The collapse of Glasgow's attempt to sign up care homes for a new deal on residential care for the elderly has left the city council's plans in disarray.

But it will affect other councils too. Glasgow's own report on the plans stated that if the rates it offered were agreed, they would quickly be replicated by other councils. But the rates were not agreed.

The council has tried to portray care home owners as deliberately disrupting the tendering process, by making excessive and unsustainable demands. But more than half of the city's existing care providers said they were unable to provide care at the current price, some demanding up to 48 per cent more.

The council was faced with a crisis, social work chief David Williams warned. It risked running out of nursing care for the city's most vulnerable older people in under six months.

Those suspicious of private provision might accept the council's view that home owners had worked together to thwart efforts to get the best value for council tax payers.

The council also says Scottish Care, which represents care home owners, has exaggerated the cost of its in-house care. Private providers are angry the council spends more on this than it is willing to pay suppliers. The council admits in-house costs more, but disputes the difference is large.

Scottish Care argues Glasgow refused to recognise the true cost of providing care to its most vulnerable citizens and the need to pay care staff fairly for the skilled work they do.

This is not a new debate: Earlier this year a Scottish Government report warned underfunding residential care could lead to firms going bust, cause difficulty in retaining quality staff and a general decrease in the level of services.

Glasgow is now asking for guidance from ministers - who asked for local commissioning of elderly care - and such guidance has been promised by the end of the year. And are cash-strapped councils trying to underfund it? The logic of a tender process is that a public body can get good value through the private and voluntary sector competing against each other to provide the best price, to get the work.

It relies on driving the price down on the basis that one firm will undercut another to gain a competitive advantage. But there were hardly any takers. If you believe in market forces at all, the very fact that mechanism has failed is a sign that Glasgow has got its offer badly wrong.