Welcome to being promoted to the role of management of a failing project.
When you were just a normal member of the development team, the project was failing. The previous project manager copped the blame and was sacked. They've looked around and made you the manager.
Now, you have a short window to make a difference. It cannot be carry on as before, because otherwise the only thing that will change is that next time it's you that gets blamed and sacked.
Your only choice is to make a difference.
Perhaps the difference you make will be catastrophic, the project will fail, you will be blamed.. err hang on, that was happening anyway. The point I'm making is that what ever decisions you have the authority to make are unlikely to make the situation substantially worse.
Perhaps you will make an inspired difference, just like a magic wand, everything will be perfect, there will be 30% pay rises, large bonuses, share options... err, thats not likely to happen either.
In reality most choices you make will not make much difference
The most important thing to remember is that when things are going wrong, it is important to make changes. Some changes will work better than others, but by making changes and monitoring the effects you can continue to do the things that work, and stop the bits that don't work.
Whilst each change on its own will not make much difference, a series of 1% changes over time will build up.
What would I do as a first step?
Well, first of all, you cannot succeed without your team, but by the sounds of it, your team is not committed to the project, or possibly even to you as their leader. Assuming you have a little breathing room, and are not about to reach a major delivery date, with nothing to show I would focus on performing the role of a team manager to the best of my ability, ignoring the team output, work ethic and time keeping.
What is the role of the team manager?
Ahh, glad you asked. Whilst they have many duties, (usually the stuff that no developer would do even if you paid them), the key role is to make it as easy as possible for your developers to do their job.
What things get in the way of developers on your team? Is the build tool chain a nightmare? Are the computers old and slow? Do they have too much office admin?
Now here's the deal. Really, and its an absolute bargain. In exchange for you spending your time working to make their lives easier, all they need to do is to spend 5 minutes each day telling you what they did yesterday, and what they are going to do today.
You get to hold them to account about why they are still doing something 3 days later that they thought would only take a few hours (can Joe spend 30 minutes having a look at that with you...), but also, you get to thank them for delivering on what they did yesterday too.
Over time, with the developers feeling good about making small daily achievements, and you making each day just slightly more productive, you might just turn the team around.