I think all new schools have to be free schools/academies now, so some free schools are being set up by partnerships that include LA's and other people who should know what they are doing.
I know of at least one school where the funding was approved under labour (community comprehensive on basis of obvious need for additional school places), withdrawn under coalition and then approved as long as the school is set up as a free school.
I think most free school applications come from organisations in the businesss of running schools, not local groups now? I am not sure how this differs greatly from academies under labour.
The thing that seems to be missing is appropriate checks that people proposing to run free schools know what they are doing, and in the absence of those checks, close enough supervision by the people paying the bill.