But from what I believe the LABC inspector has to follow BS7671:2001 or similar which is not the latest BS7671 edition anyway. That is what the official approved Part P document says anyway.
What the LABC inspector has to follow (or is supposed to follow) is the actual requirement of Part P of the Building Regulations which just says that installations must be reasonably safe. He doesn't have any legal remit to insist on an installation meeting all the requirements of BS7671:2008, BS7671:2001, or BS7671:anything, and as you say, the guidance (not law) in the approved document even sets out other specific ways which should be considered as being acceptable (but does not set out
every way and notes in itself that there is no requirement to follow any particular recommendation contained within it).
The unconnected earths are indeed worrying, and it really isn't a good idea to fit some item so that the wiring is hidden away with the intent of going back later to finish it off, especially if you're not going to carry out any tests before hooking up the power. But as for the fuss about RCD protection, I find it laughable that anyone could seriously believe that having a few more switch drops less than 2 inches from the surface without RCD protection means, in itself, that the installation is not reasonably safe. Yet there are electricians who claim that despite having installed exactly that arrangement just a few short years ago and being perfectly happy that it was reasonably safe then. If it was reasonably safe in 2007, then it's just as safe today.
I'm also surprised nobody else has commented on the fact that the report lists every single item as "C2 - Potentially danegerous, urgent remedial attention required." No earth sleeving at a couple of sockets? Cables not clipped in the attic? Really? And this list tends to suggest, at least to the layman, surely, that this lack of earth sleeving, lack of RCD protection on the lighting circuit, and unclipped cables is on a par, risk wise, with disconnected earths and insufficient overload protection. That's ridiculous.