That's pretty much the way it is up here in Illinois also. I'll add that for single-family homes, the general contractor is often the "developer" as well, the guy with the financial stake. He bought vacant property, improved it as needed (water, sewer, electrical, gas, roads), and keeps himself busy for a few years building out the lots and selling the homes. He knows all the subcontractors - the drywall guys, the foundation pouring company, painters, plumbers and on and on.

The culture is obviously different between the US and UK systems. Apparently, the UK home purchasers have given up on the reputation of the General Contractor, Developer and, instead, is willing to pay extra dollars for an on-site inspector and mentioned by Max) who insures each step of the project is done correctly. Summary, the CoW works for the homeowner, the General Contractor works for himself and balances the displeasure of the homeowner with the potential business loss/reputation damage and cost of delays or poor quality. The General Contractor also uses certain sub-contractors regularly and has a relationship with them so he is unlikely to force sub-contractors to re-do work that is marginal because he knows he will have to pay more for the work on the current project and future projects.
Sub-summary - CoW, no conflict of interest and it is his sole job to protect the interests of the homeowner (finished project owner). General Contractor, many conflicting interest.

 

I was just told that CoW services exist in the US and are most common on public works projects - mid-sized and smaller towns where the manager of the street department may have more experience fixing pot-holes than managing a highway project and knowing codes/design specs or building procedures. School districts also hire them to to stop projects rather than allow low-bid contractors to get so far into a project that fixing the errors can bankrupt a district.

http://www.cjmconstructionconsulting.com/clerk-of-the-works.html

http://www.campuscmg.com/index.asp?pageId=55