The Guardian reports on some of the problems with local authorities assessing "Big Society" offers. On the whole, it underestimates the extent of the problems, especially in today's increasingly litigious climate.
Particularly on procurement, the piece does not give the full flavour. Challenging the award of contracts has become increasingly common. This is helped by a change in practice. Previously, a successful challenge would simply lead to a rerun of the tender. Now you can claim compensation for the profits you would have made. There are plausible rumours that companies are building a few successful challenges into their business model. Of course, that tends to benefit major players who can afford smart lawyers. The more local, volunteer type groups often have little expertise in putting bids together. It is hard for officers to help them because (a) resources are stretched (b) Too much help to one group can itself breach procurement regulations.
Other problems the article does not cover include planning service provision. The availability of volunteers does not necessarily match the areas of need. Given that there are virtually bound to be hidden costs in any scheme in terms of management, all kinds of business support and so on, that is likely to lead to services being planned according to who shouts the loudest rather than on a rational basis.
The other big omission is "moral hazard". If the service is much valued, government is always likely to step in if a group fails. If you take Southern Cross, it would hardly be politically possible for the government to leave the people in Southern Cross homes to just fend for themselves. Hence the private sector could take as many risks as they liked knowing that the taxpayer would pick up the pieces.
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The history (mainly) of the voluntary sector is that it has usually responded to need. The willingness of government (local and national) to introduce the private sector has in many cases contributed to the demise of the voluntary sector as government policy dictates that the voluntary sector is somehow on a par with the private sector which it absolutely is not, having social welfare aims rather than profit making as its goal. So many allowances have been made for the 'rights' of the private sector it is not surprising that they can include as a part of their business planning the right to sue should they not be awarded contracts. The assumption that they have a right to public money to increase or assure their profits is a shocking one, but the choices of governments and local authorities has ensured this would happen. Profit making and greed often go hand in hand. The promotion of the myth that somehow the private sector is always superior has allowed greed to flourish with govt blessing. The proliferation of private companies and consultants doing what a good public service ought to be doing and the creaming off of public monies is truly despicable but local authorities have often created this monster.
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