Sorry, but HMO do need a proper fire safety plan, and it seems these flats don't seem to have one. This plan is to ensure that, in the event of a fire in one part of the building there is adequate separation between different parts of the building to hold back the progress of fire, as well as adequate 'protected routes' for residents to escape to the ground floor. These inspection people are just doing their job.
£30k is a huge sum of money to have to spend, and it isn't clear where you got this figure from. One possible solution to providing an acceptable escape route is a rear metal fire escape, and as PP pointed out above, one might have to invest this sort of money to install one of these - but there may be other ways to make the building comply.
Either way as a landlord of HMO one has to treat this seriously and it is a wonder the building has already been tenanted as a HMO without proper checking.