If I were you I'd be heading down to the track at Tiverton ... someone there will tune your engine for you then you can have a play on their excellent track as well!!!
Not worth a great deal at all unfortunately, TT were never really a popular brand when it came to 1/8 buggy's so if I were you I'd give it to 'er indoors'!!!
Almost certainly the clutch Kev, if the springs are exposed by the wear on the shoes then the clutch is probably 'hanging' which would cause your problem with cutting ....