I think you're right on both counts, Jon - hence the question about paying the copyright owners direct rather than via the PRS.I have been in touch with the PRS many a time, Morticia - May as well have tried to shove butter up a hedgehogs a&*e with a hot knitting needle! You just get a 'jobsworth' reciting 'the rules' parrot fasion. They are not interested that we may have to close - just in their pound of flesh.
One thing I did spot when I was looking into various aspects of the PRS was that they do have a fund available to give money to assist new writers. I have enquired if we would be eligable for a grant for, say, a songwriting workshop or competition. Looks like it could be a goer.
I would suggest that anyone could apply for this type of funding for their folk club or festival. Just make sure the proprieter of your venue has paid the buggers first though!
Cheers
DtG