OK, I'll stick my head above the parapet. I'm a metman and have been for just over 20 years. I'm not in the front line operational departments anymore so can't really comment on forecast accuracy. However I can comment on and the changes I've seen and experienced in my time. When I joined as an observer in the good old days the Met Office was fully public funded and access to forecasts and products was free to all.
Then in 1996 the Met became a trading fund at the insistence of the government and as such had to show an operating profit to it's owners, the MOD. In the years since there has been constant and not insignificant pressure to reduce costs to remain competitive. It's the same in all industry of course and the Met is no different. These pressures have led to station closures, reorganisations and rationalisations across the organisation. Some of these changes were for the better but some were not (in my opinion). I believe that the loss of the local metman to the aviation or marine community has been detrimental to the office in terms of reputation. However, that being said, SOMEONE has to pay for the infrastructure and times are hard so something has to give. Unfortunately our customers are always looking at ways to reduce costs and our competitors can sometimes seem an attractive option. I think though that the Met Office is in a difficult position because as the UK's national weather service (and member of the World Met Organisation) it is obliged to maintain a comprehensive observations network of ground stations, bouys, radar, aircraft and satellites. This is obviously not cheap but provides vast amounts of good quality data to input into our very comprehensive models. Unfortunately under free data access rules this raw data must also be made available to our competitors who can simply input it into their models. Voila...forecasts, usually less accurate, but cheaper because they have less overheads.
there you have it..in a nutshell the economics of the trading fund Met Office.