What would be the point of fining the councils? Council tax would have to go up, there would be less money in the pot for housing.
The benefit cap imposed by the government has caused a shortage in private rentals that will accept people on benefits. I agree that a B&B is not the place for people with children but what can the councils do if there literally are no vacant properties? Thousands of houses and flats have been built near me over the last few years and are still being built. Many of these are for the public housing sector and they are being occupied as soon as they are built. Still there are waiting lists.
Yet we still have empty houses that are privately owned; single people or couples living in 2, 3 and 4 bedroom social housing properties because their children have left home and they refuse to move.
Of course a small minority of the parents in B&Bs have brought the situation upon themselves. If I were a landlord I would hesitate to rent my property to someone who has been evicted numerous times for non-payment of rent and/or anti social behaviour. What should be done with people like that? Yet the council are obliged to provide accommodation.
I don't know what the solution is but at least a B&B provides shelter, heating and some sort of security.