This is nothing to do with ATC.
It is a failure of visual separation in Class G airspace, assisted by the departing aircraft (an RV) climbing enthusiastically to circuit height on a tight circuit.
ATC don't have eyes on the back of their heads, and separation of VFR traffic is not their job.
I am based at Shoreham and regard ATC there as very good, and doing their best given the dreadful flying and dreadful radio so often seen.