True. I expect it's probably not wide spread use in the private sector... Mind you, I also think it's very bad practice for the services involved. If you've had someone good doing the job very well for a couple of years who through no fault of their own has not been able to apply, then I fail to see why having someone 'slotted' in to the role purely because they are a permenant employee, who may or may not be very peeved and unmotivated, holds any benefit to the service at all. If we are to have a competative interview process then it should be just that, competative and open to all current staff, including temps if they have been there longer than a year in my opinion.
That said, I am in the position to be one of the band 5 roles that has remained as a band 5 and I wonder whether my opinion would be quite so liberal if my own job was effected, (I liked to think it would be). I may still have to apply for my role if someone else expresses an interest. We are currently at the point of waiting for the final proposal.