Evil,
I don't think it is the ground school which makes a UK IR so expensive - the ground school only accounted for about 10%-15% of the cost of my IR and that was including the residential brush-up course and two days at Gatwick for the CAA exams.
The main expense was a combination of:
Very expensive training rates at a decent school (simulator over £100 ph and aircraft about £250 ph)
Hotel bills and travelling (over a 400 mile round trip each week for me)
Approach Fees during training and test (over £25 per approach at some airfields)
Large number of hours to get up to the test standard (over 30 hours in the aircraft in my case + 13 hours in the sim)
CAA Flight test which together with a/c hire and approach fees meant the test cost about £1000. Thank goodness I passed.