From the start of his time as prime minister, David Cameron has made it clear that he understands there is more to life than money. Back in November 2010, in a speech on wellbeing, he said that success as a country is about more than economic growth.

With the spending review coming up on 25 November to set out public budgets for the next four years, what would now happen if Cameron told his chancellor, George Osborne, to allocate the money in the spending review in keeping with this sentiment? We will assume that he would want to stick to the deficit reduction plan; let us also assume that existing ringfenced spending – health, overseas aid, schools, the science budget and now the commitment to spend 2% of GDP on defence – stays in place. So what would be different in a spending review that focused on quality of life?

Education

Our children are lagging behind on wellbeing (ranked at 14 out 15 selected countries for life satisfaction according to the recent Good Childhood report). Academic achievement is clearly important but our education system should also be promoting well-rounded, resilient and civic-minded children – prepared for life as citizens and employees. In recognition, the long-established Pisa statistics on attainment are now going to be extended to incorporate wellbeing measures.

We should do the same for all our children by measuring child wellbeing and publishing the results for each school. This would give parents the information to help them choose the best schools for their children and incentivise schools to put wellbeing at the top of their agenda. We know that increasing wellbeing in children improves exam results, future wellbeing and future earnings so we can reassure the Treasury that this will enhance future GDP and tax receipts. The education secretary, Nicky Morgan, is warming to this agenda and also supports measures to improve mental wellbeing in children, so let’s hope she is a big winner in the spending review.

Health

In his speech on wellbeing in 2010, the prime minister also cited mental health as an excellent example of “a whole area that if you just look at economic growth you are missing out on a huge part of wellbeing”.

The NHS needs to make a reality of the commitment to parity between mental and physical health. To make up for past failures, we now need to treat more people with mental health conditions, building on successful programmes such as the Improved Access to Psychological Therapies. This programme also represents a model of evidence-based approaches with proper evaluation (a lesson here for Cabinet Office ministers after the Kids Company fiasco).

More broadly, the wellbeing agenda would suggest reallocating money towards prevention: we know lifestyle factors are crucial, but we only spend a tiny proportion of the health budget on influencing behaviour. We also need more cross-departmental cooperation. In particular, the Department for Communities and Local Government (DCLG) and the Department of Health should work together to support social care of elderly people so they free up hospital beds.

Crime

The Ministry of Justice and the Home Office would focus on reducing the impact of crime on wellbeing. This means giving the wellbeing of victims higher priority in the justice system by, for example, increasing access to restorative and reparative justice approaches that can benefit victims and offenders. Prison governors would be told to minimise the reoffending rates of their prisoners. Prisons on prime residential land, such as Wandsworth prison, would be sold and the proceeds used on preventing crime and building prisons, which are designed to help the inmates come out with jobs.

Employment

Unemployment is bad for wellbeing and the public finances, so the Department for Work and Pensions and the Treasury would be told to redouble their efforts to get the unemployed into jobs and apprenticeships. The current review of the tax credit system would be directed at making work pay.

On average, pensioners now have higher incomes than workers, so we should give winter fuel payments only to those eligible for pension credit, saving at least £1.2bn. We could abolish the now complex system of child benefit and compensate those with children on low incomes using universal credit. The Institute of Fiscal Studies thinks this could save £4.8bn. This money could be used to improve work incentives at the lower end of the salary scale.

Local services

We would tell the DCLG to work with community groups and local authorities to assess whether their spending is being directed efficiently to achieve maximum wellbeing.

Year-on-year changes in wellbeing by local authorities would be published, with town halls required to account for large deviations in their populations beyond national trends.

We know that the quality of relationships is crucial to wellbeing, so we would improve access to counselling and mediation services for when relationships break down, avoiding drawn-out processes through the family courts where possible.

We would promote neighbourliness, volunteering and community action, to strengthen social networks, cohesion, trust and tackle loneliness. The UN statisticians might have decided that volunteering should not be included in GDP, while illegal drug trading and prostitution should be added, but this just goes to show how illogical it is to think GDP growth measures increased quality of life.

Capital spend

The government’s capital spending programme would be reviewed to ensure we fund projects that bring the greatest gains in wellbeing. This would look, for instance, at whether HS2 enhanced wellbeing as much as using the same amount of investment to upgrade numerous other railway lines. Proper cost-wellbeing analysis would provide crucial evidence to help make tricky decisions like where to put the UK’s third runway.

The Treasury, with help from the Office for National Statistics, could add some analysis, outlining what impact they expect the spending review to have on the nation’s wellbeing so we start looking at the inequality of wellbeing as well as inequality of incomes and wealth.

Clean energy

The Department of Energy and Climate Change should be told to devote more public investment to lower the cost of storage and transmission of renewables so we demonstrate that you can have clean, secure and affordable energy.

Quality of life

A spending review along these lines would show a government with a compelling vision – to improve everyone’s quality of life. It would make a reality of the rhetoric in the prime minister’s party conference speech, and it would establish a framework for assessing progress during the course of the parliament.

Gus O’Donnell was cabinet secretary and head of the civil service from 2005-11. He is now a member of the House of Lords, chairman of Frontier economics and patron of the What Works Centre for Wellbeing

Talk to us on Twitter via @Guardianpublic and sign up for your free weekly Guardian Public Leaders newsletter with news and analysis sent direct to you every Thursday.