I don't expect hand holding but I am gutted they never even thought to mention it to me before the advert went out
There may be all sorts of reasons why the ad went out without them talking to you. If it's public money, we are obliged generally to advertise. It's highly unlikely to be meant personally. You might not be at the centre of their thoughts; academics are multi-taskers under high levels of stress, demand & expectation.
Ask them about the project. Tell them you might be interested, as it's aligned with what you've started to do, and there's funding. They'll understand how difficult self-funding is.
Have a go - you can't have a hope of getting that funding if you don't try for it.
And yes, it is hard when you see your peers getting things you don't get, but try to see your fellow PhD students as colleagues. There'll be times when you are eaten up with envy; there'll be othe times when you land a prize others seek. IT tends to even out, so try not to fixate on this.
You have to learn not to take these things personally. Hard to learn, but if you can find ways of dealing with this sort of stuff now, it really will hep you in your future career. If you stay in academia, there'll be a lot worse. And a lot better situations as well!