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"Overall, how happy did you feel yesterday?" that that is one of four new questions being inserted into the Office for National Statistics (ONS) Household Survey as the UK's official number crunchers try to assess the well-being of the nation.

The purpose of this exercise is not to get Britain thinking happy thoughts as the axe falls: the determination to measure well-being pre-dates both the coalition and the age of austerity. The real point is to find a better way of measuring social progress than simply how much stuff we have got. There is .

The problem is exemplified by this graph comparing our wealth with our stated level of life satisfaction. Basically, we have got a whole lot richer but no happier. Arguably, we have become more miserable.

Once we have agreed on a good way of measuring well-being, the idea is that we can then use it to shape our public policy. this week suggests that governments will need "detailed measurement of well-being to show the costs and benefits of different allocation decisions".

The research imagines how well-being data might be used "for the ranking of options across very different policy domains" and "could be used to decide which forms of spending will lead to the largest increases" in the nation's happiness (they prefer the term subjective well-being - or SWB in the jargon).

Some research has already been done on how using well-being rather than wealth might change policy decisions. Last week the think tank which included a few thoughts on exactly this.

Unemployment, particularly in men, has been shown to be very bad for well-being. The NEF analysis suggests that its impact is so great that maximising happiness means that "minimising unemployment should be made even more of a priority than it already is".

Some new areas for policy-makers emerge from happiness research. A number of studies have shown strong correlations between well-being and getting enough good quality sleep. The NEF research suggests that sleep "could be given attention if promoting high well-being were treated as the ultimate goal of policy".

"While sleep quality seems a textbook case of a problem that can only be addressed in the private realm, former Harvard President Derek Bok has argued that the subjective well-being evidence means that it should to be treated as a policy priority. He suggests actions to address it across the spheres of public education, medical training, and research funding. Other research suggests that actions to address noise pollution and promoting the sleep-related benefits of exercise (e.g. through public health campaigns) would also result in improvements."

Work and sleep then - two areas that might benefit from a focus on well-being. But NEF come up with another - bicycles. Before we get into the saddle on that, let us consider one of the strongest correlations between activity and happiness - commuting.

This graph, reproduced in , sums up the research. The longer they commute, the more unhappy people are.

The NEF report takes this idea a bit further and suggests we should introduce policies to get us out of the car and onto the bike.

"A wealth of literature from researchers studying stress and related effects reveals 'persistent and significant costs associated with a long commute through heavy traffic'. By contrast, studies comparing the experiences of commuting by bicycle and car report that cyclists find their mode of transport at least as flexible and convenient as those who use cars, with lower stress and greater feelings of freedom, relaxation and excitement."

A couple more graphs cited in the Young Foundation report hint at other areas where a well-being agenda might shape policy.

That last graph is, perhaps, an advert for the Big Society while the previous one on inequality suggests progressive taxation is good for happiness.

As the Young Foundation put it: "Well-being is not strongly associated with high pay in itself, although it is linked to earning more than people around you, an effect that decays over time. Increasing tax likewise can be seen as a transfer of well-being. Shifting disposable income from the well off to the less well off, should equate to a small loss of well-being from the wealthy and a big gain in well-being by those on lower income."

One man's happiness is another man's tax demand.

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The government rhetoric around the council cuts in England includes a traditional and repeated storyline: that dinosaur Labour authorities are putting party politics before people, making unnecessary cuts to front-line services before they have exhausted in-house efficiencies.

Only the other day the prime minister singled out one authority for special criticism at prime minister's questions. "Let me take the case of one council - Liverpool council. The cuts to Liverpool council will mean that, by 2013, they will go back to the level of grant they got in 2009", he said. "So what we are seeing is politically-motivated moves by Labour councils."

One of the most deprived cities in Europe, facing some of the deepest cuts in Britain is accused of not having, in the government's phrase, a "can-do council". When I asked for evidence of what they meant, the Communities Secretary Eric Pickles' officials sent me "some general facts and figures about Liverpool that you might find useful".

They pointed out that the chief executive "has taken a 3% pay cut but that still brings him in at around £197k". They reminded me that even though the council is facing an 8.8% reduction in spending power next year, "they will still be getting grant funding of £795per head". And said that "there's no excuse for salami-slicing libraries and bus services before in-house efficiencies have been exhausted".

The criticism has led to fury on Merseyside where last week Labour, Lib Dem, Liberal and Green councillors put aside political differences jointly to sign a budget requiring £91m worth of savings next year.

When I met city council leader Joe Anderson, he struck me as a pragmatist not an ideologue. He pointed out that since Labour regained control of the authority last May, the authority has implemented efficiency savings worth £30m, more than any other council in the country. He has challenged the government to go through Liverpool's finances.

"We have done everything that we possibly can with the budget we were given to protect services and people should come to the city and see the books for themselves and see what we are doing and they will certainly see that from our point of view we couldn't do anything any better."

Ministers have so far declined the city's invitation to examine the books, so we asked an independent management consultant to take a look. Colm Reilly, a senior executive with the global firm PA Consultancy, advises governments on how to make efficiency savings. When he scrutinised Liverpool's accounts he found the city has already saved £70m in efficiencies with plans for 30 million more. It wasn't the back office that required reform, but the front line, he said.

"They are going to have to start looking at sharing the front line services that they provide across their traditional boundaries, a regional approach to providing services, ranging from fire services right the way across to street sweeping, garbage collection and even public libraries."

The suggestion is that Liverpool's civic pride and political purpose has prevented it embracing ideas which might blur the city's municipal identity I have spoken to one official who claims that some council executives are lukewarm about shared procurement and service provision, reluctant to give up autonomy. Another source told me the authority, still the city's largest employer, will not want to lose control over jobs and services. But Mr Anderson says he is open to any ideas that will improve efficiency.

"Liverpool is progressive in its attitude in terms of changing and we will do that, but what I say to government is that we need time to do that. It cannot happen overnight and if you want it to happen overnight then people will suffer."

There is a hint in the government's criticism of Liverpool that this is a city still echoing to the battle cries of Militant Labour in the 1980s when the council fought Margaret Thatcher's cuts to local finances, setting an illegal budget. But Mr Reilly says that's "not borne out by the evidence of the documents and the plans that are laid out".

He noted how the council has strong links with the private sector including a joint venture with BT to provide many council services. Liverpool is an active member of a group of Merseyside councils looking to share procurement and service provision.

"Liverpool has saved significant monies in the back office in the last three years and they have increased that level to this year. What we see here is a city council that cannot actually make the scale of savings that they have to make without getting into the front line services and somehow reconfiguring those or somehow changing the way they are delivered."

There is an argument that Liverpool could perhaps have prepared the ground better for inevitable cuts. Greater Manchester councils, the rivals up-river and canal, have moved more quickly to sharing purchasing and service systems. But Liverpool insists it is on the same track and the problem is not ideology or a lack of can-do. Efficiency measures take time, they argue. The cuts start to bite within weeks.

PS In response to some of your comments the basic salary of Liverpool's previous chief executive Colin Hilton was £229,555. He was eligible for a performance related bonus on top with a total remuneration for the year up to last April calculated at £278,714. The new chief executive, appointed in the summer, receives a salary of up to £197,000 with no opportunity for bonuses.

At the time of the new chief executive's appointment, the council said:

"We are the first council in the country to cut the pay of its top 40 staff by up to 15%. We have also saved a further £1m by axing 12 senior posts. The new chief executive will be paid £35,000 less than the previous one, but this is one of the biggest and toughest jobs in local government - in charge of a budget in excess of £1bn - and we want the best candidate for the job."

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When Professor Julian Le Grand walked through the door of Number 10 as Tony Blair's policy advisor on public service reform in 2003, the chatter was about how the London School of Economics academic wanted .

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Instead of state-run bureaucracies deciding what was best, he argued that in schools and hospitals, parents and patients should be in the driving seat.

Wind the clock forward to the present day and David Cameron is about "giving people more control" and signalling "the decisive end of the old-fashioned, top-down, take-what-you're-given model of public services".

There is a difference though. While Tony Blair now regrets that his plans for reform of public services did not go further and faster, Mr Cameron is pressing ahead with radical change to the way we are governed at break-neck speed.

Perhaps people haven't woken up to the implications yet, but his ideas might, for one thing, herald the end of the NHS as we know it - currently said to be the world's third largest employer after the Chinese Red Army and the Indian State Railway. The plan is for great chunks of the health service to be provided by non-state providers: private firms, social enterprises, charities, mutuals and co-operatives. It has already begun.
In Surrey, for example, many nursing and therapy services are no longer provided by NHS employees, but by the 770 co-owners of a not-for-profit social enterprise - .

District nurses, health visitors, physiotherapists, dieticians, podiatrists, school nurses and many other health personnel have moved out of the state-run service and are now responsible for delivering care and shaping their company's future.

They run community hospitals in Cobham, Dorking, Leatherhead and other Surrey towns - many of their patients probably have no idea that they are guinea-pigs in David Cameron's Big Society.

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For Dorking read Anytown. The ideas being pioneered in Surrey are expected to be the norm for the NHS and public services more generally. With the exception of areas like justice and national security, everything is up for grabs. David Cameron writes today that there should a "new presumption that services should be delivered at the lowest possible level" and "should be open to a range or providers competing to offer a better service".

As one of the architects of the so-called "post-bureaucratic age", Oliver Letwin argued to the Public Administration Select Committee recently: "I think the whole history of the world, which is quite a large, rich evidence base, suggests that very highly structured command economies and very highly micromanaged societies have fared very badly, have not done well for their citizens and not lasted terribly wrong."

It is a good joke, but the ambition poses some serious questions. Moving from a top-down to bottom-up system of delivery and accountability will not be simple and there must be concerns that some vulnerable service users will suffer as the revolution takes place. (I discussed some of these ideas in a previous post.)

For the public sector unions, the fragmenting of service delivery undermines their strength. Unite recently complained that the reforms were "a recipe for dismantling the welfare state" and risked "opening up an Aladdin's cave for profiteering private companies to take over public services".

For lobby groups, the grass-roots model undermines their influence and traditional routes to power in Westminster and Whitehall. The British Medical Association recently argued that it was not aware of any evidence that significant numbers of NHS staff wanted to work in social enterprises.

For public sector workers, the turmoil and uncertainty of the changes undermines confidence. Many fear that the terms and conditions of their employment will erode over time and that the ethos of public service will be damaged.

Mr Cameron, though, is determined to "dismantle Big Government" and says it "is not about destabilising the public services people rely on". His greatest fear is not of reforming too fast but of reforming too slowly.

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David Cameron's chief policy adviser Steve Hilton has been told to stop doing deep thinky stuff for the moment and come back to rescue the PM's vision of a Big Society. No 10 has decided they need to "get a grip" or risk seeing the idea vanish in a puff of cynical smoke.

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Next week Mr Cameron will attempt to breathe new life into an initiative which, he believes, is often misunderstood and unfairly mocked.

Expect an article in one of the Sunday papers, attributed to Mr Cameron himself, explaining how there is no contradiction between the dream of a Big Society and the reality of big cuts to the voluntary sector.

Expect a speech on Monday with the PM reaffirming his commitment to replacing Britain's "broken society" with a "Big Society".

Expect a series of announcements about extra cash for charities, more places in the National Citizen Service and new details on the creation of the Big Society Bank.

Downing Street is keen to stress that there are three key strands to the Big Society:

1) Encouraging social and voluntary action
2) Decentralising power
3) Reforming public services

The first of those, (often regarded as the definition of the Big Society), is the least critical, officials would argue. Yes, charities and volunteering are part of the vision, but more important is the way in which the centralised state withdraws to allow individuals and communities to take control and responsibility.

This still leaves them with a question of timing - what former Tony Blair speech-writer "the Eric Morecambe Problem" - all the right notes, not necessarily in the right order.

Local councils are making cuts to voluntary groups now, but the valuable new contracts charities are expecting to win to provide public services won't be signed until later. No 10 claims that the tens of billions in delivery deals with charitable organisations will eventually dwarf anything the sector loses in council cuts, but the extra income will arrive after the cuts have bitten.

It is the decentralising of power, though, that is the real problem for the Big Society evangelists. Local authorities are being given greater say in deciding what they spend their money on and, of course, what they cut. For Westminster to start bossing them around over the budgets for voluntary groups is at odds with the "localism" bit of the coalition agreement.

As Phil Collins puts it in his fictional memo from the PM to his strategy team: "Everyone assumes it's the cuts that are damaging us. But, actually, letting local authorities do what they want with the money is hurting us just as much." There is increasing evidence that councils are choosing to slash grants to charities rather than hit frontline services. "We have to get off this hook", Mr Collins suggests the PM should say. "We need some money in the Budget and a rethink on the pace of localism."

Mr Collins, himself a former No 10 strategist, wonders if Mr Cameron should "mandate" local authorities to "buy from the voluntary sector".

That won't happen. Instead, the PM will stress the importance of the £110m Transition Fund, a (relatively modest) pot of extra cash from the National Lottery to help charities survive cuts to their funding He will promote the Big Society Bank, which could have as much as £300m to invest in social projects from the summer.

But, essentially, Mr Cameron will do what he can to try to spike the argument that the Big Society is simply about telling people they must provide services for nothing that the state used to provide for free.

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, an interesting conversation with a ministerial source reveals something of the political thinking behind the settlement.

I was trying to understand how the government could regard it as fair that every voter in Labour-controlled Hackney should lose £210.19 in "spending power" as a result of the cuts (8.8% reduction), while their equivalent in Conservative-controlled East Dorset is losing £2.86 (roughly 2%).

The upshot of this settlement is that the council in one of the most deprived neighbourhoods in the country is making £44m worth of cuts in the coming year, while the district council in one of the least deprived is making no cuts at all.

My ministerial source explained that, during the Labour years, extra grants were given to poor areas - money, he said, "they were not due". His point was that the Formula Grant councils receive from central taxation already includes additional funds taking account of the level of deprivation in an area. The new settlement, he explained, was simply "unwinding that process".

This argument about the fairness of the local government funding cuts is one which Eric Pickles, the secretary of state for communities and local government is happy to debate. He argues that there is far more scope for savings in authorities that have been receiving more money.

However, the effect of the settlement is that poor neighbourhoods are taking a bigger hit than rich ones.

Research by interest group using Mr Pickles' own figures, shows how, generally, the more deprived an area, the bigger the proportionate cut in its budget.

So, while urban areas with high levels of poverty, unemployment and health pressures are losing almost 9% of their spending power as a result of the cuts, less deprived districts such as Wokingham in Berkshire are losing less than 1%. Mr Pickles, however, argues that this is because poorer areas have been receiving far more money from central government and therefore have more scope for efficiency savings.

In East Dorset, for example, roughly 75% of council income is from local taxes with just 25% from general taxation. In Hackney, it is pretty much the other way around. The consequence is that, even after the cuts, East Dorset voters will each have about £900 spent on them while in Hackney it is over £2,000.

The leader of East Dorset District Council, Conservative councillor Spencer Flower uses such figures to argue the fairness point in reverse.

"How fair is that then? How fair has it been in the past that that weight of government funding has not been in Dorset, it has been elsewhere. We have had to live by our own means."

The elected mayor of Hackney, Labour's Jules Pipe, takes a different view.

"Hackney gets more because it has a greater need. We have got higher unemployment, more children on free school meals, greater number of people with chronic health conditions. It is unfair that we are seeing bigger cuts than affluent areas."

"Fairness" is in the eye of the beholder.

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A controversial sacking, mutiny, resignations, appointments, threats of another mutiny and now a Christian doctor forced out for having "embarrassing" views: welcome to the strange world of government drugs advice.

As revealed on this blog last month, the appointment of Dr Hans-Christian Raabe to the Advisory Council on Misuse of Drugs (ACMD) caused at least one member of the committee to threaten resignation. It wasn't the doctor's ideas about drugs which upset his council colleague ("just say no", if you are interested), but his views on homosexuality.

Dr Raabe is a leading light in the Manchester-based Maranatha Community, dedicated to "re-establishing Christian values in society". As such, he regards homosexuality as sinful and co-wrote a paper in 2005 which claimed that there are a "disproportionately greater number of homosexuals among paedophiles".

I understand that his anti-gay views led a number of other ACMD members to question the suitability of Dr Raabe for the council and today the Home Office put out a statement saying his "appointment to the ACMD has been revoked and we will be starting a recruitment campaign for a replacement GP shortly."

When I pressed the Home Office on exactly why Dr Raabe had been dismissed they sent me a follow-up statement saying that his "failure to disclose a report which he co-authored which links homosexuality to paedophilia raises concerns over his credibility to provide balanced advice on drug misuse issues and impacts on the smooth-running of the ACMD."

Well, I can see the truth of the second part of the explanation. It would hardly help the "smooth-running" of the council if it was hit by yet another round of resignations and bitterness. Nor would it do much for confidence in the Home Office's grip on drugs policy.

But it is the first part that is really interesting. Was it his "failure to disclose" the existence of a six-year-old document on a subject unconnected with drugs policy that "raises concerns"? Or was the quality of the science in the document itself so questionable as to damage his "credibility" as an expert adviser? Or is the key word here "balanced" - that his Christian views on homosexuality are too extreme for the Home Office?

many of the same questions that I wanted answered.

"He is said by unnamed sources to have been specifically asked to disclose anything about his past which might cause embarrassment to the government or the committee. I am interested as to what the official definition of 'embarrassment' is, or whether Dr Raabe could reasonably have been expected to view (his 2005 paper) as potentially embarrassing to the Home Office or the Advisory Committee."

You cannot simply sack somebody appointed to a government advisory body because he/she has strong religious views that are irrelevant to the job in hand. That would seem to be discriminatory.

Support for this view comes from a surprising quarter - the former Lib Dem MP, Dr Evan Harris. Now director of the Campaign for Evidence Based Policy, he says: "No advisor should be dismissed purely for holding and expressing entirely lawful views on another subject, no matter how objectionable."

making a similar point.

"I have been discriminated against because of my opinions and beliefs which are in keeping with the teaching of the major Churches. This sets a dangerous precedent: Are we saying that being a Christian is now a bar to public office?"

to revoke the appointment - he just did it for the wrong reasons.

"When it comes to drugs Dr Raabe has no expertise, no research background and no relevant specialist experience and worse still has an ideological position on drug policy that he has declared his intention to force through the Council. That's why he wasn't fit to be an expert adviser, not because of his wrong and offensive views on homosexuality."

The Home Office statement says nothing about Dr Raabe's lack of relevant experience and he says officials never questioned his "knowledge and expertise" when they dismissed him. I suspect ministers were pleased to have someone on the committee who was prepared to challenge the harm-reduction policies of the previous government as "futile" and "discredited". All eyes are now on whom they find to replace him.

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An of eight European and North American countries finds that the British are easily the most hostile on the question of immigration and immigrants - even though five of the nations polled have a greater proportion of foreigners in their population.

According to the research commissioned by US and European think-tanks, people in the UK are much more likely to say there are "too many" immigrants than comparable nations. In Britain the figure is 59% compared to 27% in Germany and the Netherlands - both countries with a higher level of foreign-born residents.

British respondents to the survey by are the most likely to say that immigrants, both legal and illegal, are a burden on social services. Two-thirds of Britons see immigration as "more of a problem than an opportunity" compared to around 50% in the US and mainland Europe.

Around a quarter of Brits don't think any migrant should be allowed to access the NHS (25%) or state schools (22%), even if they are here legally. In other European countries with significant immigrant populations, the figure ranges from 1% to 5%.

While eight out of 10 Brits don't think anyone here illegally should have access to state schools or healthcare, the rest of Europe appears far more generous. Most people surveyed on the Continent, around 60%, think those resident illegally should still get free health treatment and around half say they should be able to receive state education.

The international survey polled a minimum of 1,000 people in each of the eight countries. Among the organisations which funded the research are the German Marshall Fund of the United States and the Barrow Cadbury Trust in the UK.

The results suggest the British are more likely than anyone else to say that immigrants take jobs from native-born workers - 58% of us agree with that compared to an average of just 35% in the rest of Europe. Similarly, 52% of Britons believe that immigrants push down wages compared to an average of 44% among other European nations.

Our relative antipathy towards migrants is surprising given that British respondents are the most likely in Europe to say that immigrants are hard workers (77%). We are also more likely than the average European to believe that immigrants help to plug labour market gaps, with nearly three quarters supporting the idea that government should allow more foreign doctors and nurses into the UK and just over half of us saying more foreign care workers should be invited here to help look after the elderly.

The British are generally more likely than other Europeans to say that second-generation immigrants are integrating well and the most likely to complain that both legal and illegal immigrants are exploited in the workplace.

There is optimism, tolerance, even sympathy in these findings which seem at odds with the negativity and hostility exhibited elsewhere in the survey.

Part of the problem, perhaps, is that our national debate about immigration encourages us to think the level is much higher than it really is. Asked to estimate the proportion of foreign-born people living in the UK, the average guess is 29.4%. The true figure according to OECD data is 10.8%, lower than Germany, Spain, the Netherlands, Canada and the USA. When informed of that, the proportion of British respondents thinking it was "too many" fell from 59% to 46% - although this is still much higher than France (16%) or Germany (20%). The average of EU nations polled is 29%.

It may be a consequence of our island-nation status: that moat around our borders encourages greater introspection. It may be a consequence of Empire: the sudden arrival of large numbers of "coloured Colonials", as they were described, in the post-war decades coincided with rapid and unsettling social change. It may be a consequence of a public and political debate about immigration which has often appeared duplicitous and dishonest.

This survey doesn't reveal a bigoted nation but rather a confused one. For 100 years, we have conducted our conversation about immigration in terms of "illegals", "bogus asylum-seekers" and "welfare scroungers" out to steal "British jobs from British workers". Since the Edict of Expulsion in 1290 which saw England's entire Jewish population deported, public debate about foreigners has always been more hysterical than objective.

And yet we are also, I think, a tolerant and broad-minded country in the main. Over centuries, we have experienced wave after wave of migrants and seen how the new arrivals have added something to our cultural tapestry. If we look back far enough, all of us will find elements of migrant stock.

None of the other countries surveyed gets close to the 23% of Britons who regard immigration as the most important issue facing the country today. The average is 10% among European nations, 9% in the US, 5% in Canada.

Why? Not because British race relations, public services or economic prospects are under any greater stress from foreign arrivals than other countries polled. Nor can it be simply population density - the Netherlands has many more people in each square mile than the UK. Rather I suspect it is because, for centuries, when we have heard the word "immigrant" we have tended to find ourselves thinking "threat".

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