Good points. One note of caution though: I was funded by Wellcome for my D.Phil. (more proof that the vetting systems are flawed). They made a point of paying their researchers more, because they were worried that some good people were put off by the salaries. Their intention was to shame government funders into paying more, or to shift the market rates for researchers. Instead it just created a two-tier system, with the lucky few paid more, and everyone else still struggling along on a pittance. So what I’m saying is the non-government funders can’t do it on their own.
There is hope though: I worked briefly for the bit of the English Department of Health that runs the NIHR, and most of their money goes into big, long-term research centres on ten year grants. This is deliberately done to give researchers some stability. I’d like to see the money spread around a bit more widely than it is currently though. That might be more of an issue with biomedical research, which currently has little space for people who want to to do ‘small’ science (as opposed to sequencing everyone’s genome to cure all diseases). The incentives faced by universities probably don’t help, because their fight for money leads them to neglect faculty whose research doesn’t bring in megabucks (qualitative research suffers particularly from this).