The BBC has the money

Clearly not, since production stopped completely when Disney+ dragged their feet and eventually neglected to renew the show. You say it yourself, they absolutely need co-funding to make the show.

I.e., they do not have the money to produce it on their own. I think Chibnall puts that quite plainly.

Didn't they just answer that? Because there's less money around and a shoestring budget doesn't work anymore in today's media landscape.

There is certainly failure to understand here, yes. You'll want to look up the concept of publicly funded media like the BBC, and how they differ from purely commercial ones.

And it's not sudden, I think in most countries public service media have suffered cutbacks over decades. Again, that is spelled out in the linked article.