Whopity
My FIC involved more than 40 hours with the instructor. 40 may be the minimum but the actual will depend very much upon the individual course operator. In any case, without CPL level knowledge it would be extremely tough to pass - hence the requirement.
Another point to bear in mind is that the "money" in flying training is really in commercial licences. As far as I am aware, an instructor cannot teach for a rating or licence that they don't hold; it is therefore more sensible for a school that offers PPL-CPL courses (which is the case with most of those in the London area) to employ instructors who can do both.
The ideal would be to have experienced pilots with CPL/FI but that would involve the schools taking a giant leap of faith and actually investing in their staff. Merely lowering the academic pre-entry requirement might help small clubs to some degree but will in no way improve the long term prospects for the training industry in the UK.