There is a problem with saying "oh, folk is struggling along OK, it'll all be all right, let's be laid back". Which is that once some funding goes to jazz, or samba, or whatever,an imbalance in earnings happens, between the subsidised jazzer, and the unsubsidised folkie. Or say they start funding folk a bit: once a few folkies have their snouts in the trough, you create a caste system, where Tom gets the door money plus a fat bag of government money, but poor old Dick and Harry only get the door money. And this imbalance can create a kind of unpleasantly competitive and rancourous atmosphere.
    A lot of good can come from funding, but also a lot of harm. A big part of the harm is the obvious "unfairness" that I have just referred to: "unfair" in the sense that funding quite obviously does not correlate very closely with quality of work. The Arts Council, naturally, claims to monitor things and assess them or whatever: but if that were really the case, would they have approved a grant to a Mr Juan Kerr, as they did on one memorable ocasion?
    I find the main problem is not this unfairness, actually, but the impermanence of official policies and personnel (I am not referring here only to Arts Council people, but also local authority arts coordinators and all similar posts). Folk music matures and changes slowly, and is deeprooted. A typical folk developer may have have been creating organic musical structures in a region for ten, twenty, thirty or forty years. But the employed official who assesses applications from this folkie will typically have moved into the area a couple of years before, and will be moving on to a new job in another couple. And of course, when the official moved in, he or she will have brought with them their own complex web of connections with sisters, cousins, aunts, ex-partners, ex-colleagues etc etc. Who, for such is the way of the world, may well move in themselves and, surprise surprise, pick up a few plums out of the pie.
    This is of course not a problem specific to folk music. But I think folk is more susceptible to it than other art forms, due to the combination of the funding officers' unfamiliarity with the scene, and the slow growth of something genuinely folk (as compared to various quick-hit "community" projects which have more superficial short-term bangs per buck).
    This is not a problem with an obvious solution. It is inbuilt due to the career structure and training methods in the world of arts administration. Budding folk musicians might be better advised to busk: it is at least honest.