Skimming (and painting)

Plasterer

£800 is not expensive
All walls to be pvad first (probably twice maybe three times) floors need to be sheeted up. Four walls to be plastered (2 at a time taking approx 2.5 hours to get a nice finish) your window wall (unless the window fits to the ceiling and adjoining walls) will take longer to prep than the other walls as the plasterer has to bead the reveals and also skim the reveals into the window- including protecting the window frame. Plastering cost max £300 (including material)

The other £500 is easily absorbed by the decorating. Ok above the picture rail hasn't been re plastered but surly will be redecorated. I'm assuming that as your decorating the walls that the ceiling is be decorated also.
New plaster 1 coat watered down paint ( mist coat to absorb into plaster) then at least 2 coats of emulsion (4hours at least drying time between coats) the dec has a lot of cutting in (ceiling lines, both sides of your picture rail, skirting, archatrives, window) then he/she has to gloss or eggshell all of the wood work- this is not a five minute job as when your glossing you have to keep brushing the gloss for a top finish and to stop runs. The door alone could take upto 2 hours to get a nice finish. Your materials alone for decorating could easily run into £100.
Give your mate a break I think he has actually charged you mates rates.
If I quoted this It sounds like I wouldn't have got the job as it would have been more than £800.