Has this got anything to do with the cuts?

Yes.  The consortium is a strategic response to the government’s deficit reduction campaign.  Due to having less money at their disposal, there will be increasing pressure on commissioners like the local authority to make savings.  One obvious way of doing this is to reduce down their ‘transaction costs’ associated with having to manage lots of small scale contracts by aggregating or bundling those contracts.  The consortium represents a strategic mechanism on the supply side of the market to act as the receptacle for the resultant large scale contracts/funding agreements (via whatever method - pipelining, negotiated commissioning or open and competitive procurement).

As well as being a ‘defensive’ mechanism the consortium will also focus on new market opportunities as public services get increasingly transferred to the voluntary sector in the future.