Not every project is deserving of funding. Grants provide at least one filter, and at least in my experience have some correlation to merit. There's just not enough money, spreading it out doesn't help.
Attaching funding to academic politics sounds like the death of innovation, but that may be an exaggeration.
Knowing what projects "deserve" funding before they're funded is a harder problem than any funding body would like to admit. I'm not proposing all available money is divided up equally, in saying that the application should be done in an efficient way by a union of academics.
Attaching funding to academic politics sounds like the death of innovation, but that may be an exaggeration.