That's the way the UK CAA have run JAA CPL testing in the United States for around the past year or so, except it was just travel expenses.
That is the whole point. Previously, the examiner charged only travelling expenses because the £780 charged by the CAA included his fee, which was passed on. Under the new proposal, a candidate will have to pay a fee of £534 to the Authority for arranging the test and processing the result as well as a separate payment, determined by the examiner, to cover his fee and travelling expenses.
It will be interesting to see if the CAA's idea of continuing to allocate examiners is supportable in law. The Authority is bound to issue a licence if all of the requirements of Part-FCL and Part-MED have been met and there is nothing in either document that requires the examiner to be allocated by the Authority, except in the case of the ATPL and MPL Skill Tests. If a candidate turns up at Gatwick with a course completion certificate from a properly approved training organisation and a test form completed by a properly authorised examiner, on what legal grounds can the Authority refuse to issue a licence?