It's risky not to secure a funding before you enter your phD study. I worked as a research assistant for different unis in the past and got to understand the way how department/supervisor tried every way to get funding for their own benefit. As the competition for funding is fierce (not only for the phD students but also for the staff and departments), departments/staff they tend to develop their own research (get more money for themselves) by including phD projects in it so that they can apply for more funding. I don't entirely know your situation chinglnc but by just reading your story it's very likely that your research is being included as part of your supervisor's research so that he can apply for funding for himself. I have seen some bad examples that the supervisor took the funding but not really put much input into their phD students/projects. And if the funding is given to your supervisor but not you, your situation will be like his/her "employee" as you said. And if the funding is under his or her project/name, there will be no guarantee for the part of your study I'm afraid.

I used to think to further my study not being just a RA. But as I worked in the field as a RA I realised that studying a phD it's not only a study for myself but on the other hand I will become a tool for my supervisor to help developing "his" projects. I don't mean studying phD is a bad thing but in my case I found that having the certificate couldn't brought me into a higher level of career as the chance of working in academic side is very slim and if in other industries people won't consider this "high" qualification in my field. So I end up having my own research business rather than studying for a higher degree. And I got more freedom for my research work, I can get hold of the funding completely from my sponsors and I can earn a living.

You mentioned you are a foreign student chinglnc I wonder why you can pass the financial evaluation by the gov/uni before you came to study in the UK. I have some friends from foreign countries they said to me they can hardly find funding in the UK because most funding are for the local/EU students. And if they want to come to study, either they need to find their own sponsorship from their hometown or they support their own study and in that case they need to prove that they have a strong financial background to support their study.