SEO Pricing Model - how much should you charge/pay?

You're right, definitely a big problem, see it with UK based agencies all the time. Shiny office, front line professional sales force to secure the work, then all the leg work is outsourced.

I know of one near us that claims on their literature that all staff are UK based and they don't outsource... but I know for a fact they bulk buy outsourced links so whats the difference?

Guess as always, regardless of location, it's down to actual results and are you happy.

You can also pay a lot of money to a UK SEO and end up with the same. Trouble is you have no idea whether or not they are go to sub out the work to a third party until you see some of the results coming through. And just what is a fair price for good quality SEO work in the UK?
Credit where credit is due, they are great at marketing themselves via email, only 10 today...