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ACCA Strategic Professional · Strategic Business Leader · Public sector governance

A city council is deciding whether to close a public library to save money. Councillors consider only the direct cost saving and ignore effects on literacy, community cohesion and elderly residents. Which public sector concept is most clearly being neglected?

The council is neglecting social value and wider outcomes. Public bodies should judge decisions on the social, economic and environmental benefits to the community, not only on cost saved. Focusing solely on the direct saving ignores effects on literacy, cohesion and vulnerable residents.

  1. AValue for money measured only by economy
  2. BSocial value and wider outcomes beyond financial costCorrect
  3. CAgency cost control
  4. DCompetitive advantage

Explanation

Public sector bodies are expected to consider social, economic and environmental outcomes, not just cost. Looking only at the cash saving focuses on economy, ignoring effectiveness and wider social value. Agency cost and competitive advantage are private sector ideas and do not fit this case.

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