The no-advance model is certainly controversial within the industry. Most first-time writers aren't going to make a lot of money out of their book, and if you can't make enough to write full-time, the cashflow delay is not too significant. The only time you really need an advance is if it's big enough that you can afford to quit work for a while and write full-time.
However, the no advance plan that some major publishers are trying out is not, overall, going to be advantageous for authors. It means that authors have to wait a year and a half before receiving any money on their work. Essentially, Macmillan New Writing is operating along the lines of category romance publishers (though those often pay small advances.)
This is a really good point, Kat. The foreign rights for a new novelist, whose actual sales may be very limited, will often outweigh the Uk royalties. Macmillan have been pretty good at selling foreign rights (MFW Curran's books have sold into the German and Spanish markets) so I think I've just been unlucky so far!
Most SFF authors these days are seeing a lot of their income come from foreign rights sales; Tim is at the mercy of Macmillan's rights department, which may not bother to pursue sales even though they have World rights