There is change in the air, but I'm not so sure it is plausible deniability. Nor is it unique to the UK CAA. It is rather the harbinger of a fundamental change in the way that Aviation Authorities do business. I can see the same process in its very early stages in Australian aviation regulation, no doubt spurred on by their recent bitter wrangling on airspace (for those in Oz, watch this space because the next 3-9 months will see surprising new systems unfold with new CASA and AA roles emerging).
Governments across the world are turning to structures that provide for Government to have ownership of the asset/control of the regulation, and to outsource the operation, management and delivery. It is being done in other sectors, and notably in transportation the roads sector is well ahead of aviation. I have had some experience with developing the theory of this in the roads sector, and I can see the direct parallels with aviation. Let me first explain what is driving the change (and note that it is not being driven by aviation needs).
Governments are introducing efficiency measures to check how well their public sector agencies perform. For example, every year since 1995, Australia has published a performance monitoring report of the roads in each State. At the same time, there is a move towards improving the financial reporting of agencies, by adopting income statements and balance sheets, based on regular commercial lines. Such efficiency measures include "Number of staff per 100 kilometres of road", could easily include "Number of staff per 100 aircraft registered" or "rate of return on capital invested in airways equipment". The measures are intended to be used in benchmarking across countries. Countries that are members of organisations such as OECD (which UK and Australia are) will find that their efficiency is published and compared.
This comparison actually happens, and it drives the change. The Ministers of Transport or Ministers of Aviation of the various States/Countries get together at their taxpayer-funded expensive conferences, and they needle each other over the canapes and cocktails. "I say old chap, you Orstralians must be pretty slow workers with all those people employed to do a few simple aircraft registrations, eh what." The result is that the Ministers come back home with a needle up their bottom, determined to move the efficiency measure numbers (or KPIs) in the right direction. The only way that big jumps can be had in efficiency measure numbers is by implementing big changes in the way that the business is run. Such a change is the Aviation Authority getting out of the business of "doing" and rather getting into the business of "watching" (or auditing as they like to call it).
In this new paradigm, the Aviation Authority normally sets the specifications that have to be met. Not the familiar procedural (or method) specifications in which the Aviation Authority defines what work is to be carried out, and which require them to give a lot of supervision, and which industry cannot easily change the design, works methods or materials. An example of the old is thus (and let me give an airport engineer's example since I'm not qualified to give an aeronautical engineer's example): "the runway friction shall be measured by the CAA using a mu-meter, if the friction at 100kph is less than 0.35 then the runway shall be textured, and rubber removal shall be done weekly at airports with more than 20 widebody jet movements per day".
The new approach will move to performance (or functional or end or outcomes based product) specifications, which has the theoretical advantage of encouraging the "industry doers" innovation as they find the best way of meeting the performance requirements. Thus the above example becomes "the runway friction shall be at least 0.35, and the macrotexture 1mm. The airport shall include in the safety management manual those procedures necessary to ensure this." Easy enough then for a much-reduced and de-skilled Aviation Authority to simply audit the manual. Watch out for large doses of ISO 9000 standards as this progresses.
This new way of doing business is good in theory, but it tends to fall down in the initial years of practice. Firstly the transition from the Authority-driven system to the industry-driven/Authority audited system usually falls into a big hole. The transfer of skills to industry and the uptake of responsibility and self-regulation by industry simply don't happen very well. Whatever the good intentions, the whole system typically falls in a bog, which can take quite a few years to get out of. Those few years can be hard to live through.
Secondly, the Authority might try to hold on to too much of its previous role, and try to keep using some procedural (or method) approaches despite the move to an outcomes based approach. I've seen it in naval architecture in Australia, where the [deskilled] bureaucracy still holds sway over industry professionals. This can require quite a stiff conflict to break the bureaucratic mindset. The outcome when it is finally broken can be devastating to the bureaucracy, but takes a year or two of hard work to achieve.
So welcome to "change in the air" and stand by for some rocky times ahead. If there is any advice I can give as a professional engineer, it is (a) get your own house in order with your own qualifications and professional memberships, (b) get your company's house in order with the appropriate ISO9000-type accreditations, (c) beef up your professional library / information systems / subscriptions to standards, etc as you have to become virtually the 'new authority', and finally (d) don't let the aviation authorities keep hold of the old levers of power after they have been supposedly taken away. Find the right grounds for a fight early on, and stand to them.