The article considers three groups of conditions applicable to Moscow that can promote competition for budget resources allocated by the city: the economic autonomy of the supplier; tuning up for the competition of  mechanisms providing budgetary resources; informing consumers of their rights to receive services and of the activities of the agencies providing these services. It studies one of the key problems of the socio-economic development of Moscow, i.e. improving the quality of social services.

Financial mechanisms defined by the Budget Code of the Russian Federation are closely studied as a current decision in this article. They are: financing public and municipal contracts and giving different subsidies. The analysis identified some principle shortcomings in the mechanism of financing state contracts, established by Federal law №94-FL to provide budget services. Shortcomings of the mechanism providing subsidies were also revealed. Its main, far from positive, feature is segmentation by forms and types of legal persons.   This segmentation impedes competition since each organization may expect to receive only “their” kind of subsidies and to compete   with organizations concerned.

Conclusions: It is necessary to achieve the comparability of the economic conditions of the grantees; to make amendments in the RF Budget Code; to adopt the financial regulations. It is on their basis that moving from maintaining public and municipal institutions to paying for the services provided appears possible.