Records need to be traced back.
Did she deal with her father's estate? Either by obtaining probate or letters of administration (if he did not make a valid will and died intestate?).
If not, does she know who dealt with his estate, possibly a solicitor who held any will be had drawn up or another relative (as unknown if there are other siblings).
If she can find out who dealt with the estate and whether any property was involved that is a start. If she does not know then she could apply for a copy information:
http://www.justice.gov.uk/courts/probate/copies-of-grants-wills
That is the best place to start, see if there is any proof of ownership anywhere in case any transfer, assent etc... has been missed, nit highly likely, however, it's possible, especially if the local authority has not been keeping a tight control on its housing stock (hence the rent demand after all this time).
Another possible thought I had is whether they specified what kind of rent. Is it definitely tenancy related? Is there any change it could relate to anything like ground rent (for example if the property is a leasehold property under a lease to which the Council is the landlord)? Have they given any figures?