I and most people agree that's it's possibly too high, but it's ignorant to treat it like a scam.
The fact that it is so high is a scam.
It really depends on the grant. For the larger grants, it may work somewhat like you describe. For the smaller grants, they literally do just take 60% of the money (and complain that it is not enough to administer the grant while providing absolutely no support whatsoever). In theory, it's paying for salary and office space and whatnot, but those are already covered by other budgets.
Naively as an outsider, this situation seems like everything worked as intended?
I don't remember all of the rules off the top of my head, but if you are ever landing with less than 30 minutes of fuel, something has gone seriously wrong. You are required to take off with sufficient fuel to fly to your destination, hold for a period of time, attempt a landing, fly to your alternate, and land all with 30 minutes remaining. If you are ever in a situation where you may not meet these conditions, you are required to divert immediately. In choosing your alternate, you consider weather conditions along with many other factors. This was, without question, a serious emergency.
From the very brief description in the article, I would say they should have diverted to Manchester at least 25 minutes sooner than they did. I will include the GP's caution, however:
I'd be very wary to get ahead of the investigation and make speculative statements on how this could have happened, the one thing that I know for sure is that it shouldn't have happened, no matter what.