She says neither step will address the root causes of the problems within the construction industry that led to the tragedy.
Grenfell survivors said they were "disappointed and saddened" that the report rejected their calls for a ban on combustible materials. Architects, councils and fire experts also condemned the approach.
THE government will pay for the removal and replacement of unsafe cladding materials from tower blocks, Theresa May pledged yesterday.
Flammable insulation and cladding products are now being stripped from hundreds of high-rise homes in England and Wales.
'A series of commitments made by ministers up to and including the prime minister have not been honoured'.
Shahin Sadafi, chairman of local campaign group Grenfell United, said the report had left residents "disappointed and saddened".
Dame Judith's appointment to lead the review had been met with some criticism due to her former role as director of the Energy Saving Trust.
But speaking to BBC Radio Four on Thursday, Hackitt stood by her stance on not recommending an outright ban on all flammable materials in cladding, insisting such a move would not solve the entire problem.
Cladding on hundreds of tower blocks across England which was tested in the aftermath of the fire failed safety tests.
Clearer roles and responsibilities throughout the design and construction process, as well as during a building's occupation.
US, Gulf allies sanction Hezbollah leaders
Washington said it was sanctioning five members of the Shiite militia's Shura council - its top decision making forum. Treasury Secretary Steven Mnuchin said in a statement .
She said: "What I want to see happen here is we do not want to have to wait for a tragedy like Grenfell before we apply the full criminal sanctions of the law".
"We have to get to a position where people putting lives at risk by what they're doing gets picked up at the time and there's sanctions applied there and then, not in the aftermath of a bad tragedy like Grenfell".
"If people feel I haven't gone far enough and for this system to work in the future requires, in addition, that there is further clarity or indeed banning of some of the materials which are now used, I don't have a problem with that", she said.
At Grenfell Tower, which was owned by the Royal Borough of Kensington and Chelsea, the building regulations were checked by RBKC's own building officers while works were already under way.
"It is now critical that the assessment process proposed for cladding materials is also applied to other building products".
She recommended that a "simple and effective mechanism" for driving building safety was needed and called for incentives for the right behaviour and tougher penalties for those who breach regulation.
The bare minimum of big changes in the system must be an end to any combustible material on the sides of high-rise tower blocks, an end to this so-called desktop study which is a paper-based way of getting around testing material and allowing them to be put on buildings and certified as safe, he said.
She added: "If in order to give them more immediate reassurance that is one issue that needs to be addressed to go even further, so be it, but let's not lose sight of the fact that we need a more robust regulatory system so that buildings are built safe". She said she wanted desktop studies to be carried out only by qualified people, which she said would effectively stop unregulated fire engineers paid by builders of building owners from declaring systems safe.
Other key recommendations for the council included guidance to all council-maintained schools and third-party run residential care homes to make sure the implications of potentially hazardous cladding are assessed, managed and shared with other schools and clear arrangements for ad hoc specialist advice on complex fire safety issues.