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CYOA
Howard
I think you know the answer.
I'd tell them what I could do for £8k whilst making sure everyone was paid properly - and they can take it or leave it. I'd also write some pretty exacting, punishing terms in the associated contract or statement of work - it sounds like they are disorganised and it's screwing you.
If they flounce you then get the fun job* of finding new business, and they get the horrible job of finding new suppliers.
* kinda