drugs had had more than enough of police and city council indifference.

Balsall Heath and the new cheerleaders of modernity were united in the person of Dick Atkinson, a sociologist at Birmingham University who has worked in the city's slums for 30 years. Atkinson provided Demos with one of its earliest pamphlets - The Common Sense of Community - a communitarian tract published in 1995 that rationalised the worries and initiatives of his neighbours. A kind of theory struggled from his musings, which inspired, or at least justified, the emerging postures of the old Conservatives and "new" Labour.

At the turn of the century, everyone should be happy. Geoff Mulgan, the founder of Demos, now advises Tony Blair. Charles Leadbeater, Mulgan's colleague, is praised by the Prime Minister, Peter Mandelson and Chris Patten as the brilliant interpreter of a weightless, wired future in which citizens must groove and network under the bright dome of bubble.com. The Demos crowd, in short, has made it, and so has Atkinson. Soon, he will host a conference in Birmingham, "Urban Renaissance", at which delegates will be instructed to learn from the Balsall Heath example. The rather grandiose title isn't complete bluster. The tarts have been driven from the streets by the vigilantes he encouraged - and crime has fallen as a result. Ideas he helped promulgate - zero tolerance and the fostering of self-reliant schools freed from bureaucrats - are now so commonplace that they barely raise an eyebrow.

And yet Birmingham isn't sharing their happiness. While Atkinson was preaching the joys of self-help, the global market that Demos drools over showed its enormous disdain for elected governments. BMW did not condescend to warn ministers that it was about to provoke a regional crisis by hacking Longbridge to pieces. As the city faces disaster, it is fair to ask whether the new communitarian politics have helped Birmingham cope or got in the way.

Before I go further, I should say that Atkinson is an energetic and in many ways admirable man. When he began work in Balsall Heath 30 years ago, he tells me, there was one voluntary agency. There are now 70 busying themselves in what he calls, somewhat euphemistically, "Balsall Heath village". The community projects that he has been involved with for years provide many who turn to them with encouragement and advice. Roy Hattersley, who was the MP for nearby Birmingham Sparkbrook, remembers Atkinson with affection as a campaigner whose scraps with a Morrisonian council inspired a dispirited neighbourhood. At one point, he was so angry with the assumption of Sir Dick Knowles, the "old" Labour leader, that city hall knew best and there was really no point trying to beat it, he threatened to run against him.

Atkinson, in short, was a Sixties activist. He believed that small was beautiful; that parents and teachers should take on for themselves the task of ensuring that the deprived young weren't neglected by time-serving managers; that direct democracy was superior to ossified parliaments and council chambers. It sounded like familiar radicalism. Yet Atkinson was distinctive. Most of the class of 1968 who didn't end up reliving their parents' lives fought big business or at least eyed it with suspicion. He attracted benign attention because he insisted that the corporation was a splendid paradigm for the good society.

The Common Sense of Community begins with a reverent bowing of the head to Charles Handy, Demos patron, Thought for the Day radio-preacher and giddiest of business school theorists. Atkinson wrote that councils and charities should follow Handy's management consultancy diktats. Just like go-ahead companies, they must "employ fewer but educated, skilled, self-motivating people", who would ignore "the cumbersome rules and regulations" and "foster, self-reliance and autonomy". In the early Nineties, self-reliance was being fostered by the sacking of hundreds of thousands of workers - mass dismissals that made a bad situation in Balsall Heath worse by expanding the pool of unemployed labour and prostitutes. Atkinson didn't notice. The delayered, downsizing business was "the ideal" that must guide public policy-makers. To believe anything else was to be a living fossil tied "to the old model".

The most striking manifestation of autonomy was the direct action against prostitutes. I lived on the edge of Balsall Heath, and it was undoubtedly true that women friends were fed up with being pestered by dirty old men - and reporters. Streetwatch, as the predominantly Muslim campaigners against vice called themselves, was a media darling. Tantalising pictures of prostitutes emerging from the darkness could be contrasted with shots of stern Islamic campaigners with impressive beards. The residents organised pickets, disrupted the sex business and noted down the numberplates of crawlers. Their perseverance was impressive. Atkinson, the secretary of Streetwatch, estimated he had 500 supporters he could call out if the pimps gave him trouble. The protesters confronted clients every night, in all weathers, year after year, until roads that were once jammed with slow-moving cars emptied.

No one who knew what Balsall Heath was like can crush all feelings of sympathy for the vigilantes. But there was a touch of the reactionary voyeur about the ecstatic journalists who came from Fleet Street to praise, in the words of Melanie Phillips, a community which was fighting "those who believe that all values are relative and no one should judge anyone else". Most didn't want to know about the messier side of communitarianism. Legal Action for Women and the English Collective of Prostitutes listened to the victims. A woman's home was firebombed on one occasion, and had bricks, crossbow darts and fireworks arrive through her letterbox and windows at other times. Notes delivered to real or suspected prostitutes gave a flavour of a menacing atmosphere in which anonymous denunciation was encouraged:

"Hello bitch, so you think your clever running a brothell. Well lets see what we can stop you! Now we could smash the windows We could smash your face. Best of all we could burn you out, it only takes one match and a spot off parafin." Or: "The fat cow at no 10 says your a fancy bitch. If was you I would sell up quickly."

Nearly all did.

The police never linked any of the assaults or poison-pen letters to Atkinson's supporters. Streetwatch said it was a non-violent organisation, which would expel the perpetrators of crime. In a sense, it didn't matter who was responsible. Zero tolerance encouraged hounding and worse. As the Woman's Legal Centre is the first to point out, prostitutes face enough threats in quiet times. As I write, a man accused of murdering two Balsall Heath girls is on trial.

The hard-headed might argue that you cannot stop violent pimps unless you are prepared to get a little rough yourself. But the pimps have not been stopped. Predictably, they have moved to neighbouring Edgbaston, which has become so popular with kerb crawlers its MP is demanding emergency legislation. A practical alternative would be legal, inspected brothels away from homes, but that would be unthinkably relativist.

Given the failure of "self-reliance" to dissolve the oldest profession, and the challenge to the rule of law, you might have expected politicians to tread with great care. But Jack Straw regarded the night patrols as justification for the populist hard line on crime he hopes will sustain a remarkably conservative new Labour elite in power. Atkinson was proud to write in his community newsletter, The Balsall Heathan, that Straw had shaken hands with the chairman of Streetwatch, and told him he set "a good example to all of how a community can take pride in itself".

Demos went further and suggested that public humiliation and street justice would be a tonic for a tired legal system. "A radical and, to some, disquieting suggestion would be to return to some latterday form of stocks for burglars," Leadbeater proclaimed in 1996. "The shame it would generate would make it a powerful form of punishment."

My time in Balsall Heath was spent working for the Birmingham Post and Mail and I would often cover the glaring inadequacies of the city council. The micro, self-reliant and self-helping project seemed, and often was, preferable. Even the tart-baiters were motivated by an understandable anger.

Yet, as Longbridge goes under and politicians are required to devise and implement a huge regional regeneration strategy, big government can suddenly look beautiful. Where can it be found? The West Midlands County Council was abolished by Thatcher, and the neglected English provinces have yet to receive devolved administrations. Birmingham City Council is the largest municipality in the country. But its strength has been sapped by decades of centralisation and confidence undermined by the espousal of the pseudo- democracy of management consultants. The Atkinson/Demos line has triumphed in education, which was once local authorities' chief responsibility. Schools have been freed from "cumbersome" council bureaucracies and presented to parents. They are meant not to notice that real power has passed to a Napoleonic David Blunkett in Whitehall, who can decide what all children must learn because no one is strong enough to stop him. In London, both major parties are keen to boss many people about, but they buy the Demos line that we are living on thin air in a new economy that cannot be bucked.

The luckless citizens of Balsall Heath can take a small comfort. For a while they played their part. They gave a rough blessing to politicians and opinion-formers anxious for populist themes to hum. Their new friends don't know what to do when the beloved global market takes away tens of thousands of jobs. Perhaps Atkinson should seize the only remaining option and send a patrol out to find replacements.

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