I agree with the comments by "Progress". There are two parts to the question.
First, a council is not obliged to appoint the only candidate and can continue to seek suitable candidates.
Second, co-option obviously should not be decided on "mates" but should be about finding someone who will make a contribution to the council.
Whenever a casual vacancy arises, the council must publish a statement, which says that 10 citizens can demand a poll before a given deadline. If a council is making unsuitable choices, and you think alternative candidates can be found, then make sure you get people together to demand a poll another time. The request for a poll goes to the elections department of the principal authority, so the council has no say in the matter.