With COMPETITIVE prizes, if entrepreneurs fail, taxpayers pay NADA.
The fiscal woes that you mention are to be expected with such a centrally planned, statist project. In the USA, it's the taxpayers who get shafted. In the U.K. we're not yet sure who will suffer the consequence$. At least when competitive prizes are offered, taxpayers don't pay in the wake of failures. It's much like a lot of other industries where private capital's invested.
http://www.SpaceProjects.com/prizes