The funding from UK Sport for Olympic cycles is there to elevate British prospects from also-ran to medal contention, partly to fund excellent coaching and support teams and also ensure the athletes get the time and facilities to train unencumbered by financial pressures.
Without it, the competitors need to be self-funded, which usually means people getting generous support from their families to fund many years of training without needing to work for a living. Hence a much higher barrier to entry if you don’t have rich parents.
The grass-roots stuff to nurture younger people who show interest is from separate funds entirely. I believe UK Sport’s annual income from the lottery (70%) and government (30%) is about £340m a year, much of which is spent on that stuff. The winter olympic spend was £13.5m, over 4 years.