But the council's intention in starting the project was insulate poor people's homes free of charge, while making the area look nicer. I don't see anything wrong with the intention - it's the budget and implementation where they screwed up.
After accepting it the contractor realised some of their values were wrong so in addition to attempting to find hundreds of thousands of pounds of saving from the council, they were also trying to save hundreds of thousands due to their own misestimates.
Part of this led them to select aluminium cladding over the originally specified zinc cladding which was much less flammable but much more expensive.
So even if the average standards in the industry are high, and 95% of companies wouldn't have suggested the use of dangerous cheap materials, those companies wouldn't have won the bidding.
So any change in the rules needs to improve the bottom end of the industry - it can't be a mere voluntary scheme that improves only the conscientious and competent.