Your friend must have read about American cases of all sorts, not data protection, where people put in claims for millions or hundreds of thousands. Those are just paper claims and the figure is fanciful and merely a procedural device. It doesn't mean anything.
We don't have that in British courts. Your friend will have to establish an actual financial loss immediately consequent on, and caused by, the local authority's negligence and breach of duty.
For what have the council apologised? Only the breach of data protection ?Was she in fact entitled to the sum in benefit that the authority was refusing to pay out, which it suspended ? If not, it's hard to see how she has suffered much, or any, loss from the landlord finding out that she wasn't getting it and it had been suspended. The decision to let would be on her true present and future financial circumstances, not on what she thought or hoped they were.