I get problems like this all the time (QS for a housing association). Normally the contractor just passes on that there is a problem and we usually agree for them or another contractor to upgrade the CU. Doesn't help that the investment department never surveys these types of upgrades and account for any extra work. I just insist it gets done. Once the contactor has passed on their duty of care by letting me know there is insufficient RCD protection in this case, it's down to me (the housing association) to ensure the work is compliant. I wouldn't expect or want any contractor to sign off substandard or unsafe work. And they would risk being removed from the contact if this was ever picked up in the auditing process (which it does).