Not so simple
"Government withdrawing funding from theoritical research which is failing to deliver on its promises, and putting the funding to applied research that has a tangible and measurable output inline with current government priorities."
If you thought any particular theoretical field was "promising" anything, you misunderstood. By definition, it's impossible for research to promise anything - you don't know whether theoretical research will even produce results that might potentially be useful until after you actually do the research. That's the whole point of doing research.
The idea that you can simplistically trade off theoretical research for applied research is dangerous because applied research builds on theory. If it weren't for theoretical research into electromagnetic radiation (lasers), we wouldn't have applied research into higher capacity optical storage media (DVDs etc). No-one could have predicted that all that theory would be as useful as it has been when Einstein set it out.
"Most academics think money is a bottomless pit and that their research should be funded above anyone elses. Mention measurement of success and deadlines and you get a confused and slightly scared look or outright acusations that you don't understand what they are trying to achieve."
I take it you've never had to apply for funding then. Academics are acutely aware of limited resources every time they have to compete with legions of their peers for research grants. Moreover, deadlines are an issue. Trust me. Money runs out.