Hi. I think the council are just chancing their luck here a bit..The same thing happened to a friend of mine.It is totally unreasonable to expect siblings to attend seperate schools if they both have the same educational needs.
What my friend done was to write a lengthy lewtter to the school and local authority expressing her need to have her daughter attend the same school as her son..At the same time as this, she met her local Councillor, who then in turn wrote to the local authority also. She also got support from the local Citizens Advice Bureau who basically done the same as herself and the Councillor.
The result was that both her children were able to attend the same school, and in the Councillors words, the school just had to juggle their numbers and relocate other potential pupils who did not have siblings attending the school.
I hope it all works out. I think the moral of the story is for your friend to stick to his guns, gain as much support and a definate paper trail of letters of support etc, (just incase they mysteriously go missing) and insist that both his children need to be at the same school, however he should not submit to allowing the school or local authority to bully him into removing the first child and relocating both to the less local school.
Good luck.